The digital behemoth has made inroads into pharmacy in the US and is now buying medical practices too.
âAlexa, I need a doctor ⌠now!â
Who seriously thinks this isnât coming to a lounge room or kitchen near them, in the not-too-distant future, even in Australiaâs far, far away, interoperability challenged, slow-moving and risk-averse healthcare system?Â
There are four horseman of the digital apocalypse we all know we have to be careful about: Google, Amazon, Meta (Facebook) and Apple.
They all have global digital platforms which are root and branch entwined with our everyday personal and working digital lives, they all have more capital and influence than they know what to do with, and they all have expressed a strong desire to rule healthcare one day.
Three and half years ago, Apple CEO Tim Cook made the out-of-the-blue statement that âIf you zoom out into the future, and you look back, and you ask the question, âWhat was Appleâs greatest contribution to mankind?â It will be about health.â
That statement hasnât progressed far in three and half years for Apple, which is saying quite a lot about just how hard it is, even for these mega platforms, to perform their transformation and disruption magic in a sector which is mired in legacy, risk, emotion, government policy and regulation and politics.
But some platforms are doing better than others.
Amazon has had a much more pragmatic and considered approach to breaching the walled regulatory and policy gardens of healthcare than Apple. It has slowly but surely secured an emerging position in pharmacy services and distribution in the US, via strategic acquisitions of key businesses in the value chain of pharmacy provision and alignment of these assets with its core Prime membership retail data and services offerings.
Although they havenât managed a typical digital disruption, their acquisition of Pill Pack â a full-service online pharmacy that packages medications and delivers to consumersâ homes daily â followed by the launch of Amazon Pharmacy in 2021, which leverages the entire Amazon Prime membership database to spread the wings of their Pill Pack acquisition, has the entire pharmacy services sector in the US looking over their shoulder.
What Amazon hasnât done in pharmacy so far is buy an existing bricks and mortar pharmacy set-up like CVS or Walgreens, which they have the money to do if they wanted.
But why would they? They are out to leverage that part of the market, which is going to end up almost entirely digital, and to do that they donât need a physical retail network. They have pharmacists, they have distribution, delivery and data. Most of all they have a ready-to-go, trusted membership network. And slowly but surely, they are building their pharmacy industry expertise through joining in acquisitions like Pill Pack.
Anyone who thinks Amazon wonât come to Australia and do the same thing in time is almost certainly dreaming.
It took Amazon quite a while to establish their Prime network in Australia and get it right. After a slow start in 2018, following a covid bump in membership, it is estimated the network reaches nearly 70% of all online shoppers in Australia which equates to nearly 4 million buyers. That number is still growing rapidly in Australia. The network offers subscribers unique streaming TV content, music, books and shopping for everything from pet food to alcohol to clothing and the most sophisticated electronics.
When Amazon is ready, it will start adding pharmacy to its Prime network in Australia, and no amount of politicking and scheming by the Pharmacy Guild of Australia about unfair or inappropriate competition with their retail pharmacy shop network will be able to stop it.
Our newly minted e-prescribing network is a perfect infrastructure precursor to such a move.
Who is going to argue with a consumer who asks their GP to send their script to Amazon to fill and deliver, via the e-script network, which will likely include free delivery for Amazon Prime members?
Why would you argue against this? Itâs just introducing significant supply chain efficiency to the health system and itâs great for patients.
The Pharmacy Guild will almost certainly come up with a lot of obscure reasons to try to protect their owner network, but this time we think they wonât get far. They have no protection against the coming virtual world, and Amazon has eye-watering amounts of money to build connected solutions, buy politicians goodwill and influence the people they need to influence.
OK, thatâs going to end up reasonably disruptive to a decent chunk of the Australian healthcare sector at some point of time – when Amazon is ready.
Last week Amazon surprised a lot of pundits and took their first giant step into primary care by buying what fundamentally is a GP corporate in the US.
Medical One, which was acquired by Amazon for nearly $5billion (AUS), despite running at a loss still, is not like any GP corporate in Australia on spec. It runs on a membership model whereby users pay a subscription and get access to a range of GP services, much of it virtual.
Nearly all Australian GP corporates make their money first on Medicare and then on mixed billing (billing over and above a base Medicare rebate rate) via mostly face-to-face consults (phone teleheath is growing fast though). But if you strip away the membership model and look at the various sources of funding for Medical One behind the membership model (it includes US-style, Medicare-type money too) it could easily be a GP corporate in Australia.
Amazon is starting its journey upstream, from pharmacy into primary care, which you can easily argue is a great strategy. Primary care is where all the real action is going to be in the future. Itâs just how that action is going to be delivered.
Amazon isnât going to buy a GP corporate in Australia tomorrow, but if they follow their Prime path and their pharmacy path, they one day will, almost certainly.
As with pharmacy, they are starting with a relatively simple acquisition, one where they can learn the ropes of the sector, and, presumably, work out how they can optimise their new asset using their giant digital footprint and their Prime selling and delivery network.
Medical One has a lot of GPs working for it, but it is also deliberately focussed on delivering care virtually as much as possible, which, as per pharmacy, will almost certainly be Amazonâs main focus for care delivery.
Even if you dislike Amazon (I do, but it didnât stop me getting a Prime subscription – it’s great value) there is mostly only upside for such a powerfully connected consumer-facing company with a strategy like this, a powerful cloud technology base, and lots of cash to implement its plans in Australia.
Covid started the virtual care stampede (we resisted it for cost reasons for years but covid forced it on us, and now the return is too compelling for us to go back) but even if covid slows a lot now, virtual care isnât going to slow. There is too much ROI for the health system in it. Itâs being adopted rapidly by patients in primary care, albeit mostly by phone so far, and most hospital networks in Australia are now rushing to install virtual care capability in order to manage their patients out of hospital as much as they can in a cost-efficient way.
Virtual is also one big part of the solution to our rural and remote crisis (big, but no means all of that solution, which will eventually need more, better paid doctors on the ground than we currently have).
One more compelling rumour to add to this whole idea: Amazon is apparently thinking about buying Oracle. Oracle now owns Cerner, the biggest EMR company in the world, and the one with the biggest hospital footprint in Australia. That would put Amazon in hospitals, pharmacy and the primary care sector. Thatâs vertical integration at scale. Imagine the data they might end up with to optimise what they do, as well.
If you accept the premise of all the above: that one day, Amazon, and potentially some other big digital platforms, will start marching directly into primary care, in part by buying up some of our biggest and best-run corporates (ones with a good virtual footprint by that time, youâd imagine), then anyone who is holding onto any romantic notions about how general practice runs in Australia today and should continue to run â lots of small to mid-sized community focussed businesses with a lot of patient-to-doctor one-to-one relationships – should start rethinking the whole paradigm of the sector.
Amazonâs US acquisition of Medical One last week is almost certainly a harbinger of mid to long-term significant structural change for the primary care sector in Australia. And if they come, they ainât coming âsmall and nice likeâ.
They wonât take everything over and be able to service everyone, but they will take the high ground on key areas of emerging healthcare infrastructure and servicing, particularly virtual care.
Likely, they will link their services using modern cloud-based technology (technology none of our GPs have today) to the hospital and aged care sector.
Working for them, or with them, may not necessarily be like joining the Borg as many might first think. It might, for the right demographic of GP, be a good gig (pun entirely intended) â well-paid, well-supported structurally via technology, and with flexible working arrangements.
No matter, such change will significantly alter how we run and think about primary care in Australia (and probably tertiary care as a result).
Remember, the platform players will have intimate downstream links to pharmacy in place already, and they likely will look at key allied services they might be able to deliver virtually as well in their network, such as psychologists and mental health in particular.
I hate futurists as a rule. But there is nothing in our current healthcare regulation or set-up that would prevent any of this from unfolding over time.
And even if there was (or is), should we really attempt to stop it? No doubt some old warhorse vested interests will give it a go. The Pharmacy Guild wonât die wondering, and you suspect that even groups like the RACGP might end up being protectionist to hold onto their current power base.
But the sort of transformational changes that such a consumer-facing strategy and digital focus might bring to the system, if well executed, while scary in many respects (all big change is hard from a people perspective) will also present compelling opportunities for access, equity and cost minimisation that we probably can’t ignore.
Well-executed and controlled, it could massively improve the efficiency healthcare, most especially for patients.
I imagine a lot of people might think that Amazon running large chunks of our healthcare system and its infrastructure is a potentially horrifying thought.
I do in all sorts of ways. Think of all that personal health data running through their hands. And the idea that doctors and pharmacists would work for a digital behemoth as some sort of new elite type of gig worker – it doesnât seem to fit the profile of those who become doctors and pharmacists.
But things do change, particularly so through new technology. And if thereâs one thing that is going to have to change if governments of the future want to remain liquid, itâs optimising our healthcare systems via emerging technologies such as the cloud and virtual care.
Whether we traditionalists like new technology and digital platforms or not (I love dial phones and wind-up watches), the system canât keep running the way it currently runs and stay upright. We need to optimise quickly. And optimisation is precisely where Amazon is pitching itself in emerging healthcare management paradigms.
One thing Amazon might bring if, or when, they do arrive on our shores with healthcare in mind is money to throw at our giant legacy digital health infrastructure.
Amazon is the biggest cloud company in the world.
If they start working with GPs, they arenât going to accept that their GPs work on 1990s-style server-bound computer set-ups. They will get them on the cloud, so they can talk to hospitals, aged care and allied care seamlessly. On the cloud, Amazon GPs will be in a much better position to deliver virtual care anywhere, and service local hospitals, which are increasingly investing in following their patients back out into the community and managing them in the community.
Someone said to me the other day that they had thought âgeneral practice in Australia was a rabbit in the headlights, but increasingly, Iâm starting to think it might be a case of lambs to the slaughterâ.
When I asked why they thought this, they reeled off all the new forces eating into the current community model of general practice:
- the Pilots Moshs and Medinets (virtual-based start-ups) ripping away low-hanging consult fruit on things like Menâs and Womenâs health and basic telehealth, using virtual servicing
- the private health insurers building referral networks which are starting to bypass the community GP network to make money directly in the community
- the many (not all) PHNs doing the same thing and bypassing the community GP networks on key things like mental health and after-hours services
- public and private hospitals starting to build out virtual networks so they can service their patients out into the community and back – patients that would have been GP consumers beforehand. GPs canât help the hospitals in this endeavour as their legacy technology isnât able to easily talk to hospitals systems, or their patients directly, and their funding mechanism isn’t suited to them working with hospitals either.
This same person suggested that the community GP model suffers from the AMA, the RACGP and ACRRM working to defend the old world (and old empires), when the new world (the world of Amazon Iâm guessing she meant), is marching to an entirely different drum beat.
Lambs to the slaughter?
I donât think itâs ever going to be that bad.
In the end, every healthcare system is going to need a substantive and cohesive GP network of some sort in order to manage the evolving chronic care load.
The problem is, change is definitely coming, and if we donât prepare at all for those changes, then some people are going to be caught short. In this process you might imagine there will be the odd bit of slaughtering on the way through to settling GPs into a new paradigm.
Yes, Amazon, or its equivalent, will come.
And if itâs not Amazon, by some chance, change of the sort described here will happen anyway.
Virtual care will be the front end of that change, but the change will likely be much broader overall.
Think someone (it looks like it will be Amazon given its current trajectory) delivering virtual GP care, mental health programs, linking your personal health record to your phone between your GP EMR database, a hospital database and other distributed sources of data that are relevant to your care, linking you to a hospital for after-care virtual services, and delivering you your script through your phone.
Itâs not here now, but you can see it starting in earnest in the US and lot of forward technology-leaning countries, particularly in northern Europe. Australia unfortunately is not forward-leaning on healthcare technology. We are stuck so far with lots of islands of server-bound systems.
If you look hard enough in Australia, you will also see infrastructure evolving (our e-prescribing network is one great example) and companies building around our legacy infrastructure despite it (usually cloud-based digital platform-type companies) that are positioning themselves to meet this future.
Keep your ears firmly to the ground and your eyes wide open to the opportunity of such change, and it might be much easier to ride the digital platform wave that almost certainly is heading our way.
âAlexa, I have a headache thinking about all this stuff … find me a doctor please.â
