Amazon and the Transition to Patient-Centric Healthcare

What Does “Patient Centric” Mean?

Simply put, the term refers to the effort to put the patient in the center of efforts to safeguard, enhance and improve health.  It means that the patient is put first in a manner that provides transparency and continual engagement in order to respectfully and compassionately provide the best outcome and experience for the patient and family.  Shifting to focus more intently on what patients, as consumers, want and expect, this movement has produced new initiatives, delivery models and processes by partnering with patients to collaborate on solutions.  The need to keep patients engaged is essential, core to the strategy, just as is ensuring an optimal patient experience.

The emphasis on patient-centric models has permeated both the pharmaceutical and healthcare industries.  From drug development to distribution and administration of prescription drugs, models are changing, and rapidly evolving technologies are one of the primary drivers.  Technologies such as artificial intelligence, machine learning, predictive analytics and big data are being used to improve the speed and quality of research and development efforts, efficacy of treatment, diagnosis as well as clinical trials.

Patients no longer suffer silently when healthcare providers fail to provide them with the level of service and care they anticipate.  According to a survey by Accenture, respondents indicated that patients want to be valued as consumers and receive the same level of responsiveness, careful attention and convenience from healthcare providers that they receive from prominent consumer brands.

Today, patients are bearing more of their own healthcare costs.  Deductibles are often higher on healthcare plans, so more consumers are paying out-of-pocket for healthcare services.  As consumers, patients are demanding that healthcare payers and healthcare service providers provide pricing information as well as patient outcome data.  This vital information is used by consumers to making better informed decisions.

Today patients have greater access to personal health information about disease and medical conditions.  Patients share their experiences openly on social media and the information can spread like wildfire, good or bad, about pharmaceuticals, care providers, navigating the healthcare system, care plans, treatments and cost.  Advocacy groups, patient populations and pharmaceutical companies are working together, sharing feedback and vital information to develop new, more effective drug products and therapies.  Regulatory agencies including the U.S Food and Drug Administration (FDA) and the European Medicines Agency (EMA) have incorporated patient opinions into drug development and has been utilized to influence decisions on several drugs.  In addition, patients have also provided feedback regarding drug delivery, critical to improving outcomes through better adherence to medication therapy regimens.  Patients have also provided feedback on such issues as drug formulation, such as the need to reduce dosage frequency through extended-release formulation, and the need for single dose packaging to eliminate the need to measure or count pills.

The patient-centric model extends to all aspects of pharmaceutical and healthcare management including the strategy, structure and process needed to facilitate transparency as well as a patient-driven development process.  The industry is listening and has been investing in patient-centric initiatives.  For example, Shire Pharmaceuticals, a British pharma company focuses on creating and maintaining a patient-fostered culture.  When Shire recognized that patients who started to fill out forms vastly outnumbered the number of patients that ended up being treated, the company took a critical look at their process.  They identified a need for follow up appointments after diagnosis and uncovered a greater need for coordination and data management.  To remedy these issues, Shire changed their existing process, positioning a nurse at the core of patient support efforts to coordinate the process.  This step significantly increased the rate of patients beginning treatments and has proven to be more successful in satisfying the needs and expectations of patients.

How Will the Patient-Centric Approach Impact Outcomes?

The patient centric strategy will focus on using patient preferences to achieve any or all of the following outcome goals:

The Financial Aspect of the Patient-Centric Approach

You may not realize it, but health care reimbursement models have shifted and will continue to transition to that of value-based care.  As with other industries, the healthcare and pharmaceutical industries have been aggregating and analyzing mass quantities of data.  This data is being used to uncover information that doctors can use to eliminate unnecessary care as well as to improve patient satisfaction and health. The Centers for  Medicare & Medicaid Services (CMS) and the Department of Veterans Affairs (VA) are actively working on the planning and execution of value-based healthcare programs.  In the spirit of trying to eradicate care that is inefficient, uncoordinated and ineffective in meeting the needs of patients, value-based care is evolving to replace the existing fee-for-service health care model.

The value-based model is a different method of compensating healthcare providers and is compatible with an array of emerging network models.  Healthcare providers agree to reimbursement for the population they manage.  This is based on the health outcomes of the patients and cost containment.  The objective is to provide patients with the best quality healthcare at the lowest cost, designed to help all patients in the population to live in a higher state of health and wellness and control chronic illness.

Shared risks and shared rewards are aligned to enable accountability so that healthcare providers can share in the savings generated when care is provided more efficiently and effectively.  Conversely, lower compensation occurs when care does not meet expectations.

Traditional Supply Chain vs. Patient-Centric Supply Chain

Traditionally, patients are at the end of the supply chain, following the discovery, development, production of prescription drug products as well as the distribution and sales needed for the medications to reach their final destination, the patient.

Today, specialty pharmaceuticals are all the rage.  Created from a type of biological material such as plant,  animal, or human cell sample, specialty pharmaceuticals or biologics require strict temperature control, specialized handling, storage and transportation.

The medical model today combines the patient-centric model with personalized medicine.  Next generation therapies often involve putting individual patients in the center of the supply chain. Cells are extracted from a patient, re-engineered at a production facility, then the reprogrammed cells are injected back into the patient to fight disease or chronic illness.  These living cells would have very short lifespans and would need to be shipped in closely managed, cryogenic conditions in a timely manner to prevent damage.

These innovative patient-centered treatment therapies require customization, not only in the development of the therapy itself but also in how the treatments are stored, transported, delivered and administered to the patient.  These types of medications tend to be much more expensive.  Any failure to comply with regulations, damage or loss of product usually results in added cost, damage to reputations, risk to human life and/or heavy fines.

As the power of healthcare dollars has been slowly shifting to consumers, patients have become more aware of issues, costs and options and are assuming more control over their treatment.  This can impact distribution, shipping and delivery considerations and other factors.

Evolving Healthcare Options for a Patient-Centric Strategy

What do patients want?  Overall, patients want high quality healthcare and prescription drugs at an affordable price.  Patients also want effective treatments for disease and chronic health conditions, transparency in the healthcare and pharmaceutical industries as this involves cost, product quality, etc.  Patients want to be informed, respected and have their feedback considered when new drug products are developed.

In addition, patients want convenience. This means not only having prescription drugs, medical devices and therapies delivered direct to consumers but also convenience when it comes to receiving medical care from healthcare providers.  This means more convenient locations, hours of service, appointment availability and resources are needed to provide insight, support, advice and relief to patients in times of crisis.

Non-traditional health care providers are offering alternatives to traditional prescheduled appointments in physician offices.  Retailers are opening small clinics in grocery chains and retail stores such as CVS MinuteClinics.  The acquisition of Aetna, a major medical insurer by CVS Health is an example of how two entities can combine functionality to provide quality, affordable, convenient health care services to consumers.

Insurers are providing telehealth services, especially popular for rural communities in which there are few hospitals or medical resources.  Healthcare providers are offering a wider range of operating hours and locations and urgent care centers are springing up all over, drawing patients away from doctors’ offices with promises of faster, more convenient service at a lower cost.

Patients are accepting more accountability for their health and are open to the flexibility that technology can bring, helping to ensure their continued health and wellness.  Consumers are taking advantage of health-related apps and wearable devices to monitor and document their health and nutrition concerns and efforts toward improvement.  This can provide a flood of information for doctors, aiding in diagnosis and treatment.  Wireless monitoring and tracking of conditions also aid patients to feel more in command, better prepared to manage their own care and make better decisions because they have greater access to information that they trust.  Patients are also utilizing online bill pay and scheduling, chatbots and other services to communicate, arrange services and streamline payments.

The customer experience is an incredibly important factor in the patient-centric strategy.  As healthcare providers evolve from strictly treating patients from a clinical perspective, focusing on the illness not the human being, additional adjustments need to be made.  Often health care plans make it cumbersome or nearly impossible to switch doctors.  The healthcare industry is known to have a bureaucratic administrative culture, one that is complicated to understand and navigate.  Burdensome paperwork and documentation, medical terminology and complex approval processes are frustrating to patients, many who are already burdened with dealing with the emotional and financial stress of chronic health conditions or life-threatening diseases of themselves or loved ones.

Transition from Traditional “Siloed” to “Connected” Healthcare Models

Healthcare organizations are finding it challenging to transition to more connected healthcare models and have been investing in new tools and strategies. Significant investment has already been made in technology solutions including those that facilitate communication, coordination of healthcare services and platforms which are able to gather and analyze data across healthcare networks.  According to a 2015 report “Malpractice Risks in Communication Failures”, nearly a third of the 23,658 malpractice cases filed between 2009 and 2013 cited some form of miscommunication between healthcare providers or between the healthcare provider and the patient.  Over $1.7 billion in malpractice costs as well as 2,000 patient deaths could have been avoided with better communication between healthcare providers and patients.

Patient-Centric Drug Design and Packaging

The pharma industry has recognized that when patients are unable or unwilling to take their medications as prescribed, patient outcomes suffer and overall healthcare costs escalate.  Over 50% of the American population take their prescription drugs incorrectly.  Approximately 125,000 deaths each year can be attributed to patients taking medication improperly and billions in avoidable healthcare costs each year.

Reasons for the poor adherence range from dosing complexity, dose form, psychological motivations involving a patient’s personal perception, forgetfulness, confusion regarding multiple medications and other factors.  The elderly are particularly vulnerable populations, partially due to the increased number of medications taken each day.  Children are another population of concern.

Pre-measured Single Dosage Forms

Single unit packaging helps to ensure that medication is taken as intended, a challenge for many patients.  Industry experts have indicated that single dose packaging of prescription drugs is ideal for better FDA and patient compliance.  In May 2011, after several years of studying patient compliance, the FDA provided guidance that patients should be provided with an accurate means to measure their medications, even in the case of fixed doses.  According to the FDA study, patients were routinely over- or underdosing themselves.  This was found to be due to a wide variation in the volume of medication, measured by inconsistently sized teaspoons, dosing cups which varied by drug product and other factors.  The FDA study recommended a pre-measured liquid stick pack as the solution.

Today’s consumers have become addicted to convenience in all its many forms.  Add to this that parents and caretakers of both children and seniors in homes or healthcare facilities have recognized the benefits of not having to measure liquid medications.  Other factors also prevail, making single dose packaging highly advantageous, making it easier to take medication as directed and comply with a medication schedule.  This eliminates medication-dosing errors due to language barriers and can be especially useful for over the counter (OTC) products for which a pharmacist may not be involved in explaining dosing directions.

Lessons from Amazon in Patient-Centric Healthcare Strategy

As the American population ages, industry giant Amazon has come of age.  It has been a disruptor for years now, quietly acquiring companies with innovative technology and expertise.  Amazon has been working to forumulate and execute strategies aligned with the overall goals of creating a healthcare system that is more accessible, affordable, transparent, efficient and effective in terms of patient health outcomes.  From each iteration and acquisition, Amazon has learned and evolved its strategy.  With a mindset that clearly demonstrates that Amazon values and respects consumers, the company is well-situated in the pharma-healthcare space to transform the industry, while keeping the patient at the core of its efforts.

Amazon has a direct distribution advantage, reaching over 300 million active customers, 100 million Amazon Prime members and 5 million sellers on its website.  Think of all the data that is already coursing through its databases, idea for providing a large-scale testing population.  Because of the health of the Amazon ecosystem, including money-making ventures such as Prime and AWS, the company is flush with cash to invest and is to work on low profit initiatives.  As part of its ongoing strategy, Amazon has reinvested its revenue for decades, building out its massive logistics and data center infrastructure.  With its acquisition of Pill Pack and Whole Foods as well as its well-constructed supply chain, logistics and supply chain, Amazon has proven it has the resources and expertise to distribute healthcare goods rapidly.

Intensely focused on the customer experience since its inception, Amazon already understands the patient-centric approach and wholeheartedly embraces it.  Actually, Amazon embodies the patient-centric strategy.  With the strength of its name recognition and high customer satisfaction ratings, Amazon is not only a household name, but also a highly trusted brand.

Convenience is at the core of a patient-centric strategy.  As the population ages, more patients will experience challenges with mobility.  Patients will appreciate and benefit from the convenience of same day or next day delivery and free or low-cost delivery of prescription drugs.  A master in e-commerce fulfillment, Amazon already  successfully manages millions of SKUs and can serve as a model for pharmaceutical distribution networks.

Amazon Web Services (AWS)

AWS already has a dedicated healthcare and life sciences unit and announced in Q4 2018 that three of its most popular services, Amazon Translate, Amazon Comprehend and Amazon Transcribe are now HIPAA eligible.  Including Amazon Polly, Amazon SageMaker and Amazon Rekognition, the company now has 6 HIPAA eligible machine learning services.

Amazon Web Services plans to extend its Comprehend natural language processing to medical records.  This would enable healthcare providers to mine data from electronic medical records to extract information from medical notes using medical jargon.   This follows the initial Amazon effort on Hera, an internal project designed to optimize use of digitized medical data so that unstructured medical text and information regarding patient diagnosis, treatments dosages, signs and symptoms.

Amazon made a deal with Arcadia Group so that it can be the exclusive carrier of an array of consumer medical devices including blood pressure cuff monitors and glucose monitors without prior authorization.  In addition, Amazon introduced new private label brands, including Solimo, nutritional supplements and personal care items and Basic Care, over-the-counter drugs.  Amazon also secured a patent for Alexa, enabling it to detect when a user is feeling unwell.  The device can recommend an over-the-counter remedy for the user to try.

Haven Healthcare

In January 2018, three industry giants joined hands to tackle the challenge of rising health care costs and quality of healthcare for their employees.  With the announcement of the collaboration of Amazon, Berkshire Hathaway and JPMorgan Chase partnering to reduce healthcare costs, this “dream team” rocked markets and set up expectations for significant disruption, even breakage of the healthcare model mold.  Although major employers including GE have tried to reconfigure healthcare, the results were mixed.  With Amazon, an established market disruptor, the stage is set for new imaginative changes.

Partnership between JPMorgan Chase, Berkshire Hathaway and Amazon involves a cultural change, not simply technology development.  The three companies combined have over one million employees, similar in number to a top-tier insurer.  Dr. Atul Gawande, surgeon and author of books which call for changes to current healthcare models was named CEO of the non-profit company dubbed “Haven”.  The objective of the new company is to develop a model that can provide healthcare that is simpler, more transparent and of higher quality at a reasonable cost.  An employee benefits company is being developed to handle services from provision through payment.

According to a National Pharmaceutical Council survey of 99 large employers, 70 of those surveyed prefer to have an alternative to the current rebate-driven business model for prescription drugs.  Employers indicated that they would like alternatives to the existing model which utilizes pharmacy benefit managers and uncovered that only 30% of those surveyed even understood their contracts with PBMs.

Prime Health

Industry experts have speculated that the Amazon’s actual effort is to develop “Prime Health”, a new healthcare model that breaks the mold of the existing system, a consumer-facing subscription model for healthcare services and goods that can compete effectively with local healthcare vendors.  The experts surmise that the offering would be a “one stop shop” for health needs from telehealth to IoT networks, chronic disease management, medical devices, prescription drug products and “everything in between”.

Experts anticipate that Amazon’s record as a market disruptor indicates that its likely success in changing the access to medicine and the pricing of drug products.  Both are significant concerns of healthcare providers and serve as barriers to optimal patient care. By fostering greater transparency, it is likely that there will be more competition, driving pricing down.  Overall, this is likely to reduce costs and force the pharma industry to alter their existing business model.  Amazon excels at collecting and utilizing data, as it has already demonstrated.  Using real world data collected on prescription drug safety and efficacy by its members, Prime Health could potentially facilitate increased competition between pharmaceutical companies.  This could lead to changes in the pharmaceutical value chain.

Amazon Alexa

Using Amazon Alexa-powered devices such as Echo and Dot may aid in healthcare practices.  For example, it may be possible to pair Alexa with Comprehend during doctors’ appointments to have the system extract medical information from the conversation and upload it to the patient’s electronic health record, reducing the need for physical notetaking.  In April 2019, Amazon announced that its Alexa Skills Kit now “enables Covered Entities and their Business Associates, subject to the U.S. Health Portability and Accountability Act of 1996 to build Alexa skills that transmit and receive health information as part of an invite-only program”.

Six new Alexa healthcare skills are currently operating in its HIPAA-eligible environment and Amazon is actively encouraging additional development. The new Alexa healthcare skills enable a variety of assistance from prescription drug orders for delivery to managing health improvement goals, provide updates to caregivers, find urgent care centers and manage chronic health conditions.

Alexa is a critical component of the Amazon healthcare strategy.  It has been speculated that Alexa will eventually be used to process identifiable health data and could then be used to help monitor chronic medical conditions, help patients and nursing home residents utilize environmental controls and more.

PillPack

PillPack, the company acquired by Amazon to deliver prescription drugs by post to patients who take multiple medications daily will enable Amazon to gain experience and insight into the pharmacy industry.  With an NPS score of 80 (scores above 70 are considered to be “world class”)  versus the pharmacy average of 26, PillPack shares a customer-centric attitude with Amazon, making it compatible with its culture.  Well-loved by consumers, PillPack is very popular for its service and convenience.

Leveraging customer demand, PillPack was able to secure a partnership with one of the largest pharmacy benefit managers in the United States, Express Scripts after a very public disagreement.  Earlier this year, Amazon started to market PillPack’s at home prescription drug delivery services to Amazon Prime members.  Initial marketing efforts have targeted patients with chronic conditions touting that shipping and service are free; patients only pay for medication.

The acquisition of PillPack gave Amazon a “$100M revenue run-rate business, a build out pharmacy supply, and pharmacy licenses in all 50 states”. Expanding the reach of PillPack and extending its distribution capabilities will enable Amazon to handle delivery of medical products including diagnostic tools, pharmaceutical and treatments.

Conclusion

Moving towards a truly patient-centered healthcare system requires more focus on the human patient by hospital and health systems and healthcare providers.  Rather than being solely focused on disease, care providers need to engage patients and communicate one-on-one about ways to improve health management efforts.  Patients and their families benefit from patient-centric care models and are more invested in healthy living and quality improvement and adherence to treatment regimens.

A proven market disruptor and customer experience expert, Amazon works hard to continuously improve its service offerings.  Advancing to the pharma and healthcare arena, Amazon is well positioned to provide the means to keep patients engaged and provide a high quality patient experience.  With its acquisitions in the pharmacy space and development of patented new tools, Amazon can bring a fresh approach to the quality improvement efforts in health care systems.