July 17, 2018

'Amazon Prime for medical supplies?' How Amazon wants to team up with Providence Health and UPMC.

Daily Briefing

    Amazon is in talks with Xealth, a digital prescribing platform, and at least two hospital networks about launching a pilot project under which physicians could recommend bundles of medical products to patients and have those products delivered to patients' houses upon discharge, according to people familiar with the pilot project who asked to remain anonymous, Christina Farr writes for CNBC.

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    According to CNBC, the report provides further insight into Amazon's strategy for entering the health care industry. Amazon last month announced that it had reached an agreement to acquire the online pharmacy PillPack—a move some observers say could increase competition for companies in the drug supply chain.

    Pilot details

    The pilot project, which the sources said is still being reviewed, is intended to provide patients with easy access to medical supplies and other goods at discounted prices through Amazon Prime and other e-commerce providers, CNBC reports.

    For instance, under the pilot, a patient who undergoes a knee replacement surgery could visit a personal page on a hospital's portal site to see online care instructions and a recommendation from their physician of bundled medical supplies and other goods, such as bandages and over-the-counter medications that could aid in the patient's recovery. The patient then could elect to have those medical supplies delivered the same day through Amazon. CNBC reports that ideal customers for the pilot project include dermatology patients, patients with chronic conditions, and parents of newborns, because they often have an urgent need for medical supplies and other products.

    Two people familiar with the project said Xealth is managing the pilot, while Amazon is primarily engaged in providing guidance on setting up bundles and reseller accounts. The sources said the two hospital networks involved in the talks are the Seattle-based Providence Health & Services and the Pennsylvania-based University of Pittsburgh Medical Center (UPMC)—which both have invested in Xealth, CNBC reports. The pilot project initially would involve a small number of hospitals, but would eventually expand to other health systems, the sources said.

    According to CNBC, the companies have discussed how patients might access discounts for the medical products through their health insurance and health savings accounts.

    Implications

    According to CNBC, the pilot project would allow health care providers to improve patients' experience by connecting them with Amazon for their resources, and could help save time for providers, whom patients commonly call if they misplace or forget their discharge instructions. In addition, the pilot eventually could expand to include prescription drugs if Amazon's merger with Pillpack closes, CNBC reports.

    According to CNBC, Amazon, Xealth, Providence, and UPMC declined to comment on the pilot (Farr, CNBC, 7/12; Ellison, Becker's Hospital Review, 7/12).

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