Sunday, February 5, 2023

3 key areas that could boost Amazon’s healthcare business

  • Amazon to enter healthcare sector in 2022 by venturing into primary consumer care.
  • Analysts expect Amazon to further develop its healthcare business with new operations in 2023.
  • Analysts say Amazon may buy startups in behavioral health, data analysis and chronic care.
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Amazon has spent years venturing into the health sector. The retail giant made a splash during 2022, and analysts expect it to continue doing so in 2023.

The July purchase of primary care provider One Medical for $3.9 billion demonstrated Amazon’s commitment to its healthcare business.

But a month later, he announced the closure of Amazon Care. This was their original app support service for employers; Only three years have passed since its release.

In November, Amazon launched Amazon Clinics. With this virtual service, patients can pay Amazon directly for treatment of common conditions like allergies and acne. Natalie Schiebel, Forrester’s vice president and chief research officer, said it was a sign that Amazon has learned from its mistakes.

“They’re moving fast,” Schiebel said. “The shutdown of Amazon Care was not a sign of failure. Rather, it was a strategic move to go direct to the consumer.”

The tech giant told Insider that it is not commenting on rumors or speculation.

Amazon is now in a position to continue building out its healthcare business; These are the 3 key areas that experts believe brands are in place for 2023, including mental health.

mental health

Adding mental health services to Amazon’s newly acquired primary care business could be a natural next step for the company.

In fact, Amazon already had plans to dive into the mental health market in 2022.

Amazon’s original vision was to provide on-demand access to therapists and psychiatrists. It’s made directly by Amazon and in partnership with behavioral health provider Ginger, which will merge with Headspace in 2021.

When Amazon Cares closed, it put those mental health ambitions on hold. Stephanie Davis, a senior research analyst at SVB Securities, was of the opinion that Amazon would need to make another acquisition for that company to be successful.

“They have that off-putting factor of a physician working directly from Amazon versus working for a well-known brand. One with whom patients have a positive relationship of trust,” he said.

Schiebel and Davis both said they thought Amazon would seek a company that sold its mental health services directly to consumers. This is because this is where the retail giant has historically excelled.

Its acquisition of Neuroflow, a startup making software for integrating mental health care into primary care, could allow Amazon to automate some aspects of it.

Neuroflow has clinical decision support tools for providers. It also helps patients with automated checks. And it also provides self-care activities.

The platform did not respond to a request for comment.

health data analysis

Schiebel said Amazon has access to countless healthcare data points because of its millions of customers.

Amazon Web Services Healthcare Solutions offers cloud services that can assist healthcare organizations in extracting data from medical texts and building machine learning models. These will be the starting points for Amazon, in Schiebel’s opinion.

“They can take advantage of dozens of AWS data centers. Ultimately moving the needle on value-based healthcare,” he said. “It’s just a matter of scaling responsibly across the country and competing with some strong competitors.”

Lennox-Miller said Amazon could buy healthcare data startups in which it had already invested. One is Harmony Health which focuses on health equity. Another option would be Clinify Health, a value-based healthcare data company.

Harmony Health and Cleanify Health did not respond to requests for comment.

Both have tools that can turn over vast amounts of data that Amazon already has. This, in Lennox-Miller’s opinion, could be a sales pitch for the retail company.

“What they really need is the ability to synthesize healthcare data into meaningful metrics and data sets,” Lennox-Miller said.

If Amazon wants to make a big buy, it could go after healthcare analytics company Health Catalyst; The company went public in 2019.

chronic health care

Schiebel and Lennox-Miller said Amazon could try to break into the $3.2 billion chronic care market in 2023 by building out its own specialized care services for chronic conditions.

Amazon’s latest purchase in healthcare, One Medical, already has some chronic care services. They use a care team approach to treat conditions such as diabetes and heart disease.

Lennox-Miller said Amazon could go after Bioformis, which uses remote patient monitoring technology to manage chronic diseases from home with software powered by artificial intelligence.

“They have a combination of aged care services and their equipment,” Lennox-Miller said. “If Amazon was going to scale in any of their purchases, that’s what they would see.”

Bioformis CEO Kuldeep Singh Rajput told Insider that the startup was positioning itself for an initial public offering in the next two to three years. He added that Bioformis would consider being acquired by the right partner.

“If an opportunity arises to establish a strategic partnership that allows us to accelerate our growth and patient load, we will certainly look at it,” he said. “In the short term, we are focused on growing the business.”

Schiebel agreed that Amazon is likely to move beyond One Medical’s primary care services in 2023 to delve into specialty care.

Its main challenge, Schiebel said, will be acquiring practices to expand nationwide, doing what it’s been able to do with physical locations as well as virtual care.

That’s where Walmart currently has a competitive advantage. Amazon’s biggest retail competitor has thousands of stores, and many are in rural areas home to chronically ill populations with reduced access to care.

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