Amazon's (AMZN -8.43%) ambitions in healthcare have always been something of mystery, much like many of the experiments at the famously startup-minded tech giant. The company acquired online pharmacy PillPack last year for $1 billion, and it recently partnered with Berkshire Hathaway and JPMorgan Chase on a healthcare joint venture, called Haven, that aims to disrupt the healthcare industry as we know it.
Amazon has also gotten involved in shipping medical supplies and even making its own medical devices. Late last week, the company took one of its biggest steps yet in this $3.5 trillion industry, launching healthcare on Alexa, its voice-activated technology.
Dr. Alexa will see you now
After meeting the protocols set by the Health Insurance Portability and Accountability Act (HIPAA), the law that governs privacy around medical records, Amazon said in a blog post that Alexa is now partnering with healthcare companies to answer patient questions and provide pertinent information.
Amazon said that Alexa can now help patients do things like make a doctor's appointment or get post-op results. The company has initially partnered with six different companies to provide such services, but expects to add more soon.
- Through Express Scripts, they can check the status of a home delivery prescription or get notifications on when the prescription is shipped.
- With Livongo, patients can get their last blood sugar reading and information on blood sugar measurement trends.
- Customers can find an urgent care center and make an appointment with Atrium Health or Swedish Health Connected.
- Parents can communicate recovery progress and get post-op results with Boston Children's Hospital.
A good use case
Voice-activated technology has grown through fits and starts. Though about half of American households now own a smart speaker such as an Amazon Echo or Google Home from Alphabet, many use it only for basic functions like playing music or checking for information such as the weather forecast. Companies like Alphabet have also given away smart speakers through partnerships with telecoms like Verizon to boost adoption.
Integrating smart speakers into carrying out the tasks of daily life as effectively as smartphones have hasn't been as easy. However, healthcare needs may be one of the clearest cases where voice-activated technology has advantages over a smartphone or a computer. Recovering patients, the elderly, or the infirm may not be able to use a smartphone to get vital healthcare data, make an appointment, or check on a prescription delivery. Even if they can, voice-activated technology likely provides a level of convenience that patients will appreciate.
Adding healthcare skills may be one of the best ways for Amazon to spur adoption of Alexa and its Echo devices and gain a beachhead in the trillion-dollar healthcare industry.
The long game
Amazon has built an empire in part from its commitment to long-term thinking, and its healthcare approach is no different. While its goal with Alexa for now seems to be building out a database of skills that patients can take advantage of, further down the road you can see the various pieces in its healthcare puzzle begin to fit together.
Consumers can use Alexa to order their prescriptions from PillPack, hospitals can order medical supplies and devices directly from Amazon using Alexa, and Amazon will gather data to inform all aspects of its burgeoning healthcare venture as people use Alexa like a WebMD portal, asking all manner of healthcare-related questions.
Now that Amazon is worth nearly $1 trillion, the company needs to tackle big industries and big problems if it wants to keep growing at a significant rate. That why it's increasingly focused on the $660 billion supermarket industry.
But the healthcare sector, which represents about one-sixth of the U.S. economy, is an even bigger opportunity. Whether Amazon is able to disrupt the industry that Berkshire Hathaway CEO Warren Buffett called a "hungry tapeworm" remains to be seen, as do Amazon's efforts to help consumers deal with current bureaucratic difficulties.
One thing does seem clear, though. With its reputation for customer satisfaction, willingness to experiment, and billions in capital, Amazon is as good a bet as any other to shake up the sector.