Amazon Care Hits a Speed Bump

The latest news on Amazon Care, a telehealth-based primary care service, is that their recent attempts to partner with insurance companies have been rebuffed. While the reporting offered various theories to explain the failure, there are two very obvious issues:

Who pays? Currently, a handful of employers have contracted directly with Amazon Care, paying a monthly fee for each employee to have access to services. If an insurance company were to partner with Amazon Care, they would be required to pay for its services as a covered benefit in their health plans. The question of “who pays” has been faced by other ‘disruptors’, and answers have been found. For example, in the early days of Minute Clinic (part of CVS Health), their services were not in-network with most insurers, which led to slow uptake by members. In response, Minute Clinic first negotiated reimbursement rates at the specialist level, and later at the primary care level, including mirroring member copay structures for traditional provider services. This allowed Minute Clinic to reach insured patients via their existing plans, a key piece of their business strategy.

What data will Amazon Care have access to? This may be the biggest sticking point, given the possibility that Amazon would find a way to use members’ clinical and utilization data – combined with their online and retail shopping data – to compete against insurance companies. Already a threat to health care delivery as we know it today, Amazon has a history of industry ambush and takeover – see book stores, retail in general, and, most recently, prescription drugs.

The question for employers is “Would your health benefit program, and your plan members, benefit from Amazon Care?” If the answer is yes, then it may be just a matter of time before the pressure to offer it starts to build. In Mercer’s latest Health on Demand Survey, 2,000 working Americans were asked how much they trusted various sources to provide them with quality health care solutions. Physicians came first (in-person then virtual), followed immediately by employers. But right behind employers came online retailers.

While insurance companies may be keeping Amazon Care at arm’s length for now, the battle has just begun. We will definitely be keeping an eye on Amazon Care.

Tracy Watts
by Tracy Watts

Senior Partner, National Leader for U.S. Health Policy

Kate Brown
by Kate Brown

Leader, Center for Health Innovation, Mercer

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