How could Amazon and other large commerce companies tap into the growing healthcare market?
Telemedicine
With the onset of the Covid-19 pandemic, we have seen a lot of changes in the medical care and insurance space. One of the biggest changes would, without question be the growth, acceptance, and advancement of Telemedicine. In the past few years, there has been a steady growth in the utilization of Telehealth. Many insured persons had the option for a Telehealth appointment attached to their medical insurance plan, but few participated. It was all a bit of a mystery, and I would say that most did not trust their care to a third-party physician that had no relationship to them, their insurance, or their primary care provider. It was not always a shot in the dark, as some Telehealth organizations did have relationships with insurance carriers. A few major insurance carriers offered the option through their company policies via their customer service portals to decrease the cost of in-person visits, while offering convenience for its members. When accessing a Telehealth option through one’s insurance carrier, at least you had some confidence that there was a legitimate relationship, and the costs would be in line with one’s insurance coverage.
This situation offered a threefold set of benefits:
Financial benefit to the Telemedicine provider
Economic savings for the insurance companies who often negotiated rates with the Telemedicine providers provided through coverage
Convenience and a potential cost saving to the insured
Increased Medicare and Medicaid Coverage
This was a space that was growing, albeit slowly. Behind that slow growth, was the lack of support for Telehealth visits by the Department of Health and Human Services, specifically within the Medicare and Medicaid space. Prior to the Covid-19 pandemic, very few options existed in the area of public healthcare for Telemedicine. Telemedicine was sanctioned by Medicare in an extremely limited capacity before Covid-19. Pre-pandemic, coverage through Medicare/Medicaid was only available in an extremely limited capacity, for example, patients located in rural areas with sparce medical access, etc.
During the Covid-19 pandemic health emergency, access and coverage via the federal government changed. The official HHS.Gov statement read “reimbursements for telehealth continue to evolve. The federal government, state Medicaid programs, and private insurers have expanded coverage for virtual health care services”. The coverage changed from limited access to “any health care provider who is eligible to bill Medicare can bill for telehealth services regardless of where the patient or provider is located”.
Yes. The statements above are a game-changer. A game-changer for all insurance providers as now they would be able to tap into the huge pool of patients covered by Medicare/Medicaid, patients previously not available to them.
The Marketplace Opportunity
What an opportunity! Recent coverage this week discusses how Amazon is expanding into the arena of “virtual-first primary and urgent care.”
Per the Centers for Medicare & Medicaid Services (CMS)/National Health Expenditure Data (NHE) 2019 projections (2020 figures have yet to be released), "Medicare is expected to experience the fastest spending growth (7.6 percent per year) largely as a result of having the highest projected enrollment growth.”
In the table below, it is easy to understand why Amazon, and others to come, are now moving into the healthcare market. These figures spotlight the opportunity - Medicare alone is a $799.4 billion market. Figures published in February 2021 by statista.com, merits recent industry figures with Amazon as the leading e-retailer in the US with net sales close to $280.5 billion U.S. dollars in 2019. Net income reported for Amazon is published at $11.59 billion with the biggest revenue stream being retail products.
Category 2019 Figures
Medicare $799.4 Billion
Medicaid $613.5 Billion
Private Health Insurance $1.195 Billion
Physician Expenditures $772.1 Billion
Prescription Drug Spending $369.7 Billion
With statista.com figures citing 150 million Amazon Prime members worldwide and 65% of those located in the United States, the market opportunities are vast.
Kevin Conlin, the recently retired Chair of Horizon Blue Cross Blue Shield, recently was quoted in ROI-NJ on how much big tech companies such as Amazon and Apple are impacting the healthcare sector. To quote Mr. Conlin, “There’s definitely much more big money finding its way into healthcare…..we find ourselves concerned about, what’s Amazon doing…..very nontraditional players in the health care space”.
Amazon Care
What is Amazon doing? The big question. How can they potentially tap into this market?
It is called “Amazon Care”.
Amazon Care is a newly released Telemedicine app soon to be offered through employers nationwide. Currently, Amazon Care is limited to Amazon employees in Washington state. The app steps into the Telehealth sector, providing services to medical professionals, twenty-four seven. With Amazon's expansion into the Baltimore, northern Virginia, and Washington, DC area, Amazon Care will soon include services currently limited to the west coast. Amazon offers that this is, “an opportunity for other forward-thinking employers to offer a service that helps bring high-quality care, convenience, and peace of mind.”
Per the Amazon Care site (amazon.care), the goal is to make healthcare easier for all. Amazon Care claims that it will reimagine the practice of medicine. One can open the app, engage in a text chat with a nurse, schedule a virtual care visit with a provider and if they cannot meet your needs virtually, they will bring the healthcare system to you. Amazon Care will send a healthcare provider to your home with the virtual components soon available to all fifty states. The app will offer "at-home follow-up care for labs, tests, and treatment.” Prescriptions will be delivered right to your door and a dedicated care team (called Care Medical) consisting of doctors, nurse practitioners, and registered nurses will be available.
While all Amazon employees are now entitled to Amazon Care, the push is on for other U.S. Employers to offer Amazon Care as a benefit to its employees. In this effort, Amazon quotes a 4.7 overall customer satisfaction post-visit score, with the majority of visits resolved by virtual care. Employees, when needed, will have access to an “at home, in-person exam” (at this time, limited to the Seattle area).
Currently, it looks as if the model is offered through employers as a boon benefit to their healthcare package. Soon, it will be offered to individuals for their own use.
Show Me The Costs!
As this is an insurance blog, you might be looking for information regarding the costs of these services. There is the boondoggle! Currently, for those receiving care through the portal, there is no billing charged to health insurance or one’s deductible. However, if a Care Medical provider sends prescriptions to a pharmacy or a sample to a lab, the pharmacy or lab will bill insurance. Health insurance may cover all or a portion of the costs and you will be responsible for your contracted co-pays and deductible limitations. Of note, per Amazon, Amazon Care will not affect your relationship with your healthcare provider or impact your health insurance eligibility or enrollment
As I review this app via the Amazon Care portal, I do see some hurdles. Indeed, after receiving care via the app, you will have the opportunity to have care records sent to any other provider (Primary Care Provider) when requested. However, the bigger hurdle here, at least in my mind, is that Care Medical will not submit claims for its services. You must do that yourself. Not such a big deal with commercial insurance – but much more difficult with Medicare and/or Medicaid. After all, we are a country conditioned to our HSA/FSA cards and accounts. As an insurance advocate, I can tell you that patients do not like to file paperwork. HSA and FSA accounts are without a doubt, a lazy man’s crutch.
Additionally, payments owed for services will be processed through Amazon Pay, which is linked to your Amazon.com account – and the charge card you have listed there.
As for reimbursement by your HSA or FSA? Those you will need to submit yourself. Of course, this makes sense! Can you just imagine, at least at this point, how a loss of control in federally regulated HAS/FSA accounts could happen? Right now, you can pay many balances noted via your EOB or physician bill as your responsibility through an HSA or FSA card or account linked through a bank. These are mostly self-monitored, with caution provided that all services must be “qualified medical expenses” as determined by the IRS. While they are mostly “self-monitored”, one does have to provide the name of the provider that administered the services. “Columbia Presbyterian” is a lot cleaner than “Amazon”. For all the IRS knows, you are billing for a brand-new television!
The Future
Moving forward, the regulation goals will be pushed by Amazon. Right now, providers are issued an "NPI", or a National Provider Identifier, which is a unique identification number for approved health care providers. The use of these NPI numbers facilitates the efficiency and effectiveness of electronic transmission of health information. This is how all providers currently bill both Medicare/Medicaid and commercial insurance carriers. Amazon does not have an NPI – hence the disadvantage of having to submit medical claims oneself.
We here at HealthLink are watching this space carefully. In reviewing the statistics above, there is a huge market available for Amazon and other market disrupters to jump into. The Medicare market alone was $799.4 Billion in 2019. While Amazon will be without question working at getting us all on the hook for Amazon Care, much as many are on the hook for Amazon Prime – the behind the scenes and regulatory process will be something to watch.
Get ready…. will the day come when you answer the question “Who is your Primary Care Provider” with this answer: Amazon?