3 Things Amazon & Other Employers Need to Know About Health Tech
On the one hand, Amazon is no different from other large employers, wrestling with the healthcare benefits cost demon that squeezes both its bottom line and employees’ take-home pay. On the other, no company beyond Walmart has proven better at squeezing costs out of flabby legacy business models.
Amazon’s new virtual health clinic, Amazon Care, allows the company’s Seattle employees to consult with physicians online, schedule follow-up appointments and even set up prescription drug delivery. Once the kinks are worked out of this system, you can bet the farm that Amazon will be figuring out a way to offer similar services to the company’s 300 million active customers.
For this effort to succeed, however, there are three things Amazon – and other employers, for that matter – must keep in mind:
1. The success of telehealth depends on the underlying care model.
Without a doubt, telehealth can do great things. It gives people the ability to get a timely response to a minor medical concern, and it encourages those who might forgo or delay care because they lack transportation to get medical advice from the comfort of home.
However, the healthcare services delivered via telehealth must be woven into strong, value-based primary care versus creating yet another silo of care. The value-based primary care model gives physicians the freedom to practice medicine in the way they were trained – with a strong emphasis on time-with-patient and addressing underlying health issues, not just treating symptoms – via a very modern online platform. There’s no well-functioning healthcare system in the world not built on this kind of primary care.
Many of these physicians do use some sort of telehealth service; emailing, video conferencing and texting with patients much like what Amazon Care users are probably able to do. However, the key difference is that value-based primary care is the foundation, and telehealth a supplemental tool to further enhance it. Virtual clinics that aren’t connected to strong, value-based primary care physicians will likely produce poor results.
2. Workplace wellness programs don’t work.
The same can be said about workplace wellness programs, which have become more commonplace as wearable fitness tracking devices have become more popular.
Many employers falsely believe that by investing money into a program that incentivizes employees to take control of their health and wellness, they will see long-term cost savings. The facts, however, beg to differ.
A research brief by Rand Corporation found that workplace wellness or lifestyle management programs had a very tiny effect on employers’ healthcare cost spend. Why? The people who usually use it are the ones that are already relatively healthy and therefore inexpensive, and employers are putting more into these programs than they are often getting out. The average per-employee incentive was $762 in 2019, and for large employers, that can easily add up to a multimillion dollar line item.
When employers succeed in providing better health coverage to their employees and families, it’s because they got the care right – not by being in a step count contest.
3. It’s not about quick fixes or “appified” experiences.
The health tech space is crowded with startups that want to chip off a small piece of the broader dysfunction. Very few of these companies have had any impact, because systemic challenges required systemic solutions.
In the end, it’s the employers who pay for healthcare who will drive this change. When we’re at $20,576 in annual premiums per covered family, there’s simply no more room for costs to grow.
As Amazon and Walmart have realized, a simple redirect of the dollars employers set aside for healthcare can produce significant change. The “how” starts with employers taking a closer look at their health plans, which collectively insure nearly 160 million Americans. They can take back control by cutting ties with their old-line insurance carrier, working with a transparent benefits advisor that discloses commissions, and self-funding their employees’ medical expenses. They can ensure their employees receive low-cost, high-quality care by incentivizing them to visit value-based primary care physicians and centers of excellence, both of which use health tech only to improve their already impressive approach to care delivery.
In doing each of these things – leveraging, but fetishizing tech – employers will be at the forefront of today’s healthcare revolution; saving money, and sitting right next to Amazon. In fact, it’s Amazon who is trying to replicate the success of countless employers who are spending 20-40% less on healthcare with superior health outcomes because they built health plans around proper primary care.