Amazon has disrupted everything from bookstores to internet infrastructure — and made a lot of money along the way. But now the company is taking aim at a particularly thorny problem: healthcare. Its latest endeavor is a plan for in-house healthcare clinics, which will reportedly be piloted at its headquarters in Seattle. And this plan could save the company a lot of money.
“Frankly, the bar is really low,” said Ryan Schmid, CEO of Vera Whole Health, which operates corporate clinics for companies across the country. Innovation in primary care, the average doctor’s visit, is becoming a huge focus of bringing down costs, Schmid said.
“More and more of the people and entities that pay for healthcare — employers being a big chunk of that — are realizing the critical role that primary care plays in both improving population health but really driving down total cost of care,” he said.
In a previous interview on GeekWire’s Health Tech podcast, Schmid said Vera’s clients are able to reduce total healthcare costs by 25 percent by investing in an on-campus clinic.
The most expensive healthcare costs come from late-stage problems, like an injury that doesn’t properly heal or preventable diseases that simply aren’t prevented. If patients and employers invest up-front in primary care, they can avoid those costly health problems.
A key element of this growing trend is the idea of membership-based primary care, where employers or patients pay a flat fee for unlimited access to a doctor. Another key element is technology.
“The more efficient our healthcare system can be, the better we can keep costs down for patients,” Dr. Navya Mysore said via email. Mysore is a provider at a New York clinic of One Medical, a membership-based primary care company that has invested heavily in its technology platform to keep patients healthy and costs low.
“Virtual visits can be a less expensive alternative for after-hours treatment than a visit to the ER or urgent care; messaging with doctors allows patients to ask questions in the moment, rather than waiting for an available appointment; and evolved electronic health records keep information centralized, helping to avoid unnecessary testing and re-testing,” Mysore said.
Other primary care solutions are going even further: Seattle startup 98point6 charges users $10 a month for unlimited access to primary care doctors through its entirely tech-based “virtual clinic,” essentially a doctor’s office in an app.
This approach to primary care is a dramatic departure from the normal model, particularly when it comes to finances. Normally, patients are charged on a per-service basis: They spend money and providers make money based on how many services a patient receives. That means people often avoid seeing a provider, sometimes delaying care until their health problem becomes severe.
Schmid and others in the industry call this system “sick care.”
“Having an employer-sponsored clinic is not, in and of itself, the solution to driving down total cost of care,” Schmid said. “If all an employer does is provide convenient access to what we call ‘sick care’… it can ultimately drive up total cost of care.”
But with membership-based care, patients have an incentive to go to the doctor earlier and more often, and providers have an incentive to help them get better as quickly as possible. Basically, everyone is motivated to focus on health and preventative care.
“Our members are also able to build deep relationships with their primary care providers to improve overall health and wellness. We want to prevent illness, burn out and help manage stress and physical health for all of our patients,” Mysore said of the membership model.
Amazon CEO Jeff Bezos has shown interest in this idea in the past: He was an early backer of Qliance, a membership-based primary care company that eventually folded last year. When it comes to technology, Amazon is also dominant. Technology is a central focus of the company’s new joint healthcare venture with JPMorgan Chase and Berkshire Hathaway.
Schmid said an incentive system like this will be essential to the success of Amazon’s project, and he said the company’s chances of success are pretty good.
“Amazon is full of very bright people. They’re very good at innovating. They’ve got great processes. They’ve obviously got the capital. So I think they have every possible ability to be successful on this,” he said.