Amazon (Nasdaq: AMZN) has reportedly approached CVS Health (NYSE: CVS) in order to expand the coverage of its Amazon Care services, according to a report from Business Insider.
CVS Health is the parent company of the health insurer Aetna, which Amazon has reportedly reached out to, among other insurers.
The move suggests that Amazon is moving along with Amazon Care — its on-demand health service that has at-home care aspirations — quicker than what may have been expected.
“Amazon operates like dog years in reverse,” Robin Gaster, an Amazon expert, recently told Home Health Care News. “One human year is seven dog years, right? Well, one human year is seven Amazon years too. They move quickly.”
Gaster is the author of the book “Behemoth, Amazon Rising: Power and Seduction in the Age of Amazon.” He is also a visiting scholar at George Washington University, an expert on business innovation and the president of the data consulting company Incumetrics.
Amazon’s journey with Amazon Care is not unusual for the company. The process is such: roll out the program to a select group of its own employees, widen the market and then eventually apply its usage to the general public.
Amazon announced in March that it was expanding Amazon Care from just its employees in Washington to the entire country. Months later, it announced it would be expanding mental health services to nearly a million workers, and that it was dipping its toes into diagnostics and pharmaceuticals as well.
Amazon Care works through a mobile app, offering video, text and sometimes in-person visits — even in the home. The fitness manufacturer Precor is among the employers using the service, and others have been rumored.
Amazon Care is also a founding member of Moving Health Home, a Washington, D.C.-based coalition that advocates for more favorable legislation for home-based care.
CVS Health and other insurers — reportedly some Blue Cross affiliates — have not bitten on the offer to pay for Amazon Care yet. Why they did not is still not totally clear.
“The report is largely undefined. It doesn’t say anything about a partnership, so no strategic insight,” Gaster told HHCN, referring to the Business Insider report. “Does that mean it wants to charge more than Aetna wants to pay, that there is something weird about the way it wants to charge? Amazon traditionally operates with a positive cash cycle, but to be honest, I don’t think that’s it.”
But what is clear is why Amazon is approaching them in the first place. Health insurers, especially the large ones like Aetna, have a lot of power in health care. Aetna has nearly 24 million members on its own.
“What does ‘in its efforts to expand coverage’ mean?” Gaster said. “What coverage and whose? If it’s just Amazon offering prescription delivery services, then this is simply Amazon seeking to build out its delivery business in health care.”
Accessing that amount of people, or even a portion of them, would put Amazon Care in an entirely different stratosphere than it is now, where it has access to mostly just its workforce — which still represents nearly a million people in the U.S. alone.
It also seems that Amazon has caught onto the trends, as it’s wont to do. Not only is it focused on the home, but it also reportedly tried to enter into “value-based” arrangements with the insurers, according to Business Insider.
Right now, though, it appears that Amazon Care is not set up in a way that insurers find desirable. It could be that, or it could be that the service and platform is new enough that insurers aren’t convinced yet that they can lower costs in value-based arrangements.
Amazon is one of the worldwide leaders in all things data, but for now, it could be lacking in that care department.
“I think Amazon is going to be a classic disruptor in the space,” Gaster previously told HHCN. “Amazon has made a business out of disintermediating existing businesses and existing markets. And as far as I can see, that’s exactly what they’re going to do here. It just seems that the health care space is pretty well set up for what they want to do, … and businesses are absolutely desperate to try and find cheaper ways to address health issues.”
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