Perhaps every insurer’s worst fear is that Amazon will eventually launch its own health plan. The company has given one indication after another that this, too, is a very real possibility. Amazon’s eventual entrance into healthcare is big news for incumbent insurers because it validates the supposition that Amazon may one day disintermediate health plans and sell its services directly to employers.
Having now worked at CVS, several Blue Cross plans and UnitedHealth Group’s Optum, I can definitively conclude these disintermediation fears are not unfounded. Driven by the digital revolution, consumer expectations of a seamless healthcare experience that is both transparent and affordable have finally caught up with the industry. If it can be this easy to shop and purchase products and services on Amazon’s marketplace, why should healthcare be any different?
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Healthcare consumerism is inevitably on the rise, but the healthcare industry has been slow to catch up with the
Digital health offerings exploded in 2020, with plenty of partners to pick from. So now the question is how should employers choose which digital partnerships to pursue in the age of Amazon-led healthcare consumerism? Several considerations are explored below:
Know what to look for when purchasing the consumer experience
Selecting digital health partners will always be a rigorous, tedious process, but the first evaluation criteria should be whether the vendor has built a meaningful relationship with their existing user base.
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Has the digital health company cultivated a ground-up consumer following with a strong willingness to pay? If a vendor has had success convincing consumers to purchase its services out-of-pocket, for example, this suggests the user experience is strong enough for consumers to commit a share of their wallet to the vendor.
If a digital health partner can solve for a significant employee abrasion point that is costly to the employee from a user experience perspective, it can help retain employees and as employers are well aware, employee turnover costs are significant.
Create transparency – and build it into the DNA of your partnership model
Consumers expect upfront knowledge on critical care purchase drivers. “How likely am I to need this service, how much will it cost me, and is the price commensurate with the value I would get?”
As we think about why Amazon matters in this context, it’s because it offers comprehensive product overviews, a robust pricing comparison tool and a user review system that sheds light on all dark corners of a purchasing experience.
What does this mean for employers? To start, they might wish to partner with companies who are upfront with consumers on their payment options, prices, subscription models, and so forth — even if their benefits are paying for a service. Employers themselves should seek partners whose modus operandi is to be transparent with the market.
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Seek new ways to offer more affordability
Amazon is committed to eliminating unnecessary mark-ups in the supply chain and has experimented with many innovative direct-to-consumer products — case in point, its recent
Employers looking at digital health partners should ask if this company is increasing
Partners who check the box on such questions are much more likely to help employers build the brand equity with the market that they seek to create.
Offer enough choices that meet consumers where they are
Employers can have a fairly transactional view of the world given the number of contractual obligations they manage day to day. But setting those aside, they need to embrace the fact that in the world of healthcare consumerism, choice is a good thing.
Consumers reward companies that offer them choice with loyalty and employers need loyalty both for retention and to better underwrite their healthcare cost obligations. It may seem basic, but creating choice is
Make no mistake: there will come a day when digital health will fully disrupt the healthcare delivery model. Led by Amazon and others, who are infusing the market with an abundance of choice, it’s become abundantly clear that a differentiated and thought-out digital health partnership strategy is now table stakes.
