PART ONE: Amazon Prime Health
On May 15th members of the Health Plan Alliance and the staff of Spring Street Exchange gathered in a stylish New Mexican restaurant near Lake Carolyn in Irving, Texas. During the pre-event dinner the health plan audience quickly learned they had not registered for a one-day conference. Instead, Nancy Wise graciously welcomed everyone to their first day as consultants for a new, undefined service to be named Amazon Prime Health. The following day, the attendees would make the short trip to the Alliance’s Irving headquarters to take part in a fast-paced, challenging strategic visioning exercise. The goal of the exercise was to step into the mindset of a potential health care disruptor and then envision and build a Millennial-targeted health care service under the Amazon Prime brand.
[Big Tech] are not trying to change the [healthcare] system. They are trying to do something totally different. – workshop participant
When viewed from the perspective of other countries, health care in the U.S. is seen as expensive, dangerous, unpopular, inconsistent. This inefficiency and lack of trust present an opportunity for massive dynamic tech companies (Apple, Google, Facebook, Microsoft, Apple) to use their considerable revenues and market power to try to change how health care works. In order for health care companies to compete with these technological titans we need to understand how they might break into the industry and alter the landscape to better fit their vision of health care. The first of two scenarios through which Nancy would lead the Alliance membership was designed to help health plan leaders see how Amazon could disrupt health care by collaboratively developing Amazon Prime Health.
How can I be the payer that pays for something different?
We’ve hired people from non-health care companies to be a catalyst to a different way of thinking. It has been slow going.
[Big Tech] have really nothing to lose. They aren’t trying to change the [health care] system. They are trying to do something totally different.
We’re not health plans, we’re sick plans. How do we affect the 99% of what people do, rather than the 1% of what they do when they’re sick?
Scenario 1: Designing Amazon Prime Health
In this first scenario, Alliance members were challenged to define and develop Amazon Prime Health. Besides the service’s name, the only parameter provided to the group was the target market for the service: Millennials. Spring Street furnished the participants with an extensive Data Pack containing statistics and detailed research about Amazon and Millennial consumers. The Data Pack acted as a tool to support the development of Amazon Prime Health. After reviewing the Data Pack, Nancy led the group through three steps in order to build out Prime Health:
Step 1: How will Amazon Prime Health serve the Millennial market?
The group broadly discussed what components Millennials might want from Prime Health and from health care in general. Based on the initial conversation, we were able to roll up the Alliance members’ ideas into three broad product/service categories:
A wellness service designed to keep healthy Millennials interested in staying well
An employer-oriented Millennial product offered alongside conventional employer-sponsored insurance
A supplementary product for Millennials with high-deductible health plans, catastrophic coverage, or no health insurance
A vote was held to determine which hypothetical product the group would develop. After a split vote between the first and third options, the health plan leaders in the room broke the tie through rousing displays of enthusiasm for their preferred product design. In a show of applause, hollering, and table-banging that would’ve impressed even the most contentious British House of Commons, it was decided that the group would create a supplementary product for Millennials under the Prime Health brand.
Step 2: Designing the Prime Health supplementary product
Through independent brainstorming and group-based problem-solving exercises, Nancy led the Alliance members in the development of Amazon Prime Health. What took shape was a unique product-service hybrid design meant to fill an unmet need for Millennial health care consumers: getting access to convenient, affordable care. The following elements were identified as essential elements of Prime Health:
Services must be available on demand
Health care services must include direct primary care and wellness services
Artifical intelligence-enabled diagnostic tools and an extensive video library should be included in order to support what the group viewed as critical for “self-help”
Prime Health would require a unique provider network. The group identified three essential factors for network development and maintenance:
Participation in the Prime Health network would be voluntary
All providers and services within the network must be ratable based on the Amazon consumer star-rating and review model
Pricing for services must be either fixed or fully transparent
All providers must accept online bookings through the Prime Health website/portal and be capable of interacting with patients digitally (e.g., telemedicine)
Prime Health would include peer connection and interaction tools. While star-ratings and reviews are important parts of interaction when shopping on Amazon, Prime Health would provide secure forums for members to discuss their health experiences with peers
Two other key elements would be the integration and active use of personal health records (PHR) and electronic health records (EHR). Amazon currently has the ability to mine health records for deep analysis and clinical applications, both of which could help engage Prime Health members while supporting its provider network
Prime Health also offers the opportunity to gamify elements of health care and wellness in order to encourage certain actions by offering Amazon credit or select discounts for taking positive health actions across both the wellness and preventative care spectrums
Prime Health members would receive special pricing on select health (and health-adjacent) services and products
Finally, participants broadly agreed that Prime Health would be available to Amazon Prime members. Further, the service would be sold at a fixed $99 annual fee
As a whole, the Alliance members developed Amazon Prime Health to fill the care gap often created by extremely high deductibles. Participants floated the idea that the service could complement high-deductible and catastrophic health plans, or even that health plan products could be designed to be specifically paired with Prime Health. This would position Prime Health to act as a truly disruptive force by targeting an underserved population, and at a price point achievable due to the scale at which Amazon could sell Prime Health.
Step 3: Discussing how Prime Health affects the market
After several intense hours of building out Prime Health, our health plan leaders’ minds were full of ideas for how this brand-new service would change the healthcare market as we know it:
Prime health creates a “new definition of a network.”
Now I can engage new and existing members that I could never reach before.
We could “bring Prime Health in to support the Medicaid population” or “build a catastrophic plan to go behind [Prime Health].”
It’s not that Amazon is going to want to partner with me, but Amazon is going to come out with a product. We’re either a valued part of the [Prime Health] network, or we’re out of business.
As Nancy led the wrap-up for the morning’s scenario she left everyone with a thought about what it means to stay competitive and be disruptive in today’s health care market:
If everyone is doing it, it may be new, and it be required for business, but it is not strategic.
In Part 2, we will introduce Spring Street’s Change Model and explore how understanding the unique benefits of innovation and disruption might subtly, and potentially suddenly, alter the health care industry.