Last month, I mentioned in New Health Care Rules Of The Road & Long-Term Strategy, that this is the year that Amazon.com and Alibaba.com are predicted to enter the health care market. The prospect does scare me, since Amazon has been a “category killer” for so many industries. For a company that only started in 1996, Amazon has achieved a lot and seems poised to achieve even more. Only 19 years in operation and we take Amazon for granted. The Economist said it best in the article How Far Can Amazon Go?:
Typing your credit-card number into a web browser was once considered a sign of insanity until Amazon showed how easy and safe buying things online could be. Once people had bought a book, they tried other things. Today the global e-commerce market is worth $1.5 trillion.
Add to this Amazon’s consumer-focused innovation, change-ready managers, long-term planning, and analytics described as “nearly obsessive”, and it’s obvious how Amazon has left a trail of competitors in their wake. According to Rebecca Thomson in How Amazon Changed Retailing, Amazon has brought to the market a number of innovations that are now mainstream across many industries – product reviews, personalized offers, one-click checkout process, and cloud computing to name a few. The result has been extreme customer loyalty to Amazon and “a fearsome pace of change.”
So where are they in health care? In my search of the Amazon web site, I found an Amazon health care products store – Health & Personal Care. It’s pretty standard stuff, but comes with a note that the store is “updated hourly.” However, last year amazon executives had a meeting at the Food and Drug Administration (FDA) (see Amazon Meets With FDA, Healthcare Is Likely The Topic), leading to speculation that the company is interested in a bigger health care footprint (neither Amazon nor the FDA has provided additional information on why they met).
Should managers of organizations focused on serving complex consumers worry? Ed Park, the COO of AthenaHealth summed up my thoughts quite succinctly (see What Health Care Can Learn From Amazon):
As COO and past CTO of an IT company focused on making health care work as it should, it hasn’t escaped me how much better Amazon’s consumer experience is compared to that of health care. A doctor rarely praises an electronic health record system for being easy to use or improving care. A patient easily coordinating the transfer of health information is a rarity. In sum, health care delivers consistently disappointing experiences.
My take is that, whatever the form, the Amazon effect in health care is going to be at the “customer” experience level – and in the consolidating health care market, the consumer, the consumer’s family, and the consumer’s health care professionals are the “customers.” What to do? Writing for Fast Company, Sarah Bader, notes that executives in the health and human service space have a few lessons to learn from the “retailing” giants (see 4 Things Doctors And Hospitals Can Learn From Zappos). These are the differentiators that make up the “extreme customer service” and the “joy of experience” that consumers have come to expect.
Speed & Convenience – Long a staple of other consumer industries, health care is feeling the push by consumer preference for on-demand services and easy to navigate interactions and information. And, new technologies – like remote monitoring, new app technology, and the Internet of Things – will continue to push that envelope. She cites the recent Advisory Board study (see What Do Consumers Want from Primary Care?) that for consumer’s speed/convenience trumps free service in preference. And, not lost on me was this from the study:
While the survey narrative acknowledged that the ranking may, indeed, be different if people were choosing a provider for chronic care, it also noted that many people who have a good experience with a visit for something episodic like the flu, will return to that same provider for other kinds of care.
“Different” Wait Times – In service management research, this concept used to be call “queue management.” It’s essentially helping consumers not notice wait times by giving them more control of the process – and giving them something else to do. There are a host of tactical approaches – waiting room improvements, colocation of waiting rooms with retail settings, technology-based check in processes, and more. Since much of a consumers “satisfaction” with a service is determined in their “waiting” period, this is concept that can’t be ignored. (For more, see Good Customer Service? Take A Walk In Your Consumers’ Shoes.)
Mass Customization – This is the area that Amazon has mastered – and other organizations follow. From an organizational perspective, this is “micro-devotion to the patient” combined with the power of real-time technology to create inexpensive customization of the service experience. (For more, see Consumer Focused? Think Mass Customization.)
Complete transparency – While the byzantine world of health care pricing will not end on its own, consumer demand for price transparency will eventually win out – especially since the consumer share of total health care spending is on the rise (see Consumer Out-Of-Pocket Inches UP). For example providers like Walgreens have a price menu that lays out the cost for each of its clinic services – just check it out at http://www.walgreens.com/topic/healthcare-clinic/price-menu.jsp. And managed care organizations are increasing their value to consumers by facilitating cost comparisons. For example, check out Optum’s Healthcare Cost Estimator. (For more, see Three Insurers & Non-Profit Health Care Cost Institute Creating Health Care Transparency Tool.)
In the retail world, suggestions for competing with Amazon include leveraging physical locations and brand identity – two assets that Amazon does not have. My concern is that in health care most existing physical locations for service delivery do not deliver speedy, convenient, personalized face-to-face service. And, it raises the question about consumers’ loyalty to current health care brands. Whether or not Amazon moves into the health care space, it would be wise to prepare for the “Amazon effect.”
For more, don’t miss the session by my colleague Tim Snyder, Positioning & Branding For Success: How Your Organization’s Brand Can Help Your Business Development, at the 2015 OPEN MINDS Strategy & Innovation Institute.