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Amazon Rx to Make a Mark, SDOH Efforts Lack Data, Telehealth Impact Amid COVID-The HSB Blog 11/24/20

Our Take: Another Arrow in the Quill of Disruption-Amazon Pharmacy to Make its Mark

Our Take: On November 17th, Amazon announced the launch of Amazon Pharmacy in the U.S (technically Amazon Pharmacy and Amazon Prime prescription savings benefit-PrimeRx). This new service allows customers to purchase prescriptions through the Amazon app using most forms of insurance as well as 24/7 access to consultations with pharmacists. With PrimeRx. Prime members can purchase branded and generic prescriptions at discounted rates on the app or at 50K pharmacies across the U.S with free two-day delivery or in-store pickup and automatic enrollment included in the program. While the addition of a broader pharmacy offering takes Amazon more deeply into the prescription drug business, over time we expect this expansion will succeed and position the company well to disrupt already existing pharmacy giants. Given its strong existing customer base, deep reserve of existing financial and distribution resources, and low prices combined with customers increasing reliance on online shopping platforms during COVID, we expect Amazon to broadly disrupt the market for retail pharmaceutical sales.

Description: Amazon began entering the pharmaceutical market with its acquisition of PillPack in 2018, and appears poised to apply lessons learned from that acquisition to deepen penetration into the pharmaceutical market. Amazon pharmacy will offer 80% off generic medications and 40% off brand scripts for prime members, providing better deals than purchases made at brick mortar competitors. The company also provides transparency, showing the cost difference between paying for medications out of pocket or using health insurance. The service will feature a two-day delivery option for Prime members as well as easy to navigate platforms and pharmacists to answer questions related to medications. Customers can also use other Amazon devices such as Alexa as another means of purchasing medications and for medication related reminders. As a result of these features fulfilled through Amazon’s partnership with Inside RX (a subsidiary of CI’s Evernorth), other retail giants already in the pharmaceutical market are looking to add features such as delivery tracking, price transparency, and lower prices to remain competitive in the market. Large retailers, such as Walmart, who are already engaged in the pharmacy business are also expected to increase physical presence and add pharmacy delivery in an attempt to compete with Amazon’s latest additions. This expansion puts Amazon in more direct competition with pharmacy giants CVS Health Corp. and Walgreens Boots Alliance well as with newer online pharmacies such as GoodRx.

Implications: Given Amazon’s deep bench of distribution expertise along with Amazon’s user friendly and familiar online interface, we see high likelihood of successfully disrupting the market. As the COVID pandemic continues to cast a shadow on in-person retail, online first will continue to take share as the default choice whenever possible, further allowing Amazon to deepen ties with U.S. Prime members, now numbering over 100 million. We also see this as a threat to other online pharmacy offerings like GoodRx given the relative size difference in subscriber bases of well over 10x, but do not believe it to be the primary target (more in a later post). The extension of online pharmacy, where medications can be purchased from the comfort of your own home at competitive or more steeply discounted prices and arrive within two days. This will be particularly important during this next wave of COVID and position Amazon as the default option for prescriptions over the next 9-12, months allowing it to solidify the change in consumer behavior.In addition, the prospect of steadily increasing case counts and additional COVID restrictions will likely further limit office/facilities-based work and trips outside the home, undercutting one of the brick and mortar store’s main competitive advantages; proximity and ability to serve urgent needs. For example, Amazon could integrate Whole Foods to help supply those who require prescriptions for emergent needs by supplanting it's free one hour grocery pickup, (launched in October), which has been very popular with new customers who account for over ⅓ of curbside orders. Of course, as Amazon always does, we expect them to continually iterate, gather data and develop new options which will further enhance their chance of success.

Race and Health A lack of Data on Race Hampers Efforts to Tackle Inequalities

Event: The most recent issue of The Economist published an article on “Race and Health” noting that the lack of solid data and data collection hampers efforts to address inequalities. The article notes that “COVID-19 has laid bare countries broad racial inequities in health and exacerbated them… [and] also highlighted the scarcity of decent data on ethnicity and race.” In addition, it noted that much like the debate on gender equality there is “too much intuitive argument and too little data”, however, unlike gender, many remain uneasy about asking for and collecting information on ethnicity and race.

Description: During the initial months of the pandemic in New York, black and Hispanic children were 2 times more likely to lose a parent/caregiver to COVID than those who were white or Asian. In England a black man is nearly 4 times more likely to die from the disease than a man of similar age. During the peak of the pandemic, due to scarcity of data, only 7% of reports about COVID deaths recorded data on ethnicity. While it is understandable that many groups such as Jews and Roma or Romani of Europe are opposed to registering race or ethnicity since they have seen how it can be used detrimentally against them, this would argue for using data privacy and security to de identify data rather than not collecting it. For example, after Brazil began collecting data in the late 1990s broken down by five different skin colors the gulf in infant mortality between indigenous and white babies became apparent, simultaneously demonstrating the need for a move away from catch all terms (such as BAME in Britain-Black, Asian, Minority or Ethnic)..

Implications: The COVID pandemic has highlighted the need for better collection and analysis of more granular data on race and ethnicity to address inequities as well as the potential role for digital tools to help fill this gap. As the Brazilian example demonstrates, the only way to tackle the inequalities and injustices is by bringing up statistical visibility and ensuring that data has the right degrees of granularity. In addition, researchers need to highlight that race itself is not the cause of disparities but rather a reflection of policy failures such as access to education, healthcare and employment.

Telehealth Impact During COVID-19

Event: On November 17th, the COVID-19 Healthcare Coalition published the Telehealth Impact Physician Survey, which captured the opinions of 1,594 physicians and other qualified healthcare professionals. More than 75% of respondents said telehealth enabled them to provide quality care; however, barriers and challenges still exist and are anticipated beyond the COVID pandemic.

Description: The survey has allowed telehealth to prove its value as a safe, effective, and necessary care delivery option that can provide quality care to patients when and where they need it. The survey findings also show strong support for telehealth from physicians and qualified healthcare professionals. Of those surveyed, 60% reported telehealth has improved the health of their patients, 68% report they’re motivated to increase telehealth use in their practices, 55% indicated that telehealth has improved the satisfaction of their work, and 80% indicated that telehealth improved the timeliness of care for their patients who are also in favor of using telehealth for care. The survey also found that about 73% of respondents indicated that no or low reimbursement would be a major challenge post-COVID, and more than 64% said technology challenges exist for patients, serving as a barrier to the sustainable use of telehealth. Barriers and challenges have to be addressed because telehealth services are anticipated to be highly used even after the pandemic.

Implications: Telehealth and remote care services have proven critical to the management of COVID and the future of healthcare, especially since it’s here to stay. Future telehealth policies should be data-driven and seek to address the challenges for patients and providers alike. Telehealth has helped address several issues such as provider shortages and the growing gap of access to care in the most vulnerable populations. There should be further exploration to ensure high-quality delivery of telehealth and sustainability over time. Government officials, physicians, and other stakeholders need to work together to address challenges that remain for patients, including lack of access to technology, internet, low broadband connection, and low digital literacy.

Financial Problems aren't the Only Reason that Patients don't Pay their Medical Bills on Time

Event: Health Leaders Media reported that a recent survey by Waystar found a number of varied reasons why patients don't pay their medical bills on time, with financial problems being only one among many. The study found that while 48% of those surveyed had been late on a medical bill, only 43% said they fully understood their bill and 56% had received a surprise medical bill. Overall the study noted that patients are confused, unaware, or misinformed of their medical bill information, all of which contribute to keeping them from paying on time.

Description: Waystar surveyed 1,000 consumers who have received a medical bill from a hospital or specialty provider for medical treatment within the last six months. They found that financial difficulties were cited by only 51% of those surveyed. However, over a third (37%) assumed their insurance would pay it, while 20% were unclear about how much they owed while another 20% assumed their bill was incorrect. The article went on to note that sometimes “the bills themselves stood in the way of people paying” with only 57% of those surveyed not fully understanding their most recent medical bill. In addition, although 46% of consumers state that their provider proactively gave them an upfront cost estimate for healthcare services, they also stated that those estimates were often inaccurate.

Implications: Medical bills are easily misconstrued by patients due to misconceptions, lack of clarity, lack of communication, and erroneous out-of-pocket estimates. In looking to improve billing and collections payers and providers should look to simplicity and clearer language as much as financial assistance. In addition, there needs to be a clearer end-to-end process for patients to understand and pay their medical bills. This could include clarifying the payment procedure with the patient, setting up an automatic payment system, advising patients of the out-of-pocket costs sooner, or setting up push notifications to the patients to pay on time. More work is needed to make this a user-friendly and seamless process for patients.

Digital Mental Health on the Rise, but Engagement, Access, and Trust Continue to be Barriers

Event: On November 17th, an article in Mobihealthnews noted that although digital mental health has raised significant amounts of capital and gained much broader adoption, it is still hampered by a lack of clear efficacy standards, poor engagement and user trust issues. The article which reviews a new report from WISH entitled, the Digital Mental Health Revolution: Transforming Care Through Innovation and Scale-noted that despite the fact that about one in five people are affected by mental health issues and an estimated one in twenty disabled by mental health issues, getting people into care remains a barrier.

Description: Since the beginning of the pandemic, 75% of some populations are experiencing psychological distress, and many are developing mental illness for the first time. In order to combat this and other existing mental health issues, providers and payers have turned to digital therapies to help expand care. Nevertheless a gap remains between what people need and what existing systems can deliver. The WISH report identifies 4 key attributes that should be central to decisions by health systems, developers, investors, and users on what to buy and build in the future: 1) moving apps to an integrated operating system of care, 2) developing tools that are highly effective and engaging, 3) addressing inequalities, and 4) building trust in digital tools. Revolutionizing in those areas will accelerate progress, close the gap, and overcome barriers that include access, relevance, privacy, and security. In addition, the report points out that despite the explosion of mental health tools, with over 10,000 mental health apps currently available, many of these tools have underperformed, leaving a gap in “effective coverage” for mental health disorders.

Implications: While the COVID pandemic has helped advance the technology and digital tools available to address the ongoing mental health crisis, with digital tools at the forefront, as few as 10% benefit from traditional mental health services, even in well resourced countries. Policy makers need to distinguish between heavily researched tools which face low rates of consumer adoption and commercially driven innovations, which have less research to support effectiveness, but see higher engagement rates. Among other things the report suggests focusing on tools that have proven effectiveness, low cost and engagement with large volumes of patients worldwide such as : instant crisis text messaging, digitized or gamified versions of cognitive behavioral therapy (CBT) and online training for patient facing staff. In addition the report highlighted the need to include “all nationalities, ethnicities, ages, and [those with] specific disabilities in addressing mental health issues.

K Health raises $42 Million to Expand its AI-powered Telemedicine Platform

Event: Venture Beat released an article that K Health, a startup with a software platform that digitally connects patients to doctors has raised $42 million to expand its AI-powered telemedicine platform, bringing its total amount raised to $139.3 million. According to the article, K Health’s platform takes into account medical histories, the clinical outcomes of millions of people, and the experience of thousands of doctors to deliver treatment information on hundreds of diseases. K Health's smartphone app, “K”, boasts more than 4M members and, according to the company is growing 10K-15K members per month.

Description: K facilitates in-app visits from doctors that K users can speak to for a $19 one-time fee or for $9 per month. No insurance is required. The doctors review an AI-assisted breakdown of the patient’s symptoms and then diagnose, prescribe, or refer the patient as appropriate. K Health users can also text message doctors at any time. Mental health services are offered, and prescribed medication can be delivered to users for $34 per month. Additionally, K Health rolls out test maps that shows where people are reporting COVID symptoms and a nationwide map that shows all COVID testing centers. The company announced it will collaborate with the Mayo Clinic to integrate the health system’s Clinic Data Analytics Platform to support Mayo patients and doctors. Since the onset of the COVID pandemic, more than one million new people have turned to K Health for their primary care and mental health needs. K Health has grown 1,000% just this year alone.

Implications: According to a study published by the U.S. Centers for Disease Control and Prevention (CDC) millions of patients wait at least two hours to see a health care provider. As the pandemic is continuing, the market for chat-based healthcare solutions is growing. Tech giants like IBM, Facebook, and Microsoft have partnered with governments and private industry to roll out chatbot-based solutions in response, as have a number of startups. In addition, the pandemic has accelerated the move to remote and virtual care. Even before the pandemic, 9 out of 10 seniors said they’d prefer to stay in their homes over the next 10 years, highlighting the need for these types of solutions. In addition, K Health can help bridge the gap for those without health insurance or in underserved communities, with prices starting at $9 per month to chat with a doctor or $19 for a one-time session and mental health services for $34 per month.


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