Amazon’s Healthcare Expansions Could Have Impacts Beyond Convenience

Amazon has been dipping its toes into the telehealth industry for the last couple of years, slowly integrating a pharmaceutical delivery service into its offerings, as well as moving forward to expand its telehealth service, Amazon Care, to more companies nationwide. While these expansions may initially be seen as a benefit for individuals looking to access those kinds of services, there could potentially be some negative implications as well for the healthcare market as a whole.

Independent telehealth operations have grown drastically in the last couple of years. Virtual appointments and inexpensive online consultations have been growing in popularity, with a particular post-COVID-19 spike in use. Though many of telehealth’s offered features create unparalleled convenience and accessibility in previously hard-to-reach markets like rural areas and underprivileged households, the growth of such services can sometimes prove to be damaging to established hospitals and healthcare institutions.

Become a Subscriber

Please purchase a subscription to continue reading this article.

Subscribe Now

For instance, clinics in rural and less populated areas function with lower funding and service large geographic areas of patients. A decrease in business for those types of institutions could have detrimental impacts on hospital funding and access to resources, making it harder for them to adequately care for patients who do require in-person services.

Many healthcare practitioners could also potentially see a decrease in pay as a direct result of working for venture-driven companies. Researchers Eileen Appelbaum and Rosemary Batt found, in a study at the Institute of New Economic Thinking, that when urgent care facilities become acquired by private equity firms, employees see a 9-12% decrease in wages as compared to traditional hospitals.

Big-money companies and venture capital firms have been buying out and combining medical institutions and companies at a rapid rate, with 715 healthcare deals made in 2018 alone, amounting to a whopping $105 billion in revenue exchange.

Amazon is entering the field hoping for a taste of the $4 trillion per year the industry produces, but profit-driven mega corporations may not hold the same standards for patient care as traditional hospital settings. Quality of care and authenticity of diagnosis may as a result become impaired in the pursuit of making an extra dime. The quality of health insurance coverage might also be affected as firms haggle with insurers for consideration in the coverage and make deals that drive up the market.

Being a one-stop-shop may be appealing from a consumer point of view, but the long-term repercussions of companies like Amazon, with seemingly endless funds, stepping into such a complex field, may further muddle the complicated state of American healthcare.