Worth Watching

Worth Watching

It’s become somewhat of a parlor game to speculate on what Amazon is going to do to the healthcare industry. Everyone has an opinion, but no one really knows for sure what the company will do and since Amazon isn’t saying much all we have is conjuncture. However now that Amazon has made the deep dive into diabetes this effort will offer some clues as diabetes is the perfect test case for Amazon.

First let’s state the obvious diabetes has a huge and growing patient population. Second there isn’t one drug or device that cannot be delivered directly to the patient. Third now that snarky Alexa is transforming from ordering Tide to helping the patient manage their diabetes Amazon can if they choose to play in the pay for performance sandbox. Fourth and this cannot be understated Amazon has the scale to become an immediate player in diabetes. Throw in their vast resources combined with brand name recognition and it’s easy to see why everyone should be watching how they swim in the diabetes pool.

In many respects Amazon is actually copying what others have done just on a much larger scale. Looked at honestly Amazon is doing the same thing as Livongo, OneDrop or any of the other conventional BGM companies are doing. Yet given their huge scale and vast resources Amazon is sitting in the catbirds seat. Although they have just begun offering conventional meters this is just the first step in what we anticipate will be a long diabetes journey for the company.

It won’t be long before the company has a “smart” pen, a relationship with one or more of the CGM companies and insulin pump players. Given that pen needles and syringes are commodities this is another area they could easily enter. So, when it comes to having all the toys in the toy chest Amazon won’t have any issues.

The next step is obvious go out and buy a company that has pharmacies in all 50 states and all of a sudden, they can supply drugs too.

Think we’re done, not by a long shot as Amazon could also start offering health insurance and be the first company to offer rates based on patient performance. As we have stated for some time since every diabetes device now talks to the cloud Amazon would be able to verify patient performance.

Obviously, none of this will happen overnight but the fact is it could well happen for Amazon has the right attitude here. Unlike many of the other high-tech cash rich players who are also making the deep dive into diabetes Amazon does not want to reinvent the wheel, all they want to do is make money. They have no delusions about building the coolest toy in the toy chest or attempting to change a patient’s behavior. They simply want to take advantage of their huge scale and outstanding logistics to make money.

The company is not blind to the fact they could help produce better outcomes, but they are not building their efforts around this. Unlike everyone else who is fumbling about trying to come up with whiz bang way cool interactive toys and then finding a way a way to make money. Amazon is figuring out how to make money then everything else will follow.

Although we do not know this for a fact based on what we do know we’d say Amazon has the best vision of all the newbies to enter diabetes. They seem to understand for the majority of patients with diabetes managing diabetes is not rocket science, whereas everyone else seems to be designing systems made by engineers to be used by engineers. Or as Momma Kliff used to say why overcomplicate a simple thing.

Think for a moment what life could like for a patient using Amazon and snarky Alexa as their diabetes team. Given that Alexa knows when the patient needs additional supplies or drugs reorders could be easy. Since Alexa also knows how the patient is doing, she can offer suggestions too. Unlike other systems where the patient has little control over these interactions the patient using Alexa can tell her to shut up if they don’t want to hear what she has to say.

Again, we don’t know this for a fact, but we think Amazon understands the changing role of the patient’s physician and with the patient’s permission will allow Alexa to share her insights with the physician. This is another fundamental difference between Amazon and everyone else as they are not provincial. Everyone else who has come with their version of interconnected diabetes management (IDM) wants to control the entire system. Amazon is perfectly content to let each player in the system make money as long as they get their cut.

This cannot be understated and quite frankly is no different than how they operate today. When a consumer buys a TV or more Tide Amazon could care less which of their partners sell’s the TV or Tide as long as they get their cut. Amazon isn’t trying to protect their turf they are just trying to make money.

As we have said many times when it comes to diabetes this is all about money, who makes it, who saves it and who spends it. This isn’t and never will be about who has the coolest toy in the toy chest or who has the latest greatest whiz bang cloud enabled system. This is all about money which makes us believe of all the cash rich high-tech newbies making the deep dive Amazon has the best chance of swimming.