Bill Kopitke, Amazon Business' head of healthcare, says the company is "bringing meaningful change to purchasing systems" for the healthcare industry.
Long before the COVID-19 pandemic dominated the focus of healthcare executives, a looming business competitor generated speculation and curiosity: Amazon.
Like other major tech companies, Amazon has had an interest in growing its presence in healthcare in recent years, whether through the acquisition of PillPack to the formation of Haven, a joint venture the company created with JPMorgan Chase and Berkshire Hathaway.
Many hospital and health system executives have wondered what the endgame is for the Seattle-based conglomerate and how it will affect their healthcare businesses, as well as the care their patients receive.
Bill Kopitke, head of healthcare for Amazon Business, spoke with HealthLeaders in an e-mail interview about the tech giant's plans to compete in the industry as well as how the company is meeting the increasing PPE demand amid the pandemic and flu season.
This transcript has been lightly edited for brevity and clarity.
HealthLeaders: What is one thing about Amazon's healthcare plans that you wish our audience of hospital and health system executives better understood?
Bill Kopitke: Amazon Business is building on the convenient buying experience and technology that has delighted consumers on the Amazon.com shopping experience.
However, we know businesses, especially healthcare providers, have different needs. Amazon Business is continually developing features and programs that will both meet healthcare provider requirements and innovate the healthcare supply chain. Sourcing, ordering, and fulfillment of supplies should not be a myopic or painful experience for hospitals or health systems.
For example, we know it is important to our customers that their buyers should have purchasing control capabilities on Amazon Business, which is why Business Prime members can tailor a Guided Buying experience to recommend, warn, or prohibit purchases. Customers also gain access to workflow approval and real-time analytics with the ability to immediately dive into order details.
Another example is the capability for our customers to focus only on non-contract spend, so that their orders do not conflict with GPO commitments. According to Forrester Research, this can be a 555% return on investment with Amazon Business.
HL: Why should healthcare executives and consumers trust the growing interest among large technology companies in the healthcare space given the effects that we've seen in retail, transportation, etc.?
Kopitke: Whether you work in the healthcare industry or just personally experience it, we can all admit it has opportunities for improvement. The widespread adoption of Amazon Business by healthcare providers demonstrates that we are bringing meaningful change to purchasing systems. At Amazon, we continually listen to feedback and make improvements in order to help customers access the supplies they need—including healthcare organizations.
We have seen considerable technological advancements in the supply chain process that greatly increases the speed and accuracy to improve the purchasing experience. For example, one area of investment is in the ability to harness massive amounts of information to power product recommendations and automate common tasks, which is saving health systems time and can improve the quality of care through artificial intelligence (AI) and machine learning (ML).
Another example where we are helping customers with efficiency and quality of care is in response to the impact of the pandemic. We created COVID-19 Supplies, which prioritizes PPE for healthcare and government organizations. This ensures frontline workers can easily find and purchase the supplies they need to help protect themselves amidst the pandemic.
During the peak of the supply scarcity time, Amazon Business delivered more than 200 million essential health and safety products to tens of thousands of locations across the U.S., including hotspots like New York City and rural counties not served by traditional suppliers. More than half of the top-100 hospital systems in the country and 44 of the 50 state governments received items from COVID-19 Supplies.
HL: What would you say are the most significant headwinds to Amazon's healthcare plans?
Kopitke: The pandemic has created challenges for all organizations, including Amazon. Our customer-focused solutions to these headwinds include, for example, supporting health systems who have needed to equip staff and clinicians with work-from-home supplies. Amazon Business has features that allow customers to create curated supply lists so health systems can direct employees to these authorized items, such as physicians who are encouraged to do more virtual care.
Eighty percent of facilities still don’t have one or more types of PPE supply they need, according to Get Us PPE’s Supply Index Report. The spike in demand for PPE created significant shortages that left many frontline workers without all of the essential supplies they need. Fulfilling PPE orders has been a struggle for many manufacturers who are dependent on traditional procurement processes, instead of e-commerce with technologically advanced logistics management solutions.
We’ve worked with our selling partners to support them as they pivot or expand their manufacturing operations. Take the hands-on learning solutions provider, hand2mind—they’re an Amazon Business education selling partner who shifted their operations to manufacture and sell PPE to healthcare and government organizations in the early stages of the pandemic. By following demand and accessing a broader customer base using our online store, hand2mind was able to get essential supplies into the hands of people who needed it most.
HL: If we were to have this conversation five years from now, what do you think would be the most significant and realistic changes to the healthcare industry and what aspects of the industry do you expect to remain relatively the same?
The pandemic foreshadowed the digital adoption we expect to continue in healthcare. In the next five years, customers anticipate healthcare providers will accelerate the adoption of e-commerce due to its growing technological advancements with sourcing, ordering, fulfillment, and analytics.
The model can give greater intimacy between manufacturers, sellers, and end-users, whether that is for product changes, demand forecasting, or providing product information. In addition, online stores will only further personalize the procurement experience by organization and user to offer tailored benefits to match individual needs. The positive impact for hospitals and health systems can be significant for such things as engineering products better, reducing backorder issues, just-in-time inventory, and recommending supplies according to your role.
Also, given that many healthcare organizations have historically struggled with budget constraints, cash flow and efficiency will remain top of mind over the next few years, especially with the pandemic. Technology advancements have at its core, a focus on efficiency and enhanced information for cost reduction and improved management.
Today, Amazon Business provides our customers with real-time analytics into spend across PO numbers, invoices, suppliers, account groups, buyers and categories, which can help to provide greater transparency. This enables customers to identify overspend and cost savings opportunities. Amazon Business also conducts product basket analysis for customers to show them where they can save money, for such common spend categories as office supplies, IT, breakroom, MRO, and medical supplies. While I anticipate that the next five years will see more digital innovations, at Amazon, it is always day one and we remain focused on innovating on behalf of our customers each day.
Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.
Photo credit: May 3, 2018 Sunnyvale / CA / USA - Amazon logo on the facade of one of their corporate office buildings located in Silicon Valley, San Francisco bay area / Editorial credit: Sundry Photography / Shutterstock.com
Bill Kopitke, head of healthcare for Amazon Business, formerly worked in private equity and investment at Forward Foundations, as well as at Vizient.
"Whether you work in the healthcare industry or just personally experience it, we can all admit it has opportunities for improvement," Kopitke says.