Amazon Rising

Too many professionals in the healthcare supply chain industry fret about Amazon entering and thriving in the healthcare industry.

They should. I apply the previous two-word sentence to both groups mentioned in the lead sentence. Call it a double entendre.

Amazon should jump in and succeed; everyone else swimming in the giant process pool between the buyers and sellers of products and services should be concerned. That’s called competition and free enterprise. It’s business. And let’s face it: We’re in the business of delivering high-quality healthcare. Consumers (read: patients) expect, demand high-quality healthcare; it’s up to clinicians and administrators in the provider, supplier and payer communities to figure out how to pay for it all and remain comfortably operational.

Indeed, Amazon might drive distributors, dot-coms (online exchanges), GPOs, third-party logistics companies (3PLs) and consulting/service companies out of business because that sea between the shores of the buyers and sellers seems heavily stocked with fish. Amazon might even obviate the need for supply chain departments as we know them, particularly if everyone can make their own cost-effective and cost-efficient purchases online.

Realistically, that scenario is doubtful.

Since the late 1980s, a variety of disruptive concepts, ranging from healthcare reform implementations to mergers and acquisitions to integrated delivery networks, dot-coms and supply data standards, were supposed to thin of the herd of middlemen between buyers and sellers.

And yet, here we are experiencing the perceived benefits and liabilities of a well-stocked system of economic transactions.

Forget Chicken Little. The healthcare industry should be emulating supersuit designer Edna in the 2004 Disney/Pixar film, “The Incredibles,” when she declares to Bob “Mr. Incredible” Parr: “I never look back, darling! It distracts from the now.”

Healthcare’s proper answer to Amazon: “Bring it on.”

Why? Looking back on 40 years shows so many improvement opportunities smothered by seemingly endless debate and discussion. From the debut of bar coding in healthcare in the mid-1970s to the Common Category Database in the late 1980s to the Monarch UPN initiative in the late 1990s to electronic health/medical records, GS1 and he UDI within the last 10 to 15 years. We could have been so far along by now instead of so far behind.

Apparently, nothing short of government edict/fiat or regulation will force us to become more efficient and improve. After all, federal authorities legally forced us all to switch to digital television sets and to pay for content! Instead of debating it and protesting, we embraced it and now aim to satisfy our content appetites by feasting on Internet access for radio and television programs, live-streaming video and even printed media – easily and readily accessible for convenient consumption.

Like that old more declares: “It’s never too late to be what you might have been.”

Perhaps Amazon can give the healthcare supply chain industry the swift kick it needs to make some progress.

In New York City, Amazon is testing a food store with no cashiers, checkout lines or visible inventory managers. How does it work? You walk through the turnstyle, carrying your Amazon-chipped bag, which is scanned, and your Amazon account is accessed. You pull products off the shelves and place them in your bag. Sensors in the shelves notify the storeroom to replenish stock and sends alerts back through the supply channel. Meanwhile, your Amazon-chipped bag records the selection (even deletes it if you return the item to the shelf) and when you walk back through the turnstyle to exit your Amazon account is charged. Linking this to your bank account closes the transaction loop.

Usage data is recorded; replenishment orders are made; theft seemingly is thwarted.

Healthcare facilities easily could affix sensors to shelves and doorways to do the same thing. Such technology has been available for years. Want case studies showcasing success? Call Amazon. Of course, there’s no word on what happens if someone purposefully misplaces product or leaves unwanted product on the floor just to mess with the system. Still, Amazon is doing it, not merely talking about it.

Amazon makes it relatively comfortable and easy to order products and receive deliveries through 3PL services, too. Who wouldn’t want that from their MMIS/ERP or distributor?

Some might say Amazon doesn’t have the clinical expertise to facilitate product, service and technology discussions with doctors and nurses. With the resources of Berkshire Hathaway and Chase behind it, such expertise can be bought through acquisition and/or recruitment.

Instead of expending energy and resources devising ways to defend against Amazon’s perceived encroachment, perhaps the healthcare industry – and patients – would be better served by letting Amazon do the heavy lifting as the first mover and follow their lead?