Medical supplies costs make up about 10.5% of the average hospital’s budget and will total $146.9 billion in 2023, up $6.6 billion from 2022. American Hospital Association.
Bill Kopytke, head of healthcare at Amazon Business, said: MobiHealthNews We discuss the retail and tech giant’s B2B healthcare model and how it’s working to make supply management easier among care providers.
MobiHealth News: Can you provide an example of how Amazon Business works with healthcare providers?
Bill Kopytke: If you think about a lot of the in-store experience as a consumer, we have a portal that’s just for business organizations, and that’s grown explosively. As we reported early last year, we hit 6 million customers. That means we’ve hit 35 billion in seven years. That’s a lot of growth. That includes all types of providers, including hospitals, health systems, doctors, veterinarians, chiropractors, podiatrists, long-term care, senior housing, behavioral health and other specialties.
So we really take that initial natural interest of finding something and making it possible to quickly compare transparent prices available, and then we give businesses and legal entities the means to structure it better through groups and back-end analytics.
Other things we do on the benefits side are much more advanced, like taking over entire spend categories. A lot of people would be surprised to know that we started off by helping with miscellaneous things and what to buy. Now we do the entire category of office supplies and IT, MRO, so to speak. [mainteance, repair and operations]We have also made great strides in areas such as maintenance equipment, and we have also made great strides in the medical supplies field.
personal information: Often when consumers buy something on Amazon, they may wonder if what they are buying is a valid product. How does Amazon ensure that all the products they sell are trustworthy healthcare products?
Kopitoke: There’s this misconception that it’s like the Wild West, where you can easily find anything you need, like experimental medical supplies, but that’s not the case. First, when an organization partners with us, they tell hundreds or thousands of employees that we recommend Amazon Business, and then it’s all integrated through our ERP. [enterprise resource planning] It’s a system. It’s very formalized.
Organizations across all industries rely on us and literally every day these organizations recognize that we have built supply and catalog offerings specific to their industries.
So, in addition, we provide an implementation team that will come to them at no cost and work with them to figure out what they want to highlight that people can buy, what they want to warn people not to buy, what they want people not to be able to buy. And when it comes to any kind of restricted medical products, Class I, II, III are all things that we offer right now. We have a rigorous vetting process. So we’re not indiscriminate when it comes to what people consider for our store.
One of the biggest things that happened this year was that we provided medical supplies to established brands and medical equipment manufacturers that you know well. We sold to over 100,000 organizations in a year to organizations that couldn’t find what they needed during the pandemic, but we sourced and got to market faster. So this was really a groundbreaking moment for people to realize that it’s okay to buy medical supplies. And now we have a lot of established brands that people have known forever.
personal information: What does the future hold for Amazon Business?
Kopitoke: We’re targeting spend segments that we’re moving to Amazon Business to reduce costs, increase operational efficiencies, and increase flexibility — whether that’s a very basic business goods category like office supplies, or, as I mentioned, certain subcategories of healthcare where people are seeing opportunity.
Additionally, we provide forecasting and planning with data and analytics, so think about your cloud usage and how you can benefit from the data provided through AWS partners.
We also reach out directly to communities and patients. A big initiative we’ve been working on lately is helping organizations enable direct shipping. For example, if you have a website and you’re selling over-the-counter medications, the backend of that can all be handled by Amazon.
So you get an Amazon-like experience with home delivery and customer service support, but the front website is the look of your organization. So, especially in the future, we want to see clinicians have less exposure to supplies. We want to see less supplies in warehouses. We really want to simplify the whole model to get medical supplies and other needed supplies to patients faster.
