[{"innerBlocks":[],"name":"core\/freeform","postId":2467,"blockType":{"name":"core\/freeform","keywords":[],"attributes":{"content":{"type":"string","source":"raw"},"lock":{"type":"object"}},"providesContext":[],"usesContext":[],"selectors":[],"supports":{"className":false,"customClassName":false,"reusable":false},"styles":[],"variations":[],"apiVersion":3,"title":"Classic","description":"Use the classic WordPress editor.","category":"text"},"originalContent":"(Bloomberg)\u2014Amazon.com may have big ambitions to shake up healthcare, but it appears to be starting small.

The Internet giant is angling to become the go-to source for basic medical supplies such as latex gloves, bandages and sutures. While that\u2019s not the sort of splashy entrance into the U.S. health sector that some investors have braced for, it could be a sounder route for Amazon to set itself up as a long-term player.

Amazon is focusing on ambulatory sites, which include everything from doctors\u2019 offices to outpatient surgery centers, said a supply chain executive at a top hospital system who has had multiple conversations with Amazon executives during the past several months. The official requested anonymity because the conversations with Amazon were confidential.

Big hospital systems have been rapidly buying up medical practices as they move into the burgeoning outpatient care market. But their distribution systems, which are designed to serve centralized hospitals, haven\u2019t always kept up.

Amazon\u2019s user interface would be an easy sell in an underserved market, the hospital supply executive said.

If Amazon can make restocking the supply cupboard simpler with friendly technology and speedy shipping, it could establish a dominant presence in an important niche\u2014and gain an understanding of the health business that could eventually enable it to move up to selling and shipping pricier drugs and high-tech medical devices.

By starting out with basic items that aren\u2019t highly regulated and don\u2019t need special handling, Amazon could gain a foothold in the medical supply chain while keeping an eye toward expanding into higher-value, more regulated items, according to Cathy Roberson, founder of logistics market research firm Logistics Trends & Insights in Roswell, Ga.

\u201cThey are inching their way in,\u201d says Roberson. \u201cThis is a learning experience for them.\u201d

Amazon\u2019s foray could particularly threaten businesses such as Henry Schein that move basic supplies to doctors, veterinarians and dentists. Other companies that distribute medical supplies include Owens & Minor, and giant drug distributors McKesson and Cardinal Health.

Paul Cody Phipps, chief executive officer of Owens & Minor, said on a conference call Wednesday that \u201cit\u2019s very well known\u201d that Amazon was talking to many large hospital systems, \u201cincluding our customers.\u201d

To date, Amazon has mostly gained traction dealing directly with patients and with smaller physician offices, not the bigger hospital chains that Owens & Minor serves. Still, \u201cthey are a force to be reckoned with,\u201d said Phipps.

Amazon Business was set up to tap into the $1 trillion corporate spending market by offering tractor parts, paper clips and millions of other products for factories, schools and offices. The medical market is especially attractive. Ownership of hospitals and doctor\u2019s offices is highly fragmented, but the businesses need many of the same types of supplies; Amazon says that it can pool their buying power and share the savings while cutting out middlemen.

Phyllis McCready, chief procurement officer for Northwell Health, said the New York health system has been meeting with Amazon for about a year. Amazon is working on a technology tool for the industry, said McCready, who couldn\u2019t give details because of an agreement with the company.

\u201cThe front-end of Amazon is very appealing. So I would think things like that would be appealing and an improvement over what we\u2019d do today,\" she said. But Amazon still must convince the health system that the cost of switching is worthwhile.

Deborah Templeton, chief of system support services at Geisinger Health System in Pennsylvania, says the system uses Amazon now on a limited basis for office supplies. Entering the medical supply arena would mean Amazon will have to have to offer standardized vendors so nurses know they are getting exactly the same version of a product each time they order something, she says.

One big change in an Amazon-style system would be pricing: Most medical supplies are purchased on a contract basis, at a price that doesn\u2019t change often. Going to an on-demand price would require hospitals to adapt their ordering procedures, Templeton said.

Still, Amazon could be particularly helpful if it designed an app that enabled Geisinger patients to order supplies before or after an operation or other procedure and have them delivered to their home. Geisinger said it\u2019s not involved in the talks with Amazon, but \u201cwe are watching how they potentially develop,\u201d she said.","saveContent":"(Bloomberg)\u2014Amazon.com may have big ambitions to shake up healthcare, but it appears to be starting small.

The Internet giant is angling to become the go-to source for basic medical supplies such as latex gloves, bandages and sutures. While that\u2019s not the sort of splashy entrance into the U.S. health sector that some investors have braced for, it could be a sounder route for Amazon to set itself up as a long-term player.

Amazon is focusing on ambulatory sites, which include everything from doctors\u2019 offices to outpatient surgery centers, said a supply chain executive at a top hospital system who has had multiple conversations with Amazon executives during the past several months. The official requested anonymity because the conversations with Amazon were confidential.

Big hospital systems have been rapidly buying up medical practices as they move into the burgeoning outpatient care market. But their distribution systems, which are designed to serve centralized hospitals, haven\u2019t always kept up.

Amazon\u2019s user interface would be an easy sell in an underserved market, the hospital supply executive said.

If Amazon can make restocking the supply cupboard simpler with friendly technology and speedy shipping, it could establish a dominant presence in an important niche\u2014and gain an understanding of the health business that could eventually enable it to move up to selling and shipping pricier drugs and high-tech medical devices.

By starting out with basic items that aren\u2019t highly regulated and don\u2019t need special handling, Amazon could gain a foothold in the medical supply chain while keeping an eye toward expanding into higher-value, more regulated items, according to Cathy Roberson, founder of logistics market research firm Logistics Trends & Insights in Roswell, Ga.

\u201cThey are inching their way in,\u201d says Roberson. \u201cThis is a learning experience for them.\u201d

Amazon\u2019s foray could particularly threaten businesses such as Henry Schein that move basic supplies to doctors, veterinarians and dentists. Other companies that distribute medical supplies include Owens & Minor, and giant drug distributors McKesson and Cardinal Health.

Paul Cody Phipps, chief executive officer of Owens & Minor, said on a conference call Wednesday that \u201cit\u2019s very well known\u201d that Amazon was talking to many large hospital systems, \u201cincluding our customers.\u201d

To date, Amazon has mostly gained traction dealing directly with patients and with smaller physician offices, not the bigger hospital chains that Owens & Minor serves. Still, \u201cthey are a force to be reckoned with,\u201d said Phipps.

Amazon Business was set up to tap into the $1 trillion corporate spending market by offering tractor parts, paper clips and millions of other products for factories, schools and offices. The medical market is especially attractive. Ownership of hospitals and doctor\u2019s offices is highly fragmented, but the businesses need many of the same types of supplies; Amazon says that it can pool their buying power and share the savings while cutting out middlemen.

Phyllis McCready, chief procurement officer for Northwell Health, said the New York health system has been meeting with Amazon for about a year. Amazon is working on a technology tool for the industry, said McCready, who couldn\u2019t give details because of an agreement with the company.

\u201cThe front-end of Amazon is very appealing. So I would think things like that would be appealing and an improvement over what we\u2019d do today,\" she said. But Amazon still must convince the health system that the cost of switching is worthwhile.

Deborah Templeton, chief of system support services at Geisinger Health System in Pennsylvania, says the system uses Amazon now on a limited basis for office supplies. Entering the medical supply arena would mean Amazon will have to have to offer standardized vendors so nurses know they are getting exactly the same version of a product each time they order something, she says.

One big change in an Amazon-style system would be pricing: Most medical supplies are purchased on a contract basis, at a price that doesn\u2019t change often. Going to an on-demand price would require hospitals to adapt their ordering procedures, Templeton said.

Still, Amazon could be particularly helpful if it designed an app that enabled Geisinger patients to order supplies before or after an operation or other procedure and have them delivered to their home. Geisinger said it\u2019s not involved in the talks with Amazon, but \u201cwe are watching how they potentially develop,\u201d she said.","order":0,"get_parent":{},"attributes":[],"attributesType":{"content":{"type":"string","source":"raw"},"lock":{"type":"object"}},"dynamicContent":""}]

Amazon bets on Band-Aids as health industry braces for shakeup

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