Amazon is on the way to expand its business-to-business marketplace and is set to better serve US hospitals and outpatient clinics with medical supplies, according to the reports from the Wall Street Journal.
Amazon, the e-commerce giant has reached out to different hospital executives to discuss turning its marketplace from a business having a limited selection of medical supplies to a major supplier of the products, including more and more specialized items such as hip implants.
What is the cause of importance of it?
Amazon’s presence in the medical supply business can drive down costs alongside driving out some competitors. Hospital purchasing is no doubt typically structured around contracts between the hospital systems, distributors, and the manufacturers. These all transactions often come along with the additional costs, which can significantly increase the price of supplies — fees & administration, marketing, alongside the shipping costs account for 20 percent to 30 percent of healthcare supply costs, according to an estimate taken by Citigroup Global Markets Inc. Providing hospital systems with a direct access to the multiple manufacturers and an easy way to compare their prices would obviously lead to more competitive pricing on medical supplies.
All this will not only be reducing the direct cost of the supplies, but it will also cut out the other fees, such as those paid to middlemen who had been facilitating medical supply transactions.
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How will all this impact the healthcare industry?
Amazon does appear to be building out a full healthcare ecosystem, which would be making it the biggest digital threat to the $3 trillion the US healthcare industry. In the last year alone, the firm has been successful for introducing HIPAA-compliant cloud features, entered into cloud partnership along with the health tech giant Cerna, that did launch a challenge to the third-party companies to get developed Alexa skills to help patients with diabetes manage their condition, and in January this year, it managed to announce the creation of a healthcare company with JPMorgan Chase & Berkshire Hathaway.
Amazon.com, is an Inc. that is doing business as Amazon. It is an American electronic commerce & cloud computing company that is based in Seattle, Washington which was founded by Jeff Bezos on July 5, in 1994.
In case Amazon continues to this very trajectory, it will obviously become a one-stop shop for providers and the patients.