By KIM BELLARD

It’s Cyber Monday, and you’ve probably been shopping this weekend. In-stores sales on Black Friday rose 2.2% this year, whereas online sakes rose almost 8%, to $9.8b – over half of which was via mobile shopping. Cyber Monday, though, is expected to outpace Black Friday’s online shopping, with an estimated $12b, 5.4% higher than last year. 

Lest we forget, Amazon’s Prime Day is even bigger than either Cyber Monday or Black Friday.  

All that shopping means lots of deliveries, and here’s where I got a surprise: according to a Wall Street Journal analysis, Amazon is now the leading (private) delivery service. The analysis found that Amazon has already shipped some 4.8 billion packages door-to-door, and expects to finish the year with some 5.9bn. UPS is expected to have some 5.3bn, while FedEx is close to 3bn – and – unlike Amazon’s numbers — both include deliveries where the U.S. Postal Service actually does the “last mile delivery.” 

Just a few years ago, WSJ reminds us, the idea that Amazon would deliver the most packages was considered “fantastical” by its competitors. “In all likelihood, the primary deliverers of e-commerce shipments for the foreseeable future will be UPS, the U.S. Postal Service and FedEx,” the then-CEO of Fed Ex said at the time. That quote didn’t age well.

Amazon’s growth is attributed in part to its contractor delivery program, whose 200,000 drivers (usually) wear Amazon uniforms and drive Amazon-branded vehicles, although they don’t actually work for Amazon, and a pandemic-driven doubling of its logistics network. WSJ reports: “Amazon has moved to regionalize its logistics network to reduce how far packages travel across the U.S. in an effort to get products to customers faster and improve profitability.”

It worked.

But I shouldn’t be surprised. Amazon usually gets good at what it tries. Take cloud computing.  Amazon Web Services (AWS) in its early years was considered something of a capital sink, but now not only is by far the market leader, with 32% market share (versus Azure’s 22%) but also generates close to 70% of Amazon’s profits. 

Prime, Amazon’s subscription service, now has some 200 million subscribers worldwide, some 167 million are in the U.S. Seventy-one percent of Amazon shoppers are Prime members, and its fees account for over 50% of all U.S. paid retail membership fees (Costco trails at under 10%). There’s some self-selection involved, but Prime members spend about three times as much on Amazon as nonprime members.

The world’s biggest online retailer. The biggest U.S. delivery service. The world’s biggest cloud computing service. The world’s second largest subscription service (watch out Netflix!).  It’s “only” the fifth largest company in the world by market capitalization, but don’t bet against it. 

I must admit, I’ve been a bit of a skeptic when it comes to Amazon’s interest in healthcare. I first wrote about them almost ten years ago, and over those years Amazon has continued to put its feet further into healthcare’s muddy waters.

For example, it bought online pharmacy Pillpack in 2018. “PillPack’s visionary team has a combination of deep pharmacy experience and a focus on technology,” said Jeff Wilke, Amazon CEO Worldwide Consumer. “PillPack is meaningfully improving its customers’ lives, and we want to help them continue making it easy for people to save time, simplify their lives, and feel healthier. We’re excited to see what we can do together on behalf of customers over time.”

PillPack still exists as an Amazon service, but has broadened into Amazon Pharmacy. PillPack focuses more on people with chronic conditions who like the prepacked pills, while Pharmacy offers home delivery to other customers.  At its introduction, Doug Herrington, Senior Vice President of North American Consumer at Amazon, said: “PillPack has provided exceptional pharmacy service for individuals with chronic health conditions for over six years. Now, we’re expanding our pharmacy offering to Amazon.com, which will help more customers save time, save money, simplify their lives, and feel healthier.”

Amazon Pharmacy has since introduced RxPass, a $5/month subscription service for many common generic drugs, but it still hasn’t cracked the top ten U.S. pharmacies, so there’s work to be done. One pharmacy analyst writes: “Perhaps one day Amazon will be a true disrupter. For now, Amazon is choosing to join the drug channel not fundamentally change it.”

PillPack’s co-founders have recently left.   

Earlier this year, after all the fumbling around with Haven and Amazon Care, Amazon bought One Medical. “We’re on a mission to make it dramatically easier for people to find, choose, afford, and engage with the services, products, and professionals they need to get and stay healthy, and coming together with One Medical is a big step on that journey,” said Neil Lindsay, senior vice president of Amazon Health Services.

Then this month Amazon sought to entice Prime members to join One Medical by offering membership for $9/month, or $99 per year. “When it is easier for people to get the care they need, they engage more in their health, and realize better health outcomes,” said Mr. Lindsay. “That’s why we are bringing One Medical’s exceptional experience to Prime members—it’s health care that makes it dramatically easier to get and stay healthy.”

Of course, One Medical is only in 25 metro markets, with some 200 doctors office, and it doesn’t contract with every insurance plan. Plus, One Medical CEO Amir Dan Rubin is already on his way out of the door. Scaling will not be easy.

Amazon’s success with its healthcare ventures is hard to tell.  HT Tech reports that monthly active users of the One Medical app are up 16% since the acquisition, and that Amazon claims Amazon Pharmacy doubled its active customers from 2022 to 2023. Still, Lisa Phillips, an analyst with Insider Intelligence, scoffed: “It really hasn’t made a big dent. I don’t think anybody is scared of it anymore.”

Maybe. Healthcare is hard, and usually confounds outsiders who aren’t familiar with its byzantine structures. But I look at it this way: Amazon has been delivering its own packages for less than 10 years, and now it is bigger than UPS and FedEx. That’s not nothing. So for the first time I’m starting to think that maybe Amazon can make its mark in healthcare. 

Amazon the biggest healthcare company in ten years?  Don’t bet against it.

Meanwhile, it’s time for Matthew’s tidbits and of course given their recent news-making I am going to focus on Amazon in health care. The news is of course that they are in health care in a big way, buying One Medical. The news is also of course is that they are out–shutting down Amazon Care.

This reminds me of the famous criticism delivered in the British parliament by one MP about another back the last time (in the 1970s) there was a vote about leaving the EU. “The Honourable gentleman can’t make up his mind. First he’s in, then he’s out. In, out. In, out. This is the politics of coitus interruptus.” After a moment a voice from the backbenches shouted “Withdraw.”

So is Amazon in or out?

They are out of their 4 year effort to build a hybrid telehealth-to-home medical group that helps mainstream employers manage their costs. This is despite stating their intent just a few months back to add new clinics and this year adding a decent number of employer clients including Hilton hotels–before that they only really had a few of their own employees as clients. Interestingly enough, it was the development of this platform that convinced Amazon that they didn’t need Haven–their alliance with JP Morgan and Berkshire Hathaway which was developing a similar offering.

They are in to the business of One Medical to the tune of a $3Bn acquisition as well as putting in $300m extra cash so far, and likely a lot more later. Like Amazon Care, One Medical has a hybrid telehealth and clinic approach (though no home visits as yet). When Amazon said they were killing Amazon Care, they suggested that a lack of employer uptake was the biggest problem. One Medical does have employer clients. But these aren’t mainstream low or medium wage employers to whom they are delivering capitated care at a worksite. In One Medical terms that means an employer pays their employees’ $200 per member annual fee, after which the employee can see a One Medical doctor. And curiously enough by far their biggest employer client is Google.

One Medical says that they lower overall costs for their employer clients, but to use another British political line, “they would say that wouldn’t they.” In reality One Medical does very little specialty or hospital care management, and via its relationships with local high-priced health systems is able to charge insurers very high prices for primary care which they seem to actually pay! (And yes I have lots of personal experience here..). Putting aside the fact that One Medical somehow is contriving to still lose loads of money–a big reason why it put itself up for sale–it is not an organization trying to manage costs for employers in value-based care arrangements, unlike say Firefly Health or even Crossover Health (of which Amazon is a big client for its lower paid workers).

You’ll notice that I am conveniently ignoring the Iora Health part of One Medical which they inexplicably bought last year. Iora focuses on capitated services for Medicare Advantage plans, and it is trying to manage costs. Though given the amount it’s losing, that effort isn’t going so well either.

It’s possible that Amazon is going to surprise us and try to turn Iora + One Medical into a capitated giant to work with and steal the margin of the big Medicare Advantage plans. Then later, move that strategy into mainstream employers.

But if they were going to try that it would probably have been easier and more culturally aligned to merge Iora with Amazon Care. My suspicion is that Amazon means what it says and is finding it too hard to manage costs for employers. My guess is it will jettison Iora, keep using Crossover and others to manage costs for its own lower-paid employees, and try to turn One Medical into a Whole Foods-like national brand for the cost- unconscious top 25% of Americans….and somehow make it profitable.

If they manage that it would be great for Amazon’s business. But it would be very disappointing for those of us hoping that Amazon was going to have a serious go at providing a low-cost, innovative service that was trying to lower overall health care costs for employers and make a serious dent in the market power of America’s high priced, under-delivering hospital systems.

-Matthew Holt

“Next-gen” healthcare might just be getting its start in primary care. So says Crossover Health’s CEO, Scott Shreeve, who laughingly channels Justin Timberlake and says he’s “bringing sexy back” to it too. With Walmart launching its own Healthcare Super Centers, Walgreens partnering with VillageMD in a $1-billion-dollar three-year deal, and some soaring post-IPO stock prices for OneMedical and Oak Street Health — it appears he’s onto something. And, hopefully, it’s something big that’s borne from Crossover’s recent partnership deal with Amazon. Will this be the tech giant’s next foray into healthcare? We’ve got the analysis on Amazon, Scott’s insider insights on what’s next for the primary care market, AND some phenomenal perspective on the “rise of the ‘Health Activist Employer’” as healthcare’s “most innovative payer.”

By DEBORAH A. COHEN

Physical inactivity is a mounting challenge for America. In reviewing the 2013-2015 American time use survey, we found that most Americans report spending their daily leisure time watching screens, and devote only a small fraction of leisure time—24 minutes for men and 14 minutes for women—to physical activity. A recent longitudinal examination of the National Health and Nutrition Examination Survey showed that sitting time increased by an hour a day between 2007 and 2016, with the largest increases among adolescents ages 12-19 and adults, 20 years and older. As mortality rates for heart disease have begun to climb, increases in sedentary behavior bodes poorly for future control of disease and health care costs.

The explosion in streaming apps and content is likely contributing to the increased sitting time. According to the Motion Picture Association of America, TV and movie views have more then doubled between 2014 and 2018. The availability of multiple series and the ability to binge watch can keep people glued to their couches for hours at a time. The immersive quality of the programming makes it increasingly difficult for viewers to pull themselves away from their screens. Yet, the technology could provide options to help viewers watch and still get regular physical activity.

Currently, after each episode, an option is available to allow the viewer to immediately call up the next episode. Why not consider adding a pop-up that can remind viewers that sitting more than 20-30 minutes at a time may not be good for health, and that it’s important to move around to avoid chronic diseases? A narrator could ask viewers to treat themselves to an activity break. Then the viewers could have the option to choose a short video that can guide them through a 10- minute exercise break. Or even a 5-minute break. Something is better than nothing.

There could be many options, from a just a simple stand up and stretch, like the 7^th inning break at a baseball game, to vigorous workouts, like the 7-minute workout published by the American College of Sports Medicine or doing a Bhangra dance with a Bollywood film star. 

Prolonged sedentary behavior is an independent risk factor for a variety of metabolic diseases. Moving one’s muscles prevents them from wasting, and also helps support many metabolic functions in the body, from controlling blood sugar, preventing diabetes, reducing inflammation and lowering the risk of heart disease. Physical activity has been shown to ease depression and elevate mood. It’s a critical component of every weight control program as well. 

Without a pop-up reminder or mechanism to easily pull up an exercise video, it’s unlikely that many people will interrupt their view time for physical activity on their own. Engaging in physical activity is always a challenge, because people are generally wired to conserve energy. Providing gentle nudges and increasing convenience could be warranted in this era of growing chronic diseases that are largely a consequence of an environment that has removed the need for physical labor and active transport in people’s daily lives.

Screen time among Americans averages three hours per day. If people took three 10-minute exercise breaks a day, they could easily meet the national physical activity guidelines. Imagine that Amazon, Netflix, CBS and Hulu and newcomers to streaming services like Apple, Disney and NBCUniversal could be a part of the solution to America’s growing physical inactivity crisis.

Who will be first to add this exercise option? Which streaming services might vie to take an action meant to demonstrate that they care more about the health and well-being of their viewers? 

Deborah Cohen is a senior physician policy researcher at the RAND Corporation, and the author of A Big Fat Crisis: The Hidden Influences Behind the Obesity Epidemic — and How We Can End It.