Amazon and start-up Xealth are planning a pilot where doctors would ‘prescribe’ products to be delivered after patients leave the hospital

July 13, 2018

Amazon is talking with a start-up called Xealth and at least two hospital networks about a pilot project that would let doctors recommend bundles of medical products to their patients before they’re sent home, and have those products delivered to patients’ homes upon discharge, according to several people familiar.

The idea behind the pilot, which is still under review and is slated to start in a matter of months, is to provide patients discounted easy access to the medical supplies and other goods they need via Amazon Prime. Those who do not have a Prime membership or do not want to use Amazon would still be able to access the pilot via other e-commerce providers.

Xealth is managing the effort, according to two people familiar. Amazon has primarily been involved to provide guidance on how to set up the bundles and the reseller accounts, although there have been some discussions about how patients can access discounts via their health insurance or health savings accounts for certain items. The hospitals are Seattle’s Providence Health Systems and University of Pittsburgh Medical Center (UPMC), both of which invested in Xealth.

The people requested anonymity as the conversations are still private. Amazon declined to comment. Providence, UPMC, and Xealth also declined to comment.

The pilot gives some insight into Amazon’s many-faceted strategy as it attempts to tackle various problems in the lucrative healthcare industry. The company has a wide variety of internal projects in the space, and is also talking to innovative start-ups such as Xealth and internet pharmacy PillPack, which it bought in June.

People with chronic ailments and parents of newborns are ideal customers for the e-commerce giant, as they have frequent and often urgent needs for medical and other products, and this pilot offers an opportunity to interact with them before they even leave the hospital.

For the hospitals, it’s a way to differentiate themselves by providing a superior customer experience. It also saves time for providers, as it’s common for patients to call if they lose or forget their discharge instructions.

Here’s how the service might work: A patient who has just undergone a replacement knee surgery might go online to their personal page on the hospital’s portal site to get online care instructions. Under the pilot, they would also see a recommendation of bundles of goods, like bandages, braces, and over-the-counter-meds, which could be shipped to the home that same day via Amazon. All of this could be “prescribed” into a basket of sorts to the patient by a doctor via the hospital’s electronic medical record system.

Other use cases that have been discussed involve new parents, who might benefit from a wide range of products that Amazon sells, including diapers and thermometers. Dermatology is another. Patients might also soon get their prescription medicines delivered through Amazon, if the company moves in that direction after its PillPack buy.

A small number of hospital systems will be involved initially, but the white-labelled service is designed to scale to other health systems across the country.

Xealth, which has raised more than $8 million in funding from venture investors DFJ as well as Providence and UPMC, was developed with a mission “to help healthcare teams to order digital content and services as easily as they do medications,” according to its website. That also includes a growing number of health apps, which are designed to help people manage their medical condition.

The start-up is based in Seattle, along with Providence and Amazon.

CNBC has the story