Q&A: Amazon Business on supply management in healthcare

Medical supply expenses comprise approximately 10.5% of an average hospital’s budget, collectively accounting for $146.9 billion in 2023, a $6.6 billion increase from 2022, according to the American Hospital Association. 

Bill Kopitke, head of healthcare at Amazon Business, sat down with MobiHealthNews to discuss the retail and tech giant’s B2B healthcare model and how it is working to ease supply management among care providers. 

MobiHealthNews: Can you give examples of how Amazon Business works with healthcare providers?

Bill Kopitke: If you think about a lot of the storefront experience that you have as a consumer, we have a whole portal that is just for business organizations, and this has exploded in growth. It’s like six million customers that we grew to, as we reported at the beginning of last year. So, we reached 35 billion in seven years, which is like profound growth. That encompasses all types of providers–hospitals, health systems, physicians, vets, and specialty care like chiropractors, podiatrists, long-term care, senior living, and behavioral health.

So, we really take that beginning organic interest to go find something…and you can quickly compare transparent prices that are available. And then we really give the company or the corporation a means to better structure that through groups and through analytics on the backend.

There are some other things that we’re doing on the backend by way of benefits that really, I would say, are much more advanced – like taking over whole categories of spend. It would kind of surprise a lot of people to realize that we started out helping with a lot of odds and ends and what to buy. Now, we’re moving over full categories of office supply and IT or what’s referred to as MRO [mainteance, repair and operations], like maintenance equipment, and then we’re making significant progress within the medical supply space.

MHN: Many times, when people purchase something on Amazon, the consumer, it can be questionable whether what they’re buying is a valid product. How does Amazon ensure that everything it sells is a solid healthcare product?

Kopitke: It can be very misconstrued that it’s like the Wild West, that people can just go on and find whatever they need, like some sort of experimental medical supply. It is not that experience. I think, first of all, when organizations launch with us, they are communicating out to hundreds or thousands of employees that say we are endorsing Amazon Business, and this is all integrated through their ERP [enterprise resource planning] systems. It’s very formalized.

There’s confidence in organizations across all industries, and it literally is every day that we’re having these organizations go out and realize that we’ve been building supply and catalog offerings specific to those industries.

So, in addition, we provide an implementation team that comes in free of charge to where we are working with them to know what they want to highlight that people can buy, what they want to warn people not to buy, or what they want to block people from buying. And then, if you’re talking about any sort of restricted medical product, you know, Class I, II, and III are all things that we offer today. We have a high vetting process. So it is not willy nilly for what makes our stores for people to consider.

One of the biggest things happening this year is the very established brands and medical manufacturers that people know, we’ve offered their medical supplies. We sold during the pandemic to over 100,000 organizations in one year because they couldn’t find what they need, and we were faster to source and pull it to market. So, that was really a watershed moment for people to realize it’s okay to be buying medical supplies. And now we’re getting a lot of the established brands on there that people have always known.

MHN: What’s in store for Amazon Business moving forward?

Kopitke: We are targeting spend segments, and we’re moving those over to Amazon Business because lowering cost, it’s more operationally efficient, it’s more flexible. So whether that’s very basic business commodity categories, like office supply, or, as I had mentioned, specific subcategories of medical where people are seeing opportunities.

Then we also offer forecast and planning by way of data and analytics, so think about cloud utilization and how to benefit from data that is there through our AWS partners.

We’re also extending to the community and directly to patients. So, a bigger thing we’re coming out with of late is we’re helping organizations ship directly. So, for example, if you have a website that’s out there and you’re offering over-the-counter supplies, all of that back end can be fulfilled by Amazon.

So you get the Amazon-like experience to ship to the home, help with customer service, that sort of thing, but the front website is the organization’s look. And so we really want to see, especially in the future, clinicians touching less supply. We want to see less supply in warehouses. We just want to really simplify the whole model in getting the medical supplies and other needed supplies to patients faster.