Amazon is seeking to disrupt the traditional healthcare supply chain by selling everything from bandages to hip replacements to medications. They plan to expand their B2B marketplace to allow hospitals and clinics to shop for supplies they need to stock various departments and locations. It would extend the advantages of their consumer site to hospital systems, including lower costs, simplified purchasing, and getting rid of middle men.
A natural starting point would be to work with the many satellite facilities owned by hospital systems. In fact, Amazon has already met with major hospital executives and even rolled-out a program with a large hospital system to stock dozens of outpatient facilities with a customized catalog of supplies.
Amazon’s model would follow a marketplace concept rather than traditional contract negotiations hospitals and clinics currently have with distributors and manufacturers. There are concerns,
though, that the products may not be up to the same specifications and Amazon won’t be able to keep the supply consistent with the direct contract model that most provider organizations currently use. Simply put, hospitals don’t have the luxury of running out of stock, which is why they typically contract directly with distributors and manufacturers.
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