Would you buy medical supplies from Amazon.com? Most administrators would

By John Murphy, MDLinx
Published May 24, 2018

Key Takeaways

Amazon.com is now selling medical supplies and equipment to hospitals, clinics, and private practices—and 62% of hospital officers and administrators support the online retailer’s plan to do so, according to a recent survey from Reaction Data, a health-care research and consulting firm.

The survey included responses from 152 participants, such as CEOs, material management directors, operations directors, and finance directors. Of these, 59% had heard the news of Amazon’s entry into the health-care marketplace.

If you haven’t heard, Amazon has been building its medical supply business by selling “tens of thousands of professional-only health-care products” like sutures, syringes, and point-of-care tests with “business-only” pricing and quantity discounts, as its website touts.

“Amazon is seeking to disrupt the traditional health-care supply chain by selling everything from bandages to hip replacements to syringes,” the survey authors wrote. “They plan to expand their B2B marketplace to allow hospitals and clinics to shop for supplies they need to stock various departments and locations.”

The online retailer’s medical supply business appears to offer the same advantages as its consumer site, including lower costs, simplified purchasing, and no middle man. As Amazon Prime does for consumers, businesses that pay an annual fee to join Business Prime get unlimited, free 2-day shipping.

“Some skeptics feel that GPOs [group purchasing organizations] could be an obstacle to the online storefront’s success, while others are hoping it will disrupt the existing negotiation process,” the survey authors noted.

Seventy-five percent of respondents expect that Amazon’s new venture will be a success. Only 11% think it will tank. “Interesting how non-medical folks think they know better than the experts,” one CEO responded. “I feel Amazon needs to focus on food and goods and leave the medical supplies alone.”

The majority of respondents—61%—think that Amazon will have a positive effect on the medical supply market, while 10% foresee a negative impact. But even those who are optimistic cautioned that Amazon must provide on-time delivery and affordable prices to make this venture a success.

Half of respondents (49%) believe that Amazon should focus on selling only commodity items, the survey found. But the other half suggested all kinds of supplies and equipment should be available, including surgical supplies (9%), intravenous equipment (8%), catheters (4%), diabetic supplies (1%), orthopedic equipment (1%), or just “everything” (5%). Pharmaceuticals were the third most-suggested item, but as of mid-April 2018 Amazon had shelved its plans to enter the prescription drug market.

“GPOs have dominated the supply chain for a long time,” the Reaction Data authors wrote. “However, if Amazon is able to make a splash in commodities, which they already excel at, the market appears to be Prime for more.”

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