Amazon is reportedly looking to expand its medical supplies business, focusing on ambulatory sites such as outpatient surgery centers, according to Bloomberg. Here are six things you need to know:
1. Amazon's interest in outpatient clinics, including doctors' offices and ASCs, was revealed to Bloomberg by a supply chain executive at a top hospital system that has been involved in talks with Amazon officials in recent months. The executive spoke on the condition of anonymity.
2. Great Neck, N.Y.-based Northwell Health has been in talks with Amazon for about a year, according to Chief Procurement Officer Phyllis McCready. The health system's portfolio includes 10 ambulatory surgery joint ventures.
3. Amazon's market entrance could hurt medical supply and drug distributors such as Owens & Minor, McKesson Corp. and Cardinal Health. Shares of these three companies dropped earlier this week, CNBC reported.
4. Initially sticking to basic medical supplies such as latex gloves, bandages and sutures could benefit the online retailer's entrance into the medical supply chain, according to Logistics Trends & Insights founder Cathy Roberson.
5. Amazon provides office supplies to Danville, Pa.-based Geisinger Health System on a limited basis. Geisinger's chief of system support services, Deborah Templeton, said Amazon's market entrance strategy will need to include the standardization of vendors.
6. On demand pricing for medical supplies would likely cause a shift in facilities' ordering procedures, as most medical supplies are currently bought on a contract basis at relatively stable prices, Templeton said.