While concerns about Amazon.com have weighed on medical distributors like Cardinal Health, companies streamlining medical records data such as UnitedHealth Group may not face such a threat.
Amazon plans to mine patient data to bolster medical supply sales via its online pharmacy and to help find patients for clinical trials, according to a report in the Wall Street Journal. Yet shares of UnitedHealth Group, which highlighted its machine learning platform platform at an investor day Tuesday, are trading near a record high.
The electronic medical record industry has gone through a huge growth spurt driven by government mandates and incentives. The focus has been on getting data from disparate sources into a more useful application, Cantor Fitzgerald analyst Steven Halper said via phone. What Amazon is doing “validates the market opportunity” in an area where UnitedHealth has already been working.
The online retailer is working on the back-end where UnitedHealth is already years ahead, he said. Companies with EHR legacy products, such as UnitedHealth and Cerner Corp., may have a competitive edge and the “logical conclusion” is that partnering may make more sense than competing.
Leerink analyst Ana Gupte agrees. “Amazon has a tough hill to climb to disrupt medical record analytics” she wrote in a note to clients, saying the tech company would have a hard time catching up to UnitedHealth’s artificial intelligence and machine learning.
Earlier this month the Wall Street Journal reported that Apple was talking to the Department of Veterans Affairs about electronic health records for military veterans.
Morgan Stanley’s Ricky Goldwasser is a little more pessimistic, at least for drug distributors. She says Amazon Web Services could become a “Trojan horse” for growing the supplies business as hospitals outsource storage. “Who is better positioned to transform the healthcare market, entrenched healthcare companies or tech giants? We think both have a role,” she wrote in a note.