It may only be a matter of time before Amazon.com’s (Nasdaq: AMZN) business purchasing platform makes more of a mark in senior living, if the experience of a major regional senior care provider in the Pacific Northwest is any indication.
The Seattle-based online retail giant touted Amazon Business at the 2018 Argentum Senior Living Executive Conference in San Diego last month, pitching the purchasing platform as a useful, modern-day solution for senior living providers of all sizes.
Essentially, for health care providers, Amazon is “trying to take that work purchasing experience and ‘Amazon’ it,” Chris Holt, leader of global healthcare at Amazon, recently told Senior Housing News.
In general, the processes and systems that many health care organizations, including senior living companies, use to make purchases are “outdated” and “unsophisticated,” Holt said.
“You might be shopping out of a physical catalog, calling few suppliers, visiting local retail stores, trying to meet things like diversity supplier goals,” he explained. “You sort of have to manually, on the back of an envelope, keep track of who those suppliers are.”
Now, providers like the Avamere Family of Companies are utilizing Amazon Business to both streamline and add visibility to their purchasing decisions, and Amazon is teasing that there will soon be more from the company for senior housing providers to look forward to.
Embraced by Avamere
The Wilsonville, Oregon-based Avamere Family of Companies has been in business for over 20 years, and it currently owns, manages or operates more than 50 senior housing assets. As of December 2017, all of Avamere’s senior housing communities had begun using Amazon Business in some capacity, Kelsey Margheim, purchasing manager at Avamere Health Services, told SHN.
Despite the roll out, Avamere is reluctant to abandon all of its prior purchasing habits and rely exclusively on Amazon Business’ platform.
“We are part of group purchasing organizations [GPOs]—we receive discount pricing through them and we receive rebates,” Margheim explained. “We have Amazon set up as a secondary vendor to be utilized when items can’t be procured from our preferred vendors.”
Avamere initially decided to give Amazon Business a try after the company approached Margheim late last year. Many Avamere senior living communities had already been purchasing products through Amazon’s website, Margheim noted.
“To be honest, I think a lot of our executive directors were using their personal [Amazon] accounts prior to setting up Amazon Business,” she said. “Amazon Business gave us more visibility into spend that was already occurring with Amazon.”
Individual Avamere senior living communities are not permitted to purchase certain items, such as medical supplies and food, through the Amazon Business platform, as the provider prefers to purchase these products through its key vendors. Most of the purchasing Avamere does through Amazon Business is for its IT department, Margheim said.
The top four items that Avamere IT purchases through Amazon Business are iPad cases, monitors, docking stations and hard drives, she added.
Additionally, Avamere communities tend to use Amazon Business primarily to purchase one-off items for activities and events, like a luau party or a Nurses’ Week celebration.
So far, the Amazon Business rollout has gone smoothly for Avamere employees.
“Everybody has a personal Amazon account—there’s not one person I can think of who doesn’t have one,” she said. “We’ve had little to no pushback or questions from the home office perspective.”
More to come from Amazon
Amazon Business is far from Amazon’s first venture into senior care—and it very likely won’t be the last.
The company is in the midst of a large-scale push into the health care realm, including establishing a new, independent, health insurance-related company with JPMorgan Chase & Co. (NYSE: JPM) and Berkshire Hathaway (NYSE: BRK.A, BRK.B). Other initiatives are more specifically focused on older adults.
In November 2017, senior living innovator Bill Thomas told SHN that he and his Minka collaborators were collaborating with Amazon to create an Alexa skill set specifically meant to be used in Thomas’ Minka houses. Amazon also reportedly received a crash course in aging during a multi-city bus tour that involved input from Thomas.
Senior housing providers should hold tight for future Amazon announcements related to senior housing in the coming months, Chris Buker, senior business development leader for Amazon Smart Home Services, told SHN last month.
Written by Mary Kate Nelson