Amazon Going Deeper into Healthcare via Accepting Pre-tax Spending Accounts
Amazon was in the news recently as they now accept FSA and HSA accounts. This ties into their acquisition of the online pharmacy PillPack last summer and serves as a warning shot to Walgreens and Walmart that they’re targeting consumers of over-the-counter medical items such as diabetes care accessories, prenatal vitamins, glucose monitors, cough drops and nasal sprays, and so on.
According to the article, it could also signal Amazon’s desire to zero in on those consumers who have high-deductible plans and prefer to pay cash for prescriptions. Reportedly, this represents about 6 percent of the U.S. population, creating a big incentive for Amazon.
Strategizing on how to best court their Amazon Prime customers with knowledge gleaned from their data warehouse of billions of transactions and search queries is also likely under consideration. Knowing what consumers searched for and didn’t buy is almost as useful as knowing what they actually purchased. It allows the company to determine if there’s an opportunity to fill a product gap with perhaps a private label version.
Just to put this news into perspective, Walmart has accepted FSA debit cards since 2007 and is still ahead of Amazon in Health and Personal Care sales, although Amazon is gaining market share.
From a healthcare industry viewpoint, Amazon’s entry into the FSA and HSA market may prove beneficial. It’s well known that consumers are not maximizing their health savings account or flexible spending arrangement today. Even though these plans have been around for 15 years, most tend to underfund the account out of ‘use-it-or-lose-it’ fear and don’t use the funds as productively as they could. Amazon and Walmart will assist in this much-needed consumer education.