Healthcare Technology Featured Article

February 12, 2018

Will Amazon Save Healthcare in the U.S.?

Directly or Indirectly, They are Poised to Change Healthcare in the U.S.

Late last month, Amazon, Berkshire Hathaway, JPMorgan teamed up with an announcement that was interesting to say the least. These three leaders in the corporate world announced they are joining forces to create an independent healthcare company specifically for their employees.  

One thing all three of these corporate global powerhouses have in common is that they have relatively zero experience in the healthcare sector, leading some to question how they plan on creating a healthcare company. But with vast resources available to them and serious goals for disrupting the healthcare industry, we are left wondering if these three companies may just in fact have what it takes to save healthcare in the United States.

The Lead Up

Back in October of 2017, Amazon sent the healthcare industry into a frenzy upon rumors swirling that the company was entering the pharmaceutical industry. This is when Amazon acquired wholesale pharmacy licenses in at least a dozen states. While this doesn’t necessarily mean the company is going to move into this business -- they could just be working to sell medical devices -- but former Amazon consultants report the company is certainly interested in the $560 Billion prescription drug business.  

Amazon Has a Knack for Solving Their Own Problems

Many experts are looking back at how Amazon seems to turn the operational issues and successes of their enterprise into building solutions that can be built out as an offering for commercial products and services. Think back to the creation of Amazon Web Services, which began with Amazon identifying core competencies of running a lean infrastructure of services like compute and storage. This eventually gave way to the idea of offering this as a service - Amazon Web Services which is now a leading global cloud provider.

When announcing that Amazon, Berkshire Hathaway, and JPMorgan were teaming up to create an independent healthcare company, their main reasoning was to serve their employees. This comes at a time when businesses in America are growing more frustrated with the options available to them for employee healthcare coverage and expensive medical costs for employees.

It is unclear how much the three companies plan to change healthcare offerings for their employees -- will they be looking to help employees find doctors? Negotiate lower costs of care for employees? Use technology to drive down healthcare costs?

Utilizing their own employees to test and navigate what creating an independent healthcare company could look like, it will not surprise many if they choose to offer their healthcare options to the entire U.S. market, or even just the 151 million Americans who get health insurance coverage from their employer. If this new company can successfully solve the healthcare woes of Amazon, Berkshire Hathaway and JPMorgan, then it can most likely help solve the issues other companies in the U.S. are facing as well.

Incorporating Technology Into Healthcare

Whatever the solution, the three businesses have made it clear that technology will play a central role in this new offering. While the healthcare industry is not going to be easy to navigate, Amazon, Berkshire Hathaway and JPMorgan have the capital and resources to experiment with the industry. The only focus of this vague venture thus far is that it will be “technology focused” and to provide their U.S.-based employees and their families with “simplified, high quality and transparent healthcare at a reasonable cost” according to the official announcement.

How they plan to incorporate technology and bring down costs has been widely speculated on, and there are several ways they may go about doing this. Speculators have reasoned that they may leverage Amazon’s Whole Foods acquisition as brick and mortar locations for minute-clinic style health services. Others believe they will invest in telemedicine solutions, or leverage the Amazon platform to deliver medication. If this goes well for Amazon, Berkshire Hathaway and JPMorgan employees, the belief is that this could be rolled out to more people in the U.S.

Even if this is not rolled out to employees in the U.S. outside of these three companies, there are already signs that it could influence the healthcare industry for the rest of us. In fact, just two days after the news broke that these three companies were forming a healthcare company with a technology focus, CEOs at major health insurance giants “used their earnings calls to talk about investments they are making in digital, mobile and related technology” according to Forbes. This means that a successful Amazon - Berkshire Hathaway - JPMorgan - healthcare model could very much push healthcare industry to put a greater investment in technology, a push that many experts in health tech believe would drive down the cost of care in the U.S.

Whether You’re Ready or Not, Technology is the Future of Healthcare

Employers and Americans alike are fed up with the unaffordability of healthcare and the limited options available for healthcare delivery. Leaders in tech have been arguing for years that the answer lies in technology. Health technology solutions are on the rise, but it may take a huge player like Amazon to enter the healthcare market and cause the disruption people in the U.S. have been waiting for. It is just a matter of time until we see if Amazon’s new healthcare offering will be the first to disrupt the industry, or if someone else will beat them to it. 

Edited by Mandi Nowitz
By Special Guest
Alexandra Bohigian, Enola Labs Software ,

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