Amazon’s move to the health care space has the potential to revolutionize the industry.
Beginning in January, 2018, Amazon has been moving towards its latest business venture: healthcare. While a shift to health care may be unusual for Amazon, the change recognizes the fact that health care is an intricate and complex business that a disrupter like Amazon could greatly influence. Healthcare is one of the biggest industries in the U.S., but also one of the most inefficient. Approximately one third of health care spending is unnecessary and is usually wasted. A number of companies have attempted to reduce some of this waste, most notably with the partnership between Amazon, Berkshire Hathaway and JPMorgan Chase. These three businesses have a combined 1.2 million employees and the hope is their partnership will allow them to bring costs down in their own health care plans. This announcement has already had an impact on the healthcare community and drawn notice from other stakeholders in health care.
According to the alliance, this business venture will not be aimed towards making a profit, but instead will focus on reducing the costs of the healthcare system and making the system easier to navigate. Dr. Atul Gawande, a physician and advocate for health care reform, has been chosen to lead this new venture. While details about the venture are not yet known, Dr. Gawande’s past comments have hinted that he will concentrate on three main issues: improving health benefits, boosting primary care and lowering pharmacy costs.
The venture has also examined additional ways to lower health care costs, such as purchasing the pharmacy startup, Pillpack and investing in better software to compile medical records.Some see this as a move to make an online pharmacy platform that would allow patients to simplify obtaining prescriptions, moving the entire process to a personal, computerized system. Amazon may be able to capitalize on this new market through their existing success in online retail services. Amazon already provides medical supplies to hospital systems and they may be able to further expand within this market through sales of prescription drugs. Additionally, Amazon may also be able to integrate their Alexa home assistant technology into an integrated health program. Recent projects have used Alexa to monitor personal health, provide first aid response and report medical data. Increased utilization of Alexa-related services would allow for greater integration of Amazon products within the health care industry and may create additional ways to bring down costs.
Amazon’s move to the health care space has the potential to revolutionize the industry, as they may create a more efficient system that other large businesses may choose to adopt. The increased uncertainty for medical practitioners will likely lead to a number of legal questions, such as issues of data privacy and monopolistic behavior. There will likely be some government regulation of these new businesses and it will be essential to keep up-to-date with legal changes to allow businesses to stay in compliance as well as participate in these new ventures.