Tech Wants In On Health Care — And Amazon Is Leading The Charge

16th February, 2018 by

Amazon has made a name for itself as an industry disrupter, thanks to its huge market share in book sales, groceries, basic goods and more. They’ve even nabbed some major film and television awards while they’ve been at it. This level of marketplace leverage might have some drawbacks—their line of basic goods often contains mass-produced and cheaper variations of equivalent products from other retailers. However, all of this basically states that Amazon has managed to not just get its foot in the door, but also to use that foot to kick the door down. Its emphasis has always been on its customers, whose every whim is sometimes met before even they realise what it is they want.

New Exciting Industry: Healthcare

The company is now partnering with banking giant JP Morgan and holding company Berkshire Hathaway, the aim being to embark on the company’s most complex and ambitious project yet: a healthcare business. The company announced its plans on Tuesday with prototypical tech bombast: the initiative’s objective is to disrupt an old, aging and increasingly complex industry by providing solutions through technology. These solutions would also in turn help both simplify the process and decrease the ever-spiralling costs. The company, which does not have a name or CEO yet, is focusing not on customers, but on their own employees.  

The emergence of these companies, and others like them, goes a long way in showing just how complicated and vast an overhaul of the healthcare system would entail. Bloomberg reports that the combined market value of Amazon, JP Morgan and Berkshires Hathaway is around $1.6 trillion. That number is certainly stratospheric enough to give some pause for thought. Companies like JP Morgan came out of the 2008 financial disaster relatively unscathed and unaccountable, largely because they were deemed “too big to fail”. By allowing them influence in the healthcare market which, according to the NHE, costs in the vicinity of $3 trillion, are we potentially giving these institutions more leverage in our everyday lives? How will a company like JP Morgan be held accountable for any potential misconduct if, in addition to propping up the American economy, they are also a pillar of our national healthcare?

For good or for profit?

Amazon CEO Jeff Bezos recently unseated Bill Gates as the world’s richest person, and while the details of the business aren’t clear, and Bezos and JPMorgan have much to prove in the philanthropy department. The participation of Warren Buffett’s Berkshire Hathaway company could be a good indicator that the company will be run more like a non-profit than a for-profit company.

The company has yet to unveil a plan which fully delineates the effect it would have on the industry as a whole or the market at large. But since the announcement, the disruption has seemingly already worked, cutting $30 billion in market revenue in a matter of hours, thanks in no small part to the 1.2 million employees the company currently insures. Just their announcement makes for a sizable shift in capital, already turning the speculative company into something of an industry powerhouse.  

Healthcare Disruption

The announcement even rattled Aetna, itself an industry disrupter when it announced in December that it would be acquiring drugstore chain CVS in a $69 million merger, intended to reshape the healthcare industry. What this means is that in a matter of two months there has been an entire shift in the healthcare market, thanks largely to changes in technology and new companies infiltrating the marketplace. Much of their effect is still largely hypothetical, the merger’s influence speculative, and its potential to undo years of systemic problems up in the air. But it is nevertheless a moment in which companies are putting their best foot forward in an attempt to synthesise their new laid plans, and maybe, just maybe, make good on that whole “change the world” plan. If that can go from buzzy Silicon Valley tagline into an actual applicable credo, perhaps all this disruption won’t have been in vain after all.  

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