In a much ballyhooed development, the triumvirate of Amazon, Berkshire Hathaway and JP Morgan announced recently they’re teaming up to upend the healthcare insurance market (a massive undertaking and market opportunity). Most corporations and consumers alike hate the complexity and opaqueness of the health insurance sector. You don’t think about it until you need it, and then you often find complications, hidden out-of-network providers lurking in your chain of care, or worse, poor health outcomes on the other end of the process.
The labyrinthian web of hospitals, healthcare providers, doctors, pharmacies and pharmaceutical companies often proves intractable at best and ruinous at worst. Amazon’s top dog, Jeff Bezos, admits as much: “The health care system is complex, and we enter into this challenge open-eyed about the degree of difficulty,” he said in a statement. “Hard as it might be, reducing health care’s burden on the economy while improving outcomes for employees and their families would be worth the effort.”
And that’s the truth — the market potential is massive.
While this foray would be initially limited to the employees of those three companies alone, the corporations and their respective leaders are so closely monitored in the business press that any successes or failures could soon prove prescriptive for the entire healthcare market.
How these companies plan to improve health outcomes while reducing costs is still a bit of anyone’s guess — the announcement didn’t have a ton of specifics just yet. According to the New York Times, “One potential avenue for the partnership might be an online health care dashboard that connects employees with the closest and best doctor specializing in whatever ailment they select from a drop-down menu. Perhaps the companies would strike deals to offer employee discounts with service providers like medical testing facilities.”
In another article, the NYT author speculates slightly differently: “Amazon and its partners, JPMorgan Chase and Berkshire Hathaway, see technology as a way to provide simplified, affordable medical services. Although the alliance is still in the early stages, it could create online services for medical advice or use its overall heft to negotiate for lower drug prices.”
The bottom line, from what we can tell at this moment, is that these companies will certainly modernize the consumer-facing elements of the hospital or pharmacy process. Making appointments like booking a reservation on OpenTable; no more forms to fill out — you could just have a pass in your Apple Wallet that you scan via NFC when you walk in; the possibilities are tantalizing. But one thing we think will definitely play hugely into their plans?
Funny enough, this actually makes these trailblazers second-movers compared to China’s top companies, specifically Alibaba and Tencent. Quoting again from NYT: “The companies’ technological push is encouraged by the government. Beijing has said it wants to be a leader in A.I. by 2030 and pledged to take on the United States in the field. While officials have emphasized the use of artificial intelligence in areas like defense and self-driving cars, they have also aggressively promoted its use in health care… Alibaba and Tencent, which already dominate China’s e-commerce and mobile payments sectors, are at the forefront. Among their goals: building diagnostic tools that will make doctors more efficient.”
In China, there’s only 1.5 doctors per 1,000 citizens (about half of the ratio in America), with a rapidly aging and increasing obese patient profile. Helping those docs handle the crush of current and future patients is a huge and important undertaking, and these tech companies are making some big inroads in utilizing A.I. to speed and improve that process:
“Last year, Alibaba’s health unit introduced A.I. software that can help interpret CT scans and an A.I. medical lab to help doctors make diagnoses,” according to the New York Times. “About a month later, Tencent unveiled Miying, a medical imaging program that helps doctors detect early signs of cancer, in the southwestern region of Guangxi. It is now used in nearly 100 hospitals across China.”
It’s obviously too early to say exactly what the American alliance between Amazon, Berkshire Hathaway and JP Morgan will actually look like in practice. But we’re betting A.I. will play a starring role in modernizing our health industry — as it turns out, we’re already behind the eight-ball.