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Amazon's Dip into $1 Trillion Waters: A Chance to Offer A Complete Solution

 

Amazon dipped its feet in some rare water, albeit briefly.... the $1 Trillion valuation club... currently, a club of one.... namely, Apple. That news triggered a flurry of activity on social media, especially Twitter

 

I particularly enjoyed reading CNBC tech reporter Chrissy Farr's piece on this topic. She conjectured that amongst Amazon's many offerings and business units, healthcare and pharmacy would be a large component of their future success. In essence, with Amazon's extensively built-out and scaled e-commerce infrastructure, profitable investment in Amazon Web Services (AWS), and growing success of Voice (Alexa/Echo), they are optimally set up for extensive business development and industry disruption. With Amazon's recent collaboration with Berkshire-Hathaway and JP Morgan, and the hiring of CEO Atul Gawande, M.D., Amazon, is definitely doubling down in the healthcare space.

 

Another great (and pretty detailed) breakdown of Amazon's potential business development was from Nikhil Krishnan of CBInsights. In this analysis, Nikhil highlights five areas that would make sense for Amazon to pursue: 

 

1. End-to-end pharmacy 

2. Claims management and health benefits (esp for self-insured employers and small health plans) 

3. Medicaid/Medicare management 

4. Provider tools (EMR + Procurement + prescription management) 

5. Labs-as-a-service

 

The resonating theme here is that all these spaces involve a combination of supply chain inefficiency, too many middlemen (think bloated mid-midsection), and poor use of technology. 

 

So what's the takeaway?

 

Amazon has the scale, reach, vision, tech maturity, and business acumen to do something no one has been able to do for healthcare... offer a complete solution... the last time we heard these words for a major industry was in the music business in the days of Napster, when Steve Jobs strolled on stage and said "... one more thing..." and introduced the iPod. A completely solution to buying, listening to, and transporting music in a well designed system. 

 

Yes, healthcare is not the music industry. But, it is definitely a fragmented industry... in need of coalescence. Everyone in the industry is too busy getting their piece of the pie. Amazon has the power to redefine the pie... to revamp the ecosystem for healthcare services, products, and transactions; to cut a lot of the middlemen... to generate true value... to offer a complete solution.

 

P.S.- Here is a great book about Amazon I recommend:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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