When Jeff Bezos announces he's after your industry--it's a wake-up call. But when Jeff Bezos announces he's after your industry and that he has the financial support of two of the wealthiest companies in the world--it's time to throw a Hail Mary pass.
When Amazon, Berkshire Hathaway, and JP Morgan announced that they would be forming an independent healthcare company, it sent a shockwave through the market. This announcement was, no doubt, the beginning of a new era--and one that has been long overdue.
The current healthcare system is complicated, inefficient, and costly. As it stands today, companies, employees, and individuals are feeling the pressure of continuously rising costs. In fact, 2017 annual premiums for employer-sponsored health coverage was around $18,700. Employees, on average, paid about $5,700 for coverage.* And the costs seem to keep going up.
These conditions made the healthcare industry ripe for disruption in the Digital Age.
Why leveraging digital is healthcare's only option
The healthcare industry, in general, has been slow to embrace digital technology. On even a basic level, imagine how much money is wasted each time an insurance company mails a statement letter to customers. Or imagine what could happen if a doctor's office used data to streamline appointments and office wait times.
But healthcare companies are slow to adapt in the Digital Age because they're either too big and lack agility or are riddled with long-standing infrastructural problems. When they try to innovate, they have trouble executing. The issues can range from an IT department that's unable to support new software or siloed teams that cannot effectively implement any new change across the organization.
This would not be an issue for Amazon, Berkshire Hathaway, and JP Morgan. They would not be bound by outdated policies or old technology. They could start from scratch and find time-saving, cost-efficient digital solutions--and would have the financial backing to put the right people, processes, and technology in place.
Developing technologies that could transform healthcare
Even though the partnership announcement with Berkshire Hathaway and JP Morgan is only a few weeks old, Amazon is already starting to quietly disrupt the market. According to CNBC, Amazon launched an exclusive line of over-the-counter health products. Combine the cost-saving implications with the power of Amazon's e-commerce abilities, and this line of products is formidable challenge to companies like CVS, Tylenol, or even Walmart. Why would customers go out of their way to go to the drugstore to buy overpriced brand-name pain relievers? It would be easier and cheaper to tell Alexa to place the order and get it delivered straight to their door.
But the most interesting thing to note about this latest disruption is that Amazon is targeting certain industries and applying their successful digital formula to them. They've had this formula nailed down for years--when it comes to e-commerce Amazon is not a force to be reckoned with. However, if other healthcare-related industries wish to stand a fighting chance there are several other developing digital technologies to explore.
Blockchain can be used for more than cryptocurrency. This decentralized platform would make an excellent and secure place for storing highly sensitive patient information and data. In fact, there are several entities that are already leveraging blockchain for healthcare information including Medicalchain and MediBloc.
Artificial intelligence (AI)
Leveraging AI in the healthcare industry could potentially save not only money, but lives. If all patient information and data is stored on one platform, then AI could be used to find patterns in that data and predict possible outcomes.
As wearable technology becomes more sophisticated it could change the entire doctor/patient experience. A wearable could continuously track and store a person's vital signs in the cloud and alert the patient's doctor when patterns shift into dangerous territory. This could cut back on constant office visits or checkups.
The healthcare industry has been slow to change but this area is ripe for disruption. And now that Amazon, Berkshire Hathaway, and JP Morgan have teamed up, it's a matter of when. The best thing for any healthcare company to do is to invest in digital technologies that can be leveraged to make life easier and more affordable for customers.
*The Henry J. Kaiser Family Foundation, 2017 Employer Health Benefits Survey