Amazon trying healthcare again

Healthcare is too damn profitable for Amazon to ignore. It’s investing in telehealth and gambling that younger healthcare customers want a faster and more efficient system than the current one filled with appointments and tests.

Many tech firms have healthcare ambitions. Apple tracks well-being through the iPhone; Microsoft offers cloud-computing services to health firms. Alphabet sells wearable devices and is pumping money into biotech research.

Amazon is now busy creating the most ambitious offering of them all. It launched “Amazon Clinic,” an online service operating in 32 states that offers virtual health care for over 20 conditions, from acne to allergies. Amazon describes the new service as a virtual storefront that connects users with third-party health providers.

AS BIG tech companies face a brutal slowdown, the hunt is on for new areas of expansion. Amazon, now America’s second-biggest business by revenue, is a case in point. In the final quarter of 2022, its sales are expected to expand by just 6.7% year on year. Last week, on November 17th, Andy Jassy, the firm’s chief executive, confirmed that it had begun laying off employees and would continue to do so next year. Mr. Jassy said it was the most challenging decision since becoming boss. But he also noted that “big opportunities” lay ahead. He highlighted the largest, most lucrative, and hellishly complex business in America: health care.

The Amazon Clinic launch follows the $3.9bn takeover, announced in July, of One Medical, a primary care provider that offers telehealth services online and runs brick-and-mortar clinics (the deal has yet to close). It has 790,000 members. The deal was led by Neil Linsday, formerly responsible for Prime, Amazon’s subscription service, who has said health care “is high on the list of experiences that need reinvention.”

Is it viable? You bet it is. Research clearly shows that younger generations want their healthcare issues resolved quickly. They’re sick of having to make appointments for tests and more tests, and electronic medical records have been a failure. They want one-stop healthcare, which is why CVS and Amazon are investing in healthcare.

What are the opportunities for pharma? Data. I’m not talking about personal data but aggregate data that can help pharma refine its messaging and provide feedback in real-time. However, given the paranoia about data, it will be difficult. Data must be reviewed by legal teams to ensure that it’s not personal, and pharma has to demonstrate that the data isn’t personal and that it leads to better outcomes.

Amazon’s attempts at disrupting healthcare will be subject to intense scrutiny. Nonetheless, it should have a positive effect on health care in America. Its experience at keeping customers happy while generating razor-thin margins could improve primary care and force other providers to up their game. It may also prompt other tech giants to do more to disrupt health care themselves. All this may be just the medicine that America’s healthcare system badly need and, more importantly, patients want.