These giant powerhouses are working together to do something big in healthcare. Haven, the name for the organization set up by the giant retailer, insurer/diversified company, and financial services firm will initially be focused on employees of those three companies. Later, they will “share [its] innovations and solutions to help others.”
Haven was introduced almost two years ago, albeit without that appellation. Since then, it has been pretty quiet, at least as far as announcements of major innovations. (The company’s COO resigned after a year citing the Philly-to-Boston commute.)
There are plenty of skeptics, most citing the enormous complexity of healthcare, the Gordian knot of regulations, the lack of interconnection, perverse incentives – including for-profit stakeholders, and consumer expectations as all making it more likely that United Healthcare could build a successful commercial bank than JP Morgan will “fix healthcare.”
That’s fair, except Haven hasn’t focused on “fixing healthcare”, but rather fixing healthcare for the folks who work for the three owners.
What we know today – it looks like Haven will initially focus on drugs and virtual health.
Haven will operate on a non-profit basis.
Amazon had just over $41 Billion of cash on hand as of June 30. That hoard plus its distribution capabilities, existing customers and attractive stock make it a very capable acquirer.
Amazon is already selling prescriptions in Japan and distributing medical supplies in the US.
The company is building new product lines, and buying expertise, experience, and already-successful businesses. From FoxBusiness:
> Amazon [is launching] an exclusive line of 60 over-the-counter healthcare products, called Basic Care
> Amazon buys online pharmacy PillPack for $1 billion placing the online giant squarely against drugstore chains, drug distributors and pharmacy benefit managers.
> Amazon files for a patent for Alexa, its virtual assistant, which would detect when a user is sick and recommend and sell medications.
> Aurohealth, a maker of generic pharmaceuticals, teams up with Amazon for an exclusive over-the-counter pharmaceuticals brand called Primary Health.
The common thread is medications – manufacture the drugs, encourage adherence, enable distribution.
Last month, Amazon’s Seattle-based employees were introduce to Amazon Care, which boils down to a pretty sophisticated virtual/tele-health platform using a local medical provider group. That ensures employee health records stay with their healthcare provider, and aren’t “owned” or handled by the employer.
Don’t expect that to last…from Huron:
Amazon recently established a stealth lab, called 1492, that focuses on healthcare technology. While little is known about the products being created, speculation is that the retailer is developing tools to mine data from electronic health records, new telemedicine technologies and healthcare applications for its existing products.
I would expect Amazon to do much of its building thru buying; there are a lot of great companies out there innovating different parts of healthcare and buying gets a footprint, talent, and experience that would take too long and cost too much to build.
What does this mean for you?
Nothing yet. That will change.
Homorrow, Haven and workers’ comp.
It seems that if Amazon actually reengineers how consumers demand services by way of new distribution and technological platforms, then their market disruption will be successful in the initial target segments. It gets harder though the more pieces of the puzzle they try to consume. However, business process reengineering and cultural change are proven tools in effective strategic innovation.