Amazon is behemoth of both the tech world, with Amazon Web Services, and the consumer product world, with its online sales and delivery service, plus its Kindle and Echo product lines. Following an announcement at the end of January, there is now firm evidence the company and its founder Jeff Bezos, one of the richest men in the world, want to get into the healthcare game, too. (See Amazon's Checkout-Less, AI-Powered Store Opens in Seattle.)
Bezos is the boss and founder of Amazon, but he also owns or runs a few other companies too. One of these is Blue Origin, a human spaceflight company. He also owns US newspaper The Washington Post and invests in many companies, including Airbnb, Basecamp and Twitter, and was one of the first investors in Google. Just this week, Amazon indicated it would get into the package delivery service business, as well.
Healthcare in the US is often described as a messy, inefficient, unsustainable system, with profits built in at every level, especially for large insurance companies, leaving consumers with few reasonably priced choices. Many large companies, including Apple and auditor PwC, are attempting to get involved to make healthcare better for everyone, including employers, who often pay heavily for employee premiums. And now it seems Amazon, along with global conglomerate Berkshire Hathaway and JPMorgan & Chase, is trying to get a slice of what could be a very lucrative offering.
Jeff Bezos founded Amazon in his garage in 1994 and is now one of the world's richest men, with a personal fortune of $115.3 billion. (Image: NPR)
There isn't much detail on what Amazon and its partners are planning, but the gist of it seems to be better, cheaper health insurance that uses technology as its underpinning. The official announcement states that the offering will only be available for the families of employees at Amazon, Berkshire Hathaway and JPMorgan & Chase; however, even this is likely to send shockwaves through the US health ecosystem as the three reveal more of their plans to shake up a stagnant and decidedly non-consumer friendly market.
Recode also reported, in its "by the numbers" article on Amazon's entry into the US healthcare market, that profit margins may come into play: The current insurance providers have huge profit margins, while Amazon, Berkshire Hathaway and JPMorgan & Chase have substantially smaller margins. All this matters when considering the new partnership will likely bring cheaper insurance to its target audience.
In its report into the US healthcare ecosystem, PwC said that this is a $5 trillion market and that "seismic change" will soon hit the industry. With the huge improvements that are currently taking place in revolutionizing the medical world with ongoing diagnosis and omnipresent healthcare, it makes sense why Amazon wants to enter a market which, in the US and all over the world, will see huge shifts in the next decade or two.