How Amazon’s continuous investment in healthcare could benefit the sector. Amazon isn’t afraid to take huge risks.
Business Insider stated that following Amazon’s $3.9 billion purchase of One Medical, the business would expand its offering to include mental health services. Despite some doubters who worry about Amazon’s privacy history in healthcare, some believe the company’s actions could be advantageous for the sector. The digital giant first entered the healthcare industry when it purchased the online drugstore PillPack in 2018 and then changed its name to Amazon Pharmacy. Additionally, the business offers Amazon Care as a mechanism for people to get healthcare in some states.
Even while those initiatives appear to be paying off, Amazon also had a failed project with Berkshire and JPM called Haven that was abandoned due to numerous internal problems.In a manner, the acquisition could drive demand now that Amazon has its means of pharmaceutical distribution because the corporation can now connect with suppliers in different areas. Deena Shakir, a partner at Lux Capital, believes that Amazon’s action demonstrates the importance of healthcare for top tech businesses. The significance of omnichannel/hybrid and tech-enabled services, as well as the value that Big Tech is placing on healthcare, are both highlighted by this deal, according to Shakir. It demonstrates that there are worthwhile exit possibilities for companies even in a downturn or icy IPO market because it is a better multiple/comp than what is currently being seen in the public markets. However, Forward Health’s founder Adrian Aoun said he wishes Amazon had done more. You’re just aiming low, taking literally the most impressive IT firm in the world, he added. One Medical, a San Francisco-based company, serves around 400,000 patients and offers services in nine regions, but according to Aoun, Amazon needs more than that. He said that Amazon must align itself with proactive healthcare rather than reactive healthcare. Amazon recently aligned with the completely incorrect motivation, according to Aoun. The words “we’re going to focus on keeping you at work, not alive” were used in their entirety. Despite the internet behemoth’s push to increase the scope of its own offerings, Aoun emphasized that the business must be creative. According to Aoun, Amazon recently committed one of the most well-known errors in innovation. They are attempting to revive the ancient world. They do not endeavor to be innovative or create a new universe. He doubts that this will have much of an impact if one doesn’t actually intend to innovate. Even though it is reported that Amazon is purchasing One Medical, their on-demand therapy has not yet gone live. The product would be distributed through Amazon Care and was a method for the company to boost its healthcare business, according to Insider, which broke the news of the launch. Shakir and Aoun concur that the growth of Amazon is increasing the pressure on entrepreneurs and investors to enter the market with more potent products. In light of recent occurrences, some have raised concerns regarding patient personal data as Amazon starts to expand the scope of its healthcare services. As a result of reports implying that Talkspace and BetterHelp may be sharing data with Meta and Google, the U.S. The Senate earlier this year requested clarification from these providers of mental health apps regarding their data collection and sharing practices. Apple and Google, two more tech behemoths, have both entered the healthcare industry. Despite not purchasing any businesses, Apple has worked with several healthcare organizations to give medical practitioners access to patient biometric information obtained by an Apple Watch. A patient can regulate their medicine intake, track their heart rate, and download applications to assist with newborn care, to mention a few things. Google, on the other hand, has placed more emphasis on medical research. They have been able to advance Fitbit features, provide information on suicide, and broaden studies into digital well-being through collaborations with institutions.
Larger firms concentrating on the healthcare industry may crush new entrants, but it may also encourage startups to investigate areas of the market that haven’t received much attention in the past but may result in big gains for both payers and patients.
