If Jeff Bezos sneezes and it vaguely sounds like the name of a company, the stock will shift 5%.
At least that’s what appears to be happening: Yesterday, Amazon announced it is starting a healthcare company with Berkshire Hathaway and JPMorgan. There aren’t any real details yet, but across the board $30B in market cap for healthcare companies was vaporized! Amazon delivery is fast, especially when it’s a dropkick to your stock price.
There will be more details about this later, but it’s important to remember that this isn’t the first consortium of employers that have tried to bring down healthcare costs. The real question is, how is this different?
Here’s one guess: Amazon is using its own employee base as a testing ground for an independent insurance plan or health benefits manager. First it could create its own plan for employees which ties together its seemingly disparate healthcare moves in care delivery, pharmacy distribution, health data, etc. Then once it’s fine tuned and the company has built out a marketplace of suppliers (providers, pharmacies, etc.), it can sell that service to employers or individuals.
We like to call that “dogfooding” your own product.
This is actually a similar story with what happened with AWS, the company’s incredibly fast growing cloud services arm. Amazon had an internal problem, it came up with its own standardized solution, then it turned that into a product to sell to enterprises. What if that same playbook was applied to a health insurance or health benefits plan? (An issue every company deals with, especially smaller ones.)
Check out our 100+ slide deck on 11 other trends in the space including an an increasing focus on Medicaid, challenges to lab testing giants, new patient financing options, and more.
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