Amazon takes aim at healthcare costs

Coming hot on the heels of Apple's announcement last week that it is seriously getting into the healthcare game came another healthcare announcement from a US tech giant this week in the form of Amazon, although what the proposal actually entails is still a bit fuzzy.

The online retailer and cloud provider has got together with Warren Buffet's conglomerate Berkshire Hathaway and financial services firm JPMorgan Chase to explore how to provide healthcare to their tens of thousands of US employees. Speculation initially centred on whether the trio was going to try to take on America's notorious health insurers, but it looks much more likely now that the main game is to explore how technology can cut the cost of healthcare provision.

As Buffet memorably describes it, “the ballooning costs of healthcare act as a hungry tapeworm on the American economy.” So the plan is that an independent, not-for-profit company will be set up to focus on technology solutions to provide what they hope is “simplified, high-quality and transparent healthcare at a reasonable cost” to their US employees and their families, and eventually perhaps the rest of the country.

That seems to suggest investments in telehealth with concierge services, personal health records or apps, virtual diagnostic services, perhaps dashboards that show the hidden costs of medical services, or even just negotiating bulk deals with healthcare providers, pharmacy chains and insurers. It's no secret that Amazon is eyeing up the pharmaceutical distribution market and last October it received a number of wholesale pharmacy licences, so those plans may be enveloped into this new initiative.

It all sounds most interesting but Amazon CEO Jeff Bezos seems to be well aware of the difficulty they are facing in reducing the enormous cost of healthcare in the States. However, like we said about Apple last week, if there's one company that knows how to make things more efficient, cheaper and easier for customers through that old cliché of digital disruption, it's Amazon.

“The healthcare system is complex, and we enter into this challenge open-eyed about the degree of difficulty,” Bezos says. “Hard as it might be, reducing healthcare’s burden on the economy while improving outcomes for employees and their families would be worth the effort. Success is going to require talented experts, a beginner’s mind, and a long-term orientation.”

With America's current political leadership utterly clueless about healthcare, it's good to see that some of its biggest companies are finally biting the bullet and getting on with doing it themselves. The effect of this announcement – if any – on the Australian healthcare sector is unknown so we'll sit back and watch, but in the meantime another private sector US initiative is shortly to arrive here to do a bit of disruption itself.

As we reported in one of our most popular stories of the week, HL7 Australia is getting ready for Argonaut Australia, the antipodean arm of the US Argonaut Project that will seek to guide the implementation of the FHIR standard for local vendors and health services. This is set to really light a fire under the local industry, if you'll pardon the pun, and it's odds on that it will be FHIR that proves the game-changer in digital health more than any other factor, including the Amazon juggernaut.

We think this augers well for the future of the industry in Australia and New Zealand and we expect to see things move a little faster over the next few years. The Australian Digital Health Agency is right behind it and is already able to expose the My Health Record to authorised third parties through FHIR APIs. It will be interesting to watch as smaller vendors and healthcare organisations take it up in earnest and how soon we will see the benefits, if indeed there are any. Let us know what you think.

That brings us to our poll for this week: Do you think new technologies really can reduce the cost of healthcare?

To vote, sign up for our weekend edition or leave your comments below.

Our poll last week asked: Is Apple onto a winner with its Health Records app? The majority thinks so – 63 per cent to 37.

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