Instructor: David Schuff, Section 003

3 CEOs plan to disrupt the healthcare industry

Berkshire Hathaway, Amazon, and JPMorgan Chase have a plan that could disrupt the entire healthcare industry. The CEOs of these companies hope to lower heath care costs for the companies’ employees and deliver significant advancements for all patients. This is a monumental challenge being that the health care spending represented 17.9% of the U.S. economy in 2016 and continues to rise. Many skeptics say that health care costs cannot be meaningfully lowered by three companies and that the sector will not change without government action. However; this would not be the first time Amazon has disrupted an entire industry. Amazon’s success has been based on removing entire layers of product sales and distribution, adopting new ways of thinking, and pursuing technological innovation. The new company these CEOs plan to establish will not seek to profit off of health care, but instead offer it at the lowest cost possible. One way to lower costs is to cut the number of people in the industry by moving toward more automation and adopting artificial intelligence in areas such as data input, automated health care tests, lab work and food preparation. Another way to lower health costs is by expanding telemedicine so health care providers could sharephysicians and nurse practitioners. Do you think this is something people will become more comfortable with or will the majority of people still want to physically go into a doctor’s office? With Amazon entering into health care do you think it has a long term goal of entering drug sales by launching an online pharmacy? This would also lower costs by cutting out the middleman. The last way this new company would reshape the industry is by tying payment to quality of care, so consumers would pay a fee based of the value of the care they received. Do you think these three CEOs will be able to create this new health care company and to what extent will it transform the healthcare industry?


One Response to 3 CEOs plan to disrupt the healthcare industry

  • Gabrielle, you raise some thought-provoking questions. It’ll be interesting to see how these companies pool their resources—like Berkshire Hathaway’s knowledge of insurance and Amazon’s vast data on consumer buying behavior, to disrupt the healthcare industry. Using technology to simplify processes and reduce manual data entry will be integral in cutting costs. Specifically, using artificial intelligence to enable people to self-diagnose their ailments based on their symptoms and medical history could be a major benefit and cost saver. I don’t think this will eliminate the need for physicians altogether, but it could save people a lot of time and money if they don’t have any serious issues that need to be looked at in person.

    It’s difficult to say whether this new company will disrupt the healthcare industry since all the details haven’t been established yet, but if their new model is successful, I could definitely see other companies trying to implement similar strategies. Even though the CEOs expressed that this venture wouldn’t be focused on profits, it’s not farfetched to imagine that Amazon will eventually create an online pharmacy. It already has a vast distribution network and expertise in online retail. As you had mentioned, selling medication directly to the consumers would eliminate the middleman and significantly reduce costs. This could extend beyond the employees at these companies and could provide a major benefit to all U.S. consumers. This could be the way that Amazon disrupts the healthcare industry.

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