Will Apple, Google, and Amazon be successful in disrupting the healthcare industry?
Some of the biggest and most famous brands in America are making big bets on health care. The blue chips of Silicon Valley — Amazon, Apple, Google, Uber, and JP Morgan— have announced in the past several weeks they’re interested in disrupting an industry that has challenged us with rising costs and inefficiencies for decades.
None of these companies appear to be competing directly with each other, (at least not yet). Some are focusing, for now, on helping their own workers with better health care administration and improving their employees’ health and establishing their own clinics. Others are testing the waters to collaborate with existing health insurance companies. Another is diving headlong into its new venture, ready to go toe-to-toe with the current top dogs in their field.
But taken all together, these ventures span much of the health care food chain, from insurance to distribution. They all share the goal of lowering costs, whether by more administrative efficiency, by encouraging better health, or by simply underselling the existing market. Yet, disrupting American health care won’t be simple, but they have a head start.
These are businesses with a proven history of disrupting existing business models:
Amazon, for example, brought an unprecedented level of selection, price transparency, and convenience to retail shopping. Uber has — through, of course, some ethically questionable means — totally changed the landscape for hired driving and has its sights set even higher, on transportation in general.
But, they will have to confront a very familiar question: Is health care anything like other parts of the economy?
Health Economics
Health care, one-sixth of the American economy, is governed by a hopelessly tangled mix of payers, administrators, providers, and manufacturers. Not to mention the patients, all 350 million of us, who have never proven very good at treating health care, like any other commodity?
The complexity, the sheer scale and the lack of transparency— not to mention the existing $3 trillion industry and its many vested players, aren’t going to stand idly by while the disrupters supplant them — are standing in Silicon Valley’s way.
No doubt the commitment from Amazon’s Jeff Bezos, Berkshire Hathaway’s Warren Buffett, and J P Morgan’s Jamie Dimon will clear the way for some broad experimentation and perhaps improve on some of the inefficiencies and redundancies in a very complex area of our economy. Only time will tell.