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How Amazon’s continued expansion into healthcare could support the sector – TechCrunch


After Amazon’s $3.9 billion acquisition of One MedicalBusiness Insider reported that the company to add mental health services to its portfolio. While there are skeptics who fear Amazon’s track record on privacy in the healthcare context, some say the steps the company is taking could be positive for the industry.

The tech giant originally entered the healthcare industry after acquired PillPack, an online pharmacy, in 2018 and later rebranded as Amazon Pharmacy. The company also provides AmazonCare as a way for individuals in certain states to seek treatment.

While these efforts appear to be paying off, Amazon also had a failed venture, Haven, with Berkshire and JPM that dissolved after several internal problems.

Despite the ups and downs, Amazon said in a Press release detailing the acquisition of One Medical which plans to improve the quality of care at all levels:

We believe healthcare is high on the list of experiences that need to be reinvented. Make an appointment, wait weeks or even months to be seen, miss work, go to a clinic, find a parking space, wait in the waiting room and then in the examination room for minutes that are too often in a hurry with a doctor and then take another trip to a pharmacy – we see many opportunities to both improve the quality of the experience and give people back valuable time in their days.

Now that Amazon has its own means of distributing drugs, the acquisition could go some way to boosting demand, as the company can now provide access to suppliers in different markets.

For Deena Shakir, a partner at Lux Capital, Amazon’s move shows the value of healthcare to leading tech companies.

“This deal underscores the value Big Tech places on healthcare and the importance of omnichannel/hybrid (brick + mortar in addition to virtual) as well as technology services,” Shakir told TechCrunch via email. “It’s a better multiple/comp than what we’re seeing in public markets right now and shows that there are valuable exit opportunities for companies even in a down or icy IPO market.”

But for Adrian Aoun, founder of Forward Health, he said he wanted Amazon to do more.

“You literally take the most awesome tech company in the world and just aim low,” he said.

A medical, based in San Francisco, provides care in nine markets and serves nearly 400,000 people, but for Aoun, that’s not enough for Amazon. He told TechCrunch that Amazon needs to align itself with being proactive rather than reactive in healthcare.

“What Amazon just did was they just got aligned with the wrong incentive,” Aoun said. “They just literally said, ‘We’re going to focus on keeping you in work, not your life. “.”

Even as the tech giant pushes to expand its own services, Aoun added the company needs to be resourceful.

“Amazon just frankly made what I would say is one of the classic innovation mistakes,” Aoun said. “They are trying to rebuild the old world. They don’t try to innovate and build the new world[…] If you’re not really going to innovate, I don’t know if it’s going to do much.

Although Amazon’s acquisition of One Medical is confirmed to be in the works, the launch of their on-demand therapy has yet to begin. According Initiatedwhich originally announced the launch, the product would be distributed through Amazon Care and was a way for the company to bolster its healthcare business.

Both Shakir and Aoun agree that Amazon’s expansion is putting new pressure on startups and investors to enter the space with stronger offerings.

“At the end of the day, healthcare is undoubtedly a huge market opportunity, and the pandemic has brought to light its many inefficiencies and reliance on technology,” Shakir said. “With Amazon now on the market, a pleasant customer experience will be a must, not just a pleasure to have. While Big Tech will always play an important role in the healthcare ecosystem, breakthrough innovation is more likely to come from early-stage entrepreneurs, who could partner with Big Tech to scale.

Aoun explained that it won’t be necessary to follow Amazon, but rather to find ways to be creative in the space.

“It actually opens up more opportunities for other players because now that Amazon is going to be distracted, frankly, with a strategy that won’t go very far. Now you have a whole bunch of opportunities for everyone world is starting to come into the game,” he said.

As Amazon begins to implement its healthcare services in greater capacity, some have raised questions on patient privacy data in light of recent events.

Talkspace and BetterHelp were in the spotlight as the US Senate earlier this year called on these mental health app providers to clarify their data collection and sharing policies after reports suggested the companies may share data with Meta and Google.

Shakir said Amazon needs to understand the space and come to terms with the fact that big tech companies have a “complicated relationship with healthcare.”

“One of the challenges of creating a product for healthcare is that it not only requires nuances – understanding clinical workflows and consumer habits – but also needs to be built within constraints. specifics such as HIPAA, billing codes, EMR interoperability, etc.,” she said. “It can be especially difficult when innovating within a large company that also has its own stakeholders and competing priorities.”

Other tech giants such as Apple and Google have also ventured into healthcare.

Although Apple has not acquired a company, they have in partnership with various healthcare providers to provide healthcare professionals with patient biometric data collected via an Apple Watch. To name a few features, a patient can monitor their heart rate, download apps to help with neonatal care, and manage medication intake.

Google on the other hand, has focused more on the research side of health care. Through partnerships at various universities, they have been able to expand digital wellbeing research, provide suicide insights, and expand Fitbit functionality.

Bigger players focusing on healthcare could drive new entrants rolling, but it could also push startups to explore aspects of the space that haven’t garnered much attention in the past, but could result in meaningful improvements for patients and payers.

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