Can Amazon and Apple Fix Our Healthcare System?
Written: November 2019
Amazon CEO Jeff Bezos, J.P. Morgan CEO Jamie Dimon and Berkshire Hathaway CEO Warren Buffett last January announced they were teaming up to tackle rising health-care costs. In the year the nonprofit company has been without a name, people have started calling it “ABC.” It’s now called Haven.
In August 2018, The Wall Street Journal reported major tech companies had signed a commitment to “share the common quest to unlock the potential in health care data, to deliver better outcomes at lower costs.” The companies, convened at a White House event focused on healthcare technology. The group included Amazon, Google, IBM, Microsoft, Oracle, and Salesforce. Apparently, Apple was not at the meeting, but is quite active in healthcare, much of it centered around its cardiac monitoring program with the Apple Watch and the Apple Health app.
The promise the companies made should help accelerate the emergence of a data-driven revolution in healthcare. Patients, providers, payers, and researchers all need easier and more compatible access to health records to enhance patient safety and lower the cost of healthcare. Unfortunately, healthcare data today is stored in silos at providers and payers. In large part, our healthcare data is locked up.
In theory, patients have access to their health data since the Obama administration distributed $30+ billion in incentives for the creation of patient portals and electronic health records (EHRs). The reality is quite different. Most people over 65 have multiple providers. Consolidation has occurred and many hospital networks have a range of services. However, some of the sub-specialty providers, such as urology and dermatology, remain outside of the networks. In addition, standalone practices in orthopedics and radiology have their own EHRs and portals. Another factor adding to the complexity is many people choose to get a second opinion or comparison shop on services such as radiology. The result of all this fragmentation is patients don’t have one patient portal, they have multiple. A friend of mine has 15. Nobody in the team of providers has a total view, including the patient.
Healthcare records are incompatible between providers. Even worse, you can look at test results at one provider, but you can’t easily download or email information from a record to another provider. You also cannot sort or search your health data. The bottom line is EHRs have become a train wreck. It is a tie between patients and providers as to who dislikes EHRs the most. EHRs are a failed promise. We can’t live without them, we can’t live with them.
- W. Bush hired a Chief Information Officer to fix this problem more than ten years ago. The CIO knew how to fix the problem but could not pierce the armor of special interest groups who wanted government to stay away from the issue. The CIO resigned in frustration. The current head of HHS, Alex Azar, is saying all the right things but is also having trouble getting past the special interest groups. The bottom line is government has been completely ineffective in solving the healthcare data and related cost problems. Now it is time to see what the tech giants can do.
I am optimistic the promise made by the companies mentioned above will be successful. There are a number of reasons for my optimism. First is healthcare cost has risen out of control to the point where it is nearly 20% of the economy. The tech companies are not startups. They have hundreds of billions in revenue and millions of employees which cost the companies billions of dollars for healthcare. They are motivated to solve the healthcare problem. The second reason for my optimism is technology. Cloud computing and AI have risen like a rocket ship. I believe they will be able to bridge the silos and make data access easier for all. Apple, for example, is making great strides to incorporate EHR data into its Health app.
Security technology has evolved to provide anonymity and protection of the data. Equifax and others have shown their incompetence in this regard, but the tech giants know how to do it. Lastly, mobile technology has advanced rapidly. With fingerprints and faceprints, they offer strong authentication. Mobile apps are easier to use. Banks, travel companies, food services, and many other segments have developed mobile apps which are easy to use and way better than their websites, except in healthcare. I expect Atul Gawande, CEO of the new Amazon/JP Morgan/Berkshire Hathaway healthcare company, Haven, to become a shining light to help rally all the tech companies to work together. They are fierce competitors, but the motivation to solve the healthcare cost problem is huge.
The Wall Street Journal said, “The Trump administration sees better use of health-care data as a key to unlocking savings and holding down costs while improving outcomes.” Seema Verma, Administrator of the Centers for Medicare and Medicaid Services, said, “We want to lean into technology and use it as a potent force to create more efficiencies in our system.” I believe the tech giants will help make this happen.
Another reason for my optimism is Atul Gawande. I first met Atul in 2012 at an event in New York held by The New Yorker. He gave a brilliant and inspiring talk. I have read all his books and follow him on Twitter. He is an incredible physician with superb communications skills. The following are the guiding principles Dr. Gawande stated for Haven:
- We will be an advocate for the patient and an ally to anyone — clinicians, industry leaders, innovators, policymakers, and others — who makes patient care and costs better.
- We will create new solutions and work to change systems, technologies, contracts, policy, and whatever else is in the way of better health care.
- We will be relentless. We will ensure our work has high impact and is sustainable. And we are committed to doing this work for the long-term.
Most of the politicians talk about healthcare coverage, but few talk about healthcare quality and cost, which are the real problems, especially cost. Congress continues to stand in the way of addressing the cost problem. Haven has the right vision and I believe others will join the effort.
My reflections – 2022
I was dead wrong on this one. Haven was basically a tops down approach. It turned out the power of the healthcare lobbies for special interest groups was more than even Amazon and its two partners could break through. However, there are reasons to expect progress from new approaches now underway by Amazon and Apple. Both have developed bottoms up strategies built around the consumer. A few words about each follow.
Yesterday, I saw my family doctor for a routine checkup. He prescribed a new medication for me from his laptop to Amazon Pharmacy. When I got home, an email invited me to complete the order. I put the item in my Amazon Pharmacy cart and headed to checkout. The price for the medication using my Aetna prescription drug insurance was $6.90. The other option shown in the cart was an 80% Prime discount. I paid $1.40 for the medication with free shipping and delivery in two days. Congress has banned Medicare from negotiating the cost of drugs, but Congress cannot prevent Amazon from negotiating directly with drug manufacturers. The combination of consumer demand plus Amazon’s bargaining power will drive a wedge in the corrupt overpriced drug distribution system we have been living with and which has bankrupted families.
Amazon is going after the low hanging fruit of high cost healthcare in America and providing consumer oriented solutions. Amazon Pharmacy is just the beginning. There is much more to come. “Alexa, get me a telehealth appointment.” In a hospital room, “Alexa, tell the nurse I need a pillow.” Amazon is going to help healthcare providers improve healthcare patient satisfaction in ways the healthcare system has not been able to do.
The uniform dislike of EHRs is another issue which has struggled to be resolved on a tops down basis. Apple took a consumer approach. The Apple Health app is built into every iPhone. It is part of iOS, not something you have to the app store to get. In the app you can link your healthcare provider, not yet all of them, but many. If you can a blood test or have a surgery at any of the providers you have linked, you can browse the information on your iPhone. It is far easier than trying to navigate an EHR portal of a provider. The new medication I mentioned in the preceding paragraph has not arrived yet, but it already appears in the Medications section of the Health app.