Amazon strikes fear into legacy health players

By Albert DiPiero MD MPH

In court proceeds UnitedHealth is suing a former executive for breach of a non-compete agreement and claiming he took with him confidential documents when he jumped to the new Amazon-Berkshire Hathaway-JP Morgan Chase (ABJ) health venture. But what is really happening here? As these articles reveal, some suspect that United is using the court to try to pry into the future plans of ABJ. Underlying all of this is a deep fear: legacy players in healthcare - such as United and its Optum division - are massive businesses and yet they feel incredibly vulnerable to technology powered consumer brands such as Amazon. As they should. Here are some key reasons: Optum runs a PBM and other businesses with $100 Billion in annual revenue last year! Yet…

“Optum is vulnerable because its customers — particularly employers — have little insight into its businesses….”“It is truly the most opaque of all black boxes in health care,” Mr. Turpin said. He added, “Amazon is lying in the grass and will someday pop up and do something disruptive around pharmacy.”

(And maybe even direct clinical care).

Meanwhile, ABJ says it will not be “profit-seeking” and it is focused on addressing the needs of its 1.2 million employees. But executives for ABJ would not promise that they would never complete with Optum or other established players in healthcare.

The current established companies in healthcare have no emotional connection to real customers, deliver no meaningful experiences and receive no love. This is the secret path to entrepreneur success in healthcare. You don’t need the bankroll of ABJ (thought that helps!). Start with a unique insight about the customer and go where the established companies will not dare to go, focusing on genuine experiences, emotional connections, and indispensable services for identifiable customers.

Read NYT: Clash of Giants: UnitedHealth Takes On Amazon, Berkshire Hathaway and JPMorgan Chase

Read WSJ: New Details on Amazon, Berkshire Hathaway, JPMorgan Health Venture Emerge in Court Battle

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