What is Amazon going to do in 2023?
. Today, a story about what's next for Amazon Healthcare.
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All right. I found a thoughtful LinkedIn article, Andy. Let's see. Mish Kovski, M Y C H K O V S K Y, healthcare solopreneur. And he writes a healthcare under healthcare. Andy, and this one was interesting, so I thought I'd share it with you. What's next for Amazon? He. , he said over the year, and I like this for a couple reasons.
One is, has a really cool little history in here with links to all the stories of Amazon Care. , it sort of sets the foundation for the experiments and then he has three potential acquisitions for Amazon. Again, I thought it was, I thought it was an interesting read. Just something to consider. And here it goes.
Over the years, , novels have been written about Amazon's potential to disrupt healthcare. Only time will tell if those stories become fact or fiction. The 4.2 trillion healthcare industry is speculated to become the fourth pillar of Amazon along with prime aws, cloud and marketplace. At close to 20% of gdp, healthcare seems like too large an industry to avoid.
Most pure tech companies have avoided low margin care delivery, but Amazon is different and they are different. , before we discuss the future, it's important to study the past. Let's take a walk down memory lane regarding Amazon and the healthcare industry. And this is where a lot of health system leaders.
Get stuck. They say, oh, they've done all these things and they failed. Clearly they don't know what they're doing. , really not understanding the DNA of Amazon. All right. 2017 Amazon launches a secret healthcare team, team 1492 to explore areas for Amazon to enter i e EMRs, telemedicine apps like Alexa, et cetera.
2018 Amazon acquires online pharmacy PillPack and joins forces with Berkshire Hathaway. To disrupt healthcare through an entity called Haven. We all remember that failure. 2019 Amazon unveils Amazon Care, a telemedicine platform. It is set to go live next year for Seattle-based employees. That's 2019, , and we know what happens there.
2020 Amazon launches a wearable unrest device called Halo that measures activity, temperature, and heart rate goal. To ingest live metrics and provide actionable recommendations. Again, great goal, , 2021, Amazon, Berkshire Hathaway, and Chase shut down Haven. Instead, Amazon expands Amazon care and launches a $19 a month subscription for Alexa.
Together a 24 7 emergency helpline for seniors. All right, and then 2022, Amazon shuts down Amazon care, but acquires one medical for 3.9. Fails to acquire signify health and launches Amazon Clinic to tackle mail order pharmacy for cash pay generic drugs. They have a link to all those stories. 2023, he just asked question mark, question mark, question mark, and we know there will be experimentation.
Why? And he goes on and he says, experimentation is the DNA of Amazon Healthcare Insiders, Mike Ron. But there's no denying they have the cash and patients to continuously invest until even. Cracking the code. We can debate if that would lead to a better outcome or not. Read this excerpt from Jeff, Jeff Bezos's, 2018 Letter to shareholders.
, interesting quote, by the way, as a company grows, everything needs to scale including the size of your failed experiments. . If the size of your failures isn't growing, you're not going to be investing at a size that can actually move the needle. Amazon will be experimenting at the right scale for a company of our size.
If we occasionally have multi-billion dollar failures, of course we won't undertake such experiments. Cavalier cavalierly. . Yeah, that's a hard word to say. We will work hard to make them good bets, but not all good bets will ultimately pay out. So that's the foundation. They will continue to make bets. It's part of their dna, it's part of their heritage.
And so now given the history of experimentation, he says, let's make some predictions. Looking into the 50 cent crystal ball, here's three healthcare companies that Amazon could acquire. Okay, Everly Health companies like Everly Health, formerly Everly, well have helped democratize cash pay at home lab testing, having raised 325 million.
The company was most recently valued at 2.9 billion. That's certainly a big experiment, but lab testing feels like a natural extension for Amazon clinics. Online pharmacy. It's important to note that Amazon launched their own Covid 19 testing lab in Kentucky, processing millions of Covid 19 tests since 2020, but shut down operations in 2022.
Maybe they've evaluated the opportunity and crossed it off the list, but I suspect not. , I don't. Well, anyway, I could come back to what I think about each one of these Matrix Health Matrix Health Network Amazon attempted to acquire, signify. And there reported 10,000 Clinician Network, eventually bought by CVS four 8 billion.
And since signify Health shut down their bundled payment division, home care was the focus, especially home risk assessments. That's where Matrix Health Network comes into play. Matrix reports, having 5,000 clinicians in their network and recently partnered with Crossover Health to offer joint primary care and occupational.
Crossover Health and Amazon have a past, and if Amazon doesn't buy them, I bet someone else will. And then he, he closes it out with DOT go. We know Amazon likes logistics. We also know Amazon owns assets for telemedicine, pharmacy, brick and mortar, primary care. What's the opposite of primary care? Mobile emergency care.
That's dot go. They just announced a small pilot with Dollar General. And have a few hospital partnerships. Mobile clinics are complimentary to one medical's offices. The market cap hovers around 950 million, so it could be a one to 2 billion acquisition PRI price tag. And although not the same model as signify health, it aligns with future home-based strategy.
There you have it. Those are his ideas. , you can sign firstname.lastname@example.org. All right, so let me give you my, so one. . I think in order to understand where Amazon's going next, you have to look at their history and you also have to, , look at their leadership and understand where they're going to be going.
And, you know, the, the battle, and we've talked about this earlier this year, the battle, especially with the CVS acquisitions and whatnot, the battle is for primary. Right, so they're betting on the fact that the model for care is going to change, and every health system leader I talk to understands that the model for care is going to change if the costs continue at this pace.
We can't afford to offer care in the same way we have for the past. 50 years. It has to adjust. It has to change. We also know that there needs to be a push towards health and not healthcare or sick care as it's referred to. Right. So more and more they, these organizations, we'll call 'em the the big five, the Walgreens, Walmart, opt.
CVS and Amazon are building out networks of doctors, massive networks of doctors, right? Because they want to push care more towards health, and they wanna push it more towards where the patient lives. They want more touchpoints, they want more touch points than what? More interactions because it, it does drive their other revenue.
right. , these organizations more than the others, publicly traded companies are looking to make a profit from healthcare. Again, not the worst thing in the world. They are doing it in a competitive world. They are, , doing it by listening to the consumer and trying to offer services that are aligned to the consumer.
We will, you know, we'll have to keep an eye on it as to whether it does actually improve outcomes and whatnot, but as they push towards health keeping, Healthy, they want. , more interactions with the consumer. They want more sensors on the consumer. They want to push into their home and interact with them in their home.
Again, more touchpoints, , more interaction towards health, and that requires a significant base of clinicians, especially if you're gonna do this at scale and scale. Being on a national. , and again, we're only talking about the US marketplace right now, and that's what they are looking to do. , they are looking to change the way you and I as patients, not as , employees of healthcare organizations.
You and I as patients interact with health, more transparency, more touchpoints, , more information on our health, more, , actions or nudges, , based on data science, based on the, , delivery of that information back to us in a consumer friendly way. , you know, e essentially helping us to live the lives. we want to live, right? So they are building out something that we actually want.
And so, you know, which, which of these acquisitions, , which one gets 'em to most doctors? Which one gets 'em into the home? Which one gets 'em more touchpoints? , I'm not sure the lab one really makes sense to me. I mean, I, it could, but again, you're talking about a commodity item. There's labs everywhere.
If lab's gonna take off in the home, maybe they head in that direction. I'm not sure I see that. , matrix. , , heading in that direction. , home care and home risk assessments, 5,000 clinicians. That one makes more sense to me. I could see that one happening. , emergency care, again, I, I mean, if, if you're talking about, , higher margin, ACU or higher margin care, , and, , and, and a push towards.
towards health and not healthcare. I think the acquisition makes sense. This is why I, I'm not sure the doco really aligns. , well, the other thing to keep in mind is rural healthcare. Rural healthcare is under siege. They, you know, if the hospitals in the major markets are not making money, the hospitals in the rural health systems are fighting for their lives.
So you're gonna have a gap that starts to widen, , in, in the rural setting, and somebody's gonna come in and fill that gap. That's what always happens. , so don't, you know, don't worry too much. There will be a timeframe where it's a critical issue and there's gonna be, , you know, issues that happen that, that are avoidable if, if the status quo was maintained.
However, over time, If there's a need, something will come into that. And I think with what's going on in rural healthcare, you're gonna see this, , pilot, like Dollar General. You're gonna see Walmart really, , excel in that space. CVS will likely excel in that space. Walgreens may or may not excel in that space.
, but Amazon with their reach, their logistics. Can really excel in that space. They can own that space because they, they don't do it with brick and mortar. They do it with technology and logistics and it scales, right? So unlike other healthcare organizations, they know how to scale those kinds of things.
So what's next for Amazon Healthcare? . Growing, , their offerings around health, growing their touchpoints with consumers, growing their, , base of physicians so that they can continue that push into healthcare. And that's the battle. There's gonna be, , major physician groups move into those top five players and move away from healthcare systems.
And, , as that continues to happen, that. , you know, be a major shift in how healthcare is delivered in the us.
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