Amazon is stepping into healthcare

Jeff Bezos

Alexa, make healthcare better. 

Amazon CEO Jeff Bezos is finally publicly stepping into the healthcare industry. Amazon has teamed up with banking giant JPMorgan and holding company Berkshire Hathaway to start a healthcare business, the companies announced on Tuesday. 

Per typical tech company fashion, the initiative’s goal is to disrupt an old industry by providing technological solutions and, in turn, simplify and decrease the expenses of the process for consumers. The new initiative does not have a name or CEO yet, and is being headed by three executives from each participating company. 

“The healthcare system is complex, and we enter into this challenge open-eyed about the degree of difficulty,” Bezos said in a statement. “Hard as it might be, reducing healthcare’s burden on the economy while improving outcomes for employees and their families would be worth the effort.”

Details on how exactly the new healthcare business would work to change the industry were sparse, but the billionaires behind the project have now publicly dedicated themselves to taking on the challenge. 

“We enter into this challenge open-eyed about the degree of difficulty.”

“The ballooning costs of healthcare act as a hungry tapeworm on the American economy. Our group does not come to this problem with answers. But we also do not accept it as inevitable,” Berkshire Hathaway CEO Warren Buffett said in a statement. 

“Rather, we share the belief that putting our collective resources behind the country’s best talent can, in time, check the rise in health costs while concurrently enhancing patient satisfaction and outcomes,” Buffett continued. 

Healthcare isn’t a cheap business, but these partnering companies are some of the richest in the world. The companies have a combined market valuation of $1.6 trillion, Bloomberg reported

For now, they’re focused on launching an independent business that is “free from profit-making incentives and constraints.” When it eventually launches, it will service the more than 1.1 million employees at the three participating companies. 

But if the venture succeeds, it could service more Americans, competing with healthcare companies like Cigna, Aetna, and UnitedHealth. 

As JPMorgan CEO Jamie Dimon said in a statement, “The three of our companies have extraordinary resources, and our goal is to create solutions that benefit our U.S. employees, their families and, potentially, all Americans.”

The joint venture is the type of shakeup that excites some in healthcare as an impetus to force the industry to change. Toward the end of last year, the healthcare industry faced another big shakeup when healthcare insurance company Aetna and pharmacy CVS announced a merger. 

Read more:

Amazons new healthcare company could give smaller healthtech players a boost

JPMorgan Chase and Berkshire Hathaway have joined forces with Amazon to form a new healthcare company for all U.S. employees. Right now details are so sparse there’s not even a name associated with the new company. However, this is big news for the industry, and it could possibly have ramifications not only for health insurance giants, but also smaller tech companies that are open to either partnering with the company — or even being acquired by it.

The decision didn’t come overnight. According to reports, the heads of each company — Jamie Dimon, Warren Buffet and Jeff Bezos — have chatted for years about how to fix the problem of high costs and a broken healthcare system.

“The ballooning costs of healthcare act as a hungry tapeworm on the American economy,” Buffet said in a statement out this morning. “We share the belief that putting our collective resources behind the country’s best talent can, in time, check the rise in health costs while concurrently enhancing patient satisfaction and outcomes.”

But others in tech have tried to jump into healthcare only to get bogged down with regulatory hurdles. Theranos founder Elizabeth Holmes, who did not have a medical background, ran into regulatory issues and was ultimately banned from operating in her own labs due to health and safety concerns.

Google parent company Alphabet is known for dipping its toe in the healthcare waters, with Calico and Verily Life Sciences. However, Google shut down its health management platform Google Health after it failed to gain traction.

“When [tech companies] start to understand the complexity, even just the idea of an electronic health record, they pull out,” says health consultant and CEO of Avalere Health Dan Mendelson.

Bezos has acknowledged the difficulties for tech companies in the space, saying the healthcare system is “complex” and that the three “. . . enter into this challenge open-eyed about the degree of difficulty.”

Companies that have succeeded in healthcare have largely been those with a background in the industry, Mendelson points out. However, the allure to get into the space has fueled plenty of tech company attempts, especially in the last year. Apple recently launched a feature with its iOS update to allow users to upload medical records and Amazon has already been rumored to be in talks with drug makers.

And stronger technological chops is something the industry needs going forward. Amazon is in a position to provide these measures with machine learning, AI, online communications and other tools needed to make a more efficient and effective system. But it will likely need outside help from health experts, and it remains to be seen how these three iconic companies plan to move the ball forward without industry understanding.

Collective Health founder Ali Diab has one, perhaps unsurprising suggestion: that the new company that’s being formed work with Collective Health.

Collective Health offers companies healthcare coverage through a cloud-based, integrated health benefits platform for self-insured employers and, as Diab points out, has been providing that solution for the last five years to large companies like eBay and Restoration Hardware.

“I would suggest they focus exactly on what we are already doing, which is build infrastructure that knits everything together,” Diab says. “It’s not stuff that people see. It’s all the infrastructure to ingest data from various sources, process claims, to make that data analyzable, to build machine learning and AI-based systems on top of it that help identify people that need care way before they might even know.”

JPMorgan Chase, Berkshire Hathaway and Amazon could potentially snap up smaller tech companies like Collective Health that are working on these types of solutions, as well.

“It would not surprise me to see them start to acquire some of the technology that makes their goals possible,” says Mendelson. “This team is very capable from a mergers and acquisitions standpoint. That’s not an accident.”

Read more:

Amazon is quietly challenging all kinds of startups

Amazon is hiring dozens of housekeepers to challenge startups like Handy.
Image: Denver Post via Getty Images

If a consumer startup exists, there’s a good chance Amazon is trying to kill it.

Headlines about the famously aggressive online shopping giant bulldozing through retail categories are nothing new, of course; it seems like every other day brings a new breathless news cycle about the threat it poses to a new industry.

Sometimes lost in the mix, though, are the various ways in which it’s undermining even smaller niche startup markets from housecleaning services to subscription boxes to restaurant delivery

Amazon’s tendrils are growing into nearly every part of the e-commerce tech world. The company is so big that smaller efforts that may seem like an afterthought compared to its larger ambitions have the power to shake up sectors.

That’s in part because these areas tend to be money-burning enterprises that take gobs of venture capital to launch into steady businesses. Yet while startups fight to stay above water, Amazon’s resources mean it has no such concerns.

Here are some of the startups with which Amazon is competing in some form or another:

On-demand cleaning service Handy

Amazon is currently hiring dozens of housekeepers for what appears to be a new home-cleaning service in the works. Amazon says these employees “will be traveling and working in customers’ homes ensuring they return to a sparkling clean environment.”

That proposition could pose a problem for Handy, a startup that also helps people hire on-demand cleaning help. 

Handy has faced legal battles and worker disputes over its gig-economy classification of cleaners as independent contractors. The controversial designation frees the company from paying out benefits and wages that labor laws might otherwise mandate. 

Amazon’s housekeepers, on the other hand, are promised formal employment with the company along with health insurance and stock options. Such terms could not only attract workers away from Handy but also guarantee a level of service without the sort of headline-grabbing bad experiences that have hurt Handy’s reputation.

Amazon could also conceivably bolster the service with various of its other operations. Assuming that customers one day feel comfortable enough to adopt its new Amazon Key home supervision system, it could use those cameras to protect against theft. 

Smart lock startups

Amazon turned heads last month when it announced Amazon Key, a service that would let delivery-people enter customer homes without them there through an advanced lock and camera system.

But the online shopping giant wasn’t the first to offer this idea. The month before the announcement, Walmart penned a deal with smart-lock startup August Home to offer the same sort of scheme.

The difference is that Amazon is instead providing its own hardware and that of approved third parties as part of the installation kit.

Amazon’s customer base is so strong that, provided people overcome their uneasiness with strangers in their house, its services could help it own the market on smart locks in the process of rolling out Amazon Key

While tech-integrated door security is useful for a number of other reasons beyond grocery delivery, Amazon could sell people on it through the program, leaving less demand for the rest of the industry.


Amazon sent Grubhub’s stock plummeting earlier in the fall when it announced its own restaurant delivery business in several major cities.

Grubhub has maintained a dominant spot in the restaurant ordering and delivery market by purchasing its closest rivals in the space. While the company is still integrated into Amazon’s Alexa digital assistant, Amazon’s own service could eventually get an edge through default settings in the system.

Amazon’s not running its restaurant service all by itself, however. The operation is powered by ordering tech startup Olo and benefits from that company’s long list of clients.

Subscription box services

A few of Amazon’s subscription box packages.

Image: amazon

Amazon has quietly rolled out a program called Prime Samples that offers assortment packs of everything from dog treats to toiletries to coffee and tea.

While the offering is flying under the radar for now, it could one day challenge the recent proliferation of e-commerce startups built around the idea of regular curated collections of products: Birchbox, Harry’s razors, and hundreds of others.

Unlike those companies, Prime Samples aren’t explicitly offered in regular recurring shipments, though one could easily set orders to repeat through Amazon’s purchasing options.

Blue Apron

Amazon helped spoil Blue Apron’s stock market debut this summer after its blockbuster Whole Foods deal spooked investors.

But it didn’t stop there. Not long after the DIY meal service hit the trading floor, Amazon launched its own meal kits to compete head on with the startup.

Amazon’s version of Blue Apron’s service launched with little fanfare and it’s not clear how much it’s grown in the three months since. But the mere fact that Amazon is interested in the market has been enough to damage the startup’s stock, along with the other more fundamental flaws in its business plan. 

Every editorial product is independently selected by Mashable journalists. If you buy something featured, we may earn an affiliate commission which helps support our journalism.

Read more: