From The Economist, November 20:
Prime of life
It might be its riskiest business venture yet
AS BIG TECH firms face a brutal slow-down the hunt is on for new areas of expansion. Amazon, which is now America’s second-biggest business by revenue, is a case in point. In the final quarter of 2022 its sales are expected to expand by just 6.7% year-on-year. On November 17th Andy Jassy, its chief executive, confirmed that the firm had begun laying off workers and would fire more next year. He said it was the hardest decision he had made since becoming boss. But he also noted that “big opportunities” lie ahead. One is the largest, most lucrative and hellishly difficult business in America: health care.
Many tech firms have health-care ambitions. Apple tracks well-being through the iPhone. Microsoft offers cloud-computing services to health firms. Alphabet sells wearable devices and is pumping money into biotech research. But Amazon is now creating the most ambitious offering of all. Two days before Mr Jassy’s statement it launched “Amazon Clinic”, an online service operating in 32 states that offers virtual health care for over 20 conditions, from acne to allergies. Amazon describes the service as a virtual storefront that connects users with third-party health providers.
The Amazon Clinic launch follows a $3.9bn takeover, announced in July, of One Medical, a primary-care provider with 790,000 members that offers telehealth services online and bricks-and-mortar clinics (the deal is yet to close). The deal was led by Neil Lindsay, formerly responsible for Prime, Amazon’s subscription service. He has said health care “is high on the list of experiences that need reinvention”.
These latest moves complement Amazon’s existing assets. Its Halo band, a wearable device that went on sale in 2020, monitors the health status of users. In 2018 it bought PillPack, a digital pharmacy that is now part of Amazon Pharmacy, for $753m. Amazon Web Services launched specific cloud services for health-care and life-science companies in 2021.
The move into primary care, jargon for the role of the family doctor, is a big step but a logical one. Walgreens, a pharmacy chain, reckons the industry is worth $1trn a year. Around half of Generation z and millennial Americans do not have a primary-care doctor and One Medical’s membership has almost doubled since 2019. Amazon Clinic will accept cash for its services, rather than relying on America’s nightmarish insurance system to recoup costs....
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There is something very disturbing about the data-mongers seeing “big opportunities” in one's health.
