Next on Amazon’s list of industries to disrupt: health care.
The ecommerce giant announced a new venture with Warren Buffet’s Berkshire Hathaway and JPMorgan Chase to figure out a new health-care solution for their employees. The new company will focus on the effort and be “free from profit-making incentives and constraints.”
Several health-care and retail experts think Amazon moving into health care is the right move—especially in an industry that’s ripe for disruption.
The involvement of each of these three companies is a “testament to the broken health-care system in the US,” said Brendan Gallagher, evp, experience strategy and innovation at Digitas Health.
The US health-care system is in need of some fixing. Though the number of uninsured Americans went down in 2016, there’s still 28.1 million people who don’t have insurance, reports Vox. And then there’s the cost of health care itself, which the current average American spends about $4,000 a year on. Some, like New York Magazine’s Eric Levitz, argue that while the system is broken, it’s not up to private businesses to take it upon themselves to provide the remedy.
The company could usher in a new era of products and innovation at Amazon, said Gallagher, by potentially making its own products after studying what’s working or packaging its health-care plan and offering it to other companies. Considering Amazon Basics is already competing with all sorts of other products, doing the same in pharmaceuticals isn’t such a far-fetched idea.
“Hard as it might be, reducing health care’s burden on the economy while improving outcomes for employees and their families would be worth the effort,” said Jeff Bezos, Amazon CEO in a statement.
The project, which could affect the combined 1.1 million employees at each of these these companies, will change how people think about health care.
“With more health care content available than ever before, the adoption of new technologies and increased use of innovations like wearables, individuals might be more educated, but they are not necessarily more empowered,” said Becky Chidester, CEO of Wunderman Health. “The partnership between Amazon, Berkshire Hathaway and JPMorgan has the potential to truly change this.”
Retail consultant Bruce Winder thinks Amazon may be able to figure out a new model around the pharmacy or distribution of medicine— and would excel at it, considering how the company already approaches that for consumers.
“They’re already well entrenched in the US and already have an incredible system in customer facing [industries] as it relates to both data and online and physical distribution of product,” said Winder. “Now, it’s a natural extension for them to help America and to help themselves in a different way.”
Amazon’s approach to consumers and how it mixes that with data is another game changer. John Nash, CMSO at software marketing company RedPoint Global, said that Amazon sets a high bar when it comes to personalization, adding that personalization has not been the health-care industry’s strong suit. (Take a second to think about your experiences dealing with health-care providers, and you’ll see what he means.)
“This move by Amazon will further spur a shift in thinking for health-care payers and providers,” Nash said. “It will no longer be acceptable to engage with broad segments, as each consumer demands that their specific communication preferences, behaviors and attitudes are acknowledged and respected.”
Though the new venture currently has no CEO, it will be led by three executives from each of the companies.
“The three of our companies have extraordinary resources, and our goal is to create solutions that benefit our US employees, their families, and potentially, all Americans,” said Jamie Dimon, chairman and CEO of JPMorgan Chase, in a statement.
This article originally appeared on Adweek