The 8 Steps to Amazon Entering the Health Care Market

DJ Wilson | State of Reform | September 11, 2017

This is a thought experiment:  What if Amazon really wanted to go all in in the health care sector? What might that look like? What would their strategy be? Where could they deliver value? Amazon looks for industries that are not sensitive to the customer, that have profits or premium pricing based on barriers to entry (often capital related), and looks to exploit those opportunities. It’s pretty straight forward. And, whether that industry is cloud storage space or groceries or “last mile” distribution networks, Amazon is thinking about it.

They didn’t go from 32,000 employees 5 years ago to almost 500,000 today by sticking with books. This thought exercise is based on off the record conversations with a number of folks: brokers, health plan executives, tech company leaders, and a few folks at Amazon.  I didn’t want to put anyone on the record. That’s not important for the purposes of this exercise.  All of this is produced below from open source content. Here goes. Amazon decides to enter the health care business. How do they bring value?

First, they start with insurance. Amazon already provides health insurance benefits to over 400,000 employees: 390,000 or so at Amazon, and 90,000 or so at Whole Foods. They also cover some number of employee dependents. I have no idea what that is, but given the relatively rich benefits provided to employees, let’s imagine it’s a modest 1:1 ratio – or one employee dependent for every employee...