SCOTT GALLOWAY: Amazon has everything it needs to revolutionize healthcare. Here's how Jeff Bezos will do it.

0
14

Jeff Bezos As Amazon spends billions to “vaccinate” its supply chain, Scott Galloway says healthcare is the next obvious space for Jeff Bezos to take on.

  • Scott Galloway is a bestselling author, entrepreneur, and professor of marketing at NYU Stern. The following is an excerpt from his new book, “POST CORONA: From Crisis to Opportunity.
  • In it, he shares why Amazon is uniquely positioned to take on one of the hardest issues to tackle: healthcare. 
  • With its “vaccinated” supply chain and massive collection of data, Galloway believes Amazon can tackle several health-related spaces, including insurance, financial costs, and platform innovation.
  • “Bezos’s decision to spend billions to ensure the safety of his supply chain stems from a vision that’s obvious only after being crazy/genius,” Galloway writes. 
  • Visit Business Insider’s homepage for more stories.

Amazon seized the pandemic opportunity. At the outset of the company’s May 2020 earnings call, Jeff Bezos warned shareholders they “may want to take a seat.”

He has done this several times.

“This” is snatching profits from the jaws of shareholders to reinvest in the firm. With the exception of Netflix, no firm has been given this much runway. Bezos has used every foot of it to set aloft a vessel that nobody will likely catch. Imagine a Spruce Goose but at twice the speed of sound.

NM_Spruce_Goose scott galloway

Bezos told investors that the $4 billion in profits they were expecting would be reinvested. The investment had a theme: COVID-19.

Specifically, Bezos outlined a vision for at-home COVID tests, plasma donors, PPE equipment, distancing, additional compensation, and protocols to adapt to a new world. Amazon is developing the earth’s first “vaccinated” supply chain.

Read more: Jeff Bezos just turned 56. Here’s how his leadership style propelled him to become one of the richest men in the world — and what you can learn from it.

Great strategy cuts a swath between market conditions and a firm’s assets. Put more simply, strategy is a firm’s answer to the following question:

What can we do that is really hard?

I believe Amazon will offer Prime members testing at a scale and efficiency that makes America feel like South Korea (competent). The “vaccinated” supply chain, as tested and safe as possible, will create a more muscular and immune fulfillment organism, offering stakeholders paramount value — real and perceived.

post corona cover front “Post Corona: From Crisis to Opportunity,” by Scott Galloway.

Leadership is the ability to convince people to work together in pursuit of a common goal. Bezos’s decision to spend billions to ensure the safety of his supply chain stems from a vision that’s obvious only after being crazy/genius.

The big payoff for Amazon is healthcare.

Here too, the pandemic has accelerated the company’s inevitable move into this space. One of Amazon’s core skills is that it sits on a massive collection of data, and it uses that to pick off the profitable parts of a business and farm out the less attractive elements.

There are a few places Amazon can go with healthcare.

First is likely insurance. As we saw with Lemonade’s spectacular IPO in July 2020, there is a disruption opportunity in the insurance field. Consumers by and large dislike and distrust insurance companies, and for good reason. It’s a bloated industry, protected by inefficient state regulatory schemes and entrenched relationships. That’s fat and slow prey for the business world’s apex predator.

Amazon knows a great deal about its best customers: what do they eat, do they buy exercise equipment or video games, do they have children, and are they in a relationship. Between Amazon and Whole Foods purchases, the Amazon card, and all the “pay with Amazon” merchants, the company has vastly more individualized data than any insurance actuary.

And with more and more people working in the gig economy or as long-term freelancers, more and more people are responsible for their own health insurance. If you are one of them, don’t be surprised to hear your Alexa ask, “Are you interested in saving 25% on your health insurance?” CFOs can expect a call from a Bezos lieutenant offering the same deal across their employee base.

Read more: I was a health-insurance exec for 20 years and shamefully lied to Americans about the drawbacks of a single-payer system. I’m coming clean amid the disastrous response to the pandemic.

But that’s just the beginning.

Amazon is well positioned to address the financial cost of healthcare, and better positioned to reduce the non-financial costs — time, effort, and anxiety.

Your son has a rash, and you ask Alexa to connect you with a dermatologist, who asks you to hold up his arm to the intelligent camera. The dermatologist is likely not an Amazon employee, because that part of the business doesn’t scale. Instead she pays a percentage of her revenues to “Prime Health,” what I think Amazon might call the most robust, liquid remote healthcare platform on the planet.

A depth of specialists and reviews sitting beneath the second most-used search engine helps Prime Health members get to just the right physician, right now, at lower cost. The platform is fully integrated with the retail platform, resulting in a more “holistic” approach to healthcare. You don’t have to do anything but log on, and the Prime dermatologist has instant access to your kid’s medical records, as the Seattle firm has invested the necessary capital to make its systems HIPAA compliant.

Prime Health would also have a 3-D scan of his body and recent readings of his vital signs through Halo, Amazon’s fitness wearable announced August 2020. A prescription is sent to Amazon-owned pharmacy PillPack, which delivers the steroid cream by Amazon Fulfillment, and (in the largest metros) it arrives within the hour. If the doctor wants a blood test, a home test kit is in the package as well, or a urine jar, a DNA swab (but why not just make that part of the Prime Health onboarding?), or a hundred other diagnostic devices that Amazon has invested billions to develop.

Read more: Experts predict final-mile challenges will make or break retailers this year, so many are turning to third-party delivery services or acquiring their own tech

The source of this firepower (cheap capital) will arrive on the day they announce a healthcare service, and the stock increases over $100 billion that trading day.

None of this is new, at least in the minds of futurists and science fiction writers. But the barriers of capital cost, regulation, and entrenched special interest have been immovable objects. The pandemic swept them aside in weeks.

In spring 2020, doctors across the country were seeing patients in online sessions and being reimbursed by Medicare and private insurance companies — something that had required onerous special licensing requirements just weeks earlier. Doctors have seen firsthand the benefits for their patients: fewer cancelled appointments and increased efficiency. And of course, no capital investment is out of reach for big tech.

Excerpted from “POST CORONA: From Crisis to Opportunity” by Scott Galloway, in agreement with Portfolio, an imprint of Penguin Publishing Group, a division of Penguin Random House LLC. Copyright © Scott Galloway, 2020.

scott galloway color Scott Galloway will keynote Insider’s virtual event on the future of education

Scott Galloway is the New York Times bestselling author of “The Four” and “The Algebra of Happiness” and a professor at New York University’s Stern School of Business. A serial entrepreneur, he has founded nine firms, including L2, Red Envelope, and Section4. He is host of “The Prof G Show” and of “Pivot,” with Kara Swisher.

A Global Asset Management Seoul Korea Magazine

This post was originally published on this site