Amazon’s entry into healthcare raises fascinating questions: What’s the company’s end game? What will healthcare look like when the iPhone becomes a medical device with telehealth apps and virtual care platforms?

As a health tech investor and consultant, I’ve spoken with countless startups trying to disrupt healthcare. Most of them fail. Why? Healthcare is complex. Large incumbents are hard to dislodge. Misaligned incentives hinder collaboration among different players. Most startups lack the resources to scale efficiently.

Amazon is different. The company made business history by shattering old models for retail, storage and computing. Now their sights are set on healthcare. I wouldn’t bet against them.

Making a Healthcare Marketplace

Let’s dispel one misconception: This isn’t just about the 1.2 million employees at Amazon and its partners Berkshire Hathaway and JP Morgan. These employees are best seen as beta-testers for Amazon’s new healthcare offering.

We can expect Amazon to follow the same model it’s used in other industries it now dominates: Build the ultimate marketplace to aggregate consumers and suppliers.

Look for Amazon to create a digital interface for employees to access basic healthcare needs like doctor’s appointments and prescriptions. This will likely evolve into a marketplace where healthcare providers, pharmaceutical benefits managers (PBMs), insurance administrators, and pharmacies compete to serve employees.

Once this marketplace is up and running, Amazon can offer its health interface to every employer in America, from Fortune 500s to small and medium size businesses. If they’re able to aggregate enough healthcare demand (employees), you can bet healthcare providers will come on board, too.

Healthcare providers

Providers will sign up for Amazon Health because 1) it’ll be the best place to connect with patients and 2) current hospital IT systems are abysmal.

Anyone who’s worked in a hospital knows electronic medical records (EMRs) are a nightmare. Doctors and nurses hate them. There’s a huge demand for new software to improve workflow, allowing providers to spend less time on paperwork and more time with patients.

Amazon Health could offer healthcare systems a next-generation EMR they actually like. Amazon could give this software to hospitals for free in exchange for managing all the transactions that occur through their system. In the arms race for patient health data, this would give Amazon a huge advantage.

What kind of game-changing features could Amazon Health offer hospitals?

Voice recognition and natural language processing (NLP) tools to save providers time entering patient info. Workflow support for all disease types and medical specialties woven into a single EMR platform. Clinical decision support tools built on a robust, up-to-date clinical trial database. And it all needs to be cloud-based, fast and reliable.

Building sophisticated, cloud-based software that can be deployed at scale: This is where Amazon excels, and where it’s primed to disrupt healthcare.


It’s no surprise the biggest online retailer wants a piece of the $560 billion prescription drug business. In October 2017 Amazon acquired wholesale pharmacy licenses in at least a dozen states. They reportedly have 200+ people employed on retail pharma operations.

Amazon can use its broad distribution network (including Whole Foods) to enable immediate delivery of certain prescriptions along with one’s groceries. The company can use its expanding retail footprint to give customers basic health services like those offered at CVS MinuteClinic.

Here’s one scenario: Amazon tells Prime users they have to use Amazon as their pharmacy instead of Rite-Aid or CVS. Within 24 months Amazon controls 50% of the retail pharmacy market. They partner with the PBM industry, initially. Eventually, they destroy the PBM industry and bring pricing transparency to pharmaceuticals, resulting in lower drug prices.

Alexa Health

Today, Alexa’s voice interface can tell you sports scores and showtimes. Tomorrow, it’ll tell you how many calories you consumed, your sleep quality and anxiety level.

Voice-based “healthbots” will replace the physician as your first point of contact with the healthcare system. It’ll be the first place you go when you have a fever or a worrisome mole.

Alexa will collect patient-generated data from sensors and wearables. This data will feed into hospital EMRs and give personalized advice on your health and treatment options – much the way Amazon’s home page recommends books and kitchen products. The healthbot will monitor your condition in real-time and switch out to a doctor or nurse when it detects a problem.

Preventive health will become a much bigger part of healthcare driven by wearable health devices and remote monitoring systems. We’ll have multivariable wearables that generate clinical-grade health data – blood pressure, heart rate variability, SpO2, ECG analytics, A-fib detection.

These continuous monitoring systems could enable new, hybrid vital signs that assess your overall health across multiple factors– a “medical FICO score” or “check-engine light.”

Amazon may partner with startups like Forward Health that are trying to shift healthcare from reactive care procedures, to proactive care through the use of AI and wearable sensors. The vision is that the home will become an extension of the hospital, enabling on-demand access to healthcare services.

Toward a New Health Paradigm

The future of healthcare revolves around data – genetic data, medical data, lifestyle and environmental data. Few companies know more about data than Amazon. Its predictive analytics engine knows what you want to buy before you do. Its AWS business powers a wide swath of the internet economy.

Amazon can bring its massive AI and computing resources to the biggest opportunities in digital health: hyper-personalization, AI and machine learning for diagnostics and treatment, telehealth and mobile platforms that are reinventing the house call, and “digital therapeutics” for chronic disease. It’s a trillion-dollar opportunity.

Our healthcare system needs tech innovation to serve the needs of a US population that’s expanding and getting sicker. Nearly half the country is diabetic or pre-diabetic. As one digital health leader told me, software isn’t an adjunct therapy - it’s the ONLY way we can scale healthcare to treat growing challenges in diabetes, cancer and mental health.

Will Amazon one day dominate healthcare the way they dominate retail? Who knows. Are there concerns related to health record privacy and Amazon’s monopoly power? Of course.

Yet one thing is clear: US healthcare is on life support. The way we access healthcare services and products needs to be reinvented from the ground up. If any one company can define a new paradigm for healthcare, it’s Amazon.