Do you know for whom the the bell tolls? I’ll cut to the answer: it’s healthcare companies. Yes, all of them.
The long-overdue announcement from Berkshire, JPMorgan, and not least of all Amazon has sent healthcare company stocks in the U.S. down sharply. And no wonder, given the history of the “Amazon Effect.” Once our friends in Seattle decide they want to “Prime-ify” an industry, incumbents start to sweat (see: auto parts, diapers, electronics…the list goes on).
You can see/marvel at what is being brought to the table here: Amazon creating the great digital experience + tech infrastructure; Berkshire providing elder statesman leadership and by all accounts a “mad-as-hell-and-not-going-to-take-it-anymore” attitude towards healthcare costs, and JPMorgan providing plenty of capital for the effort. Combine this with a potential dogfooding the principals bring (combined, in excess of 1.1 million employees – to say nothing of their families or dependents; Amazon 541K employees; JPMC 234K, Berkshire 368K). As to the report that the new entity will be “free from profit-making incentives and constraints,”: well, we’ll see about that…
But, you say, healthcare is too complicated/intrenched/(pick a qualifier) for “BAJ Health”to make a difference. I say scale has never been seen as a problem for these folks. So, incumbents, I’d start to get nervous if I were you.
Forward thinking leaders will get over their jitters quickly though – if they have a plan, and to be blunt, only if they are willing to admit their failings, principally that they have simply not kept pace with the consumers of their services, especially managing expectations of customer experience. So, I’d offer the following to my board if I was that type of leader at a healthcare company:
The good news? In my 20+ years working in professional services and frequently with healthcare providers leads me to believe that you can make the transition. The end-state of this transition if that you “Amazon yourself” you will be creating great digital experiences and keep the business you’ve worked so hard for.
The bell is ringing, O you healthcare providers. Avoid answering at your own peril.
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This post was originally published via LinkedIn Pulse.