Amazon's health-care ambitions shouldn't be underestimated, says industry veteran

By | October 28, 2018

Gary Gottlieb is in a prime spot to see how technology companies are shaking up health care.

Apple and Amazon are plotting in the medical space, ranging from breakthrough medical devices to mail-order pharmacies.

On a recent earnings call, Walgreens CEO Stefano Pessina summed up this position, telling analysts that Amazon has many “opportunities around the world and in other categories, which are much, much simpler than health care.” In other words, Amazon will probably do a lot of other things before diving into the complex world of health care.

But Amazon has shown that it can do many things at once, and it’s not afraid to take on low-margin industries with established incumbents. Health industry executives can no longer rely on complexity as being the significant barrier to entry.

“It’s a defense that health care has used for why we haven’t created the kinds of improvements or solutions in information technologies that you see in other industries, like airlines and banking,” said Gottlieb, who is also chair of the Federal Reserve Bank of Boston.

Health-care spending in the U.S. has climbed to $ 3.5 trillion a year, and Gottlieb said there are countless “dysfunctions” that tech companies could tackle and ways they can add value. One example, Gottlieb said, is developing cybersecurity tools that health systems can use to better protect patients against ransomware attacks and other breaches of their medical data.

Another is improving transparency around health-care payments, and he’s also optimistic about the potential for machine learning when applied to health care data, although there are still major barriers to accessing it.

Gottlieb said that tech companies will need to recruit leaders with a lot of experience in health care, including clinicians who are actively treating patients. They also need to team up with smaller clinics, qualified health centers, and policymakers, not just the big hospital executives.

“I hope they make the effort to ensure the poor and the sick get their care too,” Gottlieb said.

Correction: A previous version of this story mistakenly said that Gottlieb has spent the past three years in venture capital. While he works in an advisory role for a venture firm, his job is CEO of Partners in Health, a global health care organization.

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