3.9 billion dollars, this is what the e-commerce giant Amazon has spent to afford the One Medical care network. A diversification that may surprise as it seems far from the core business of the group, better known for its ability to quickly deliver consumer products. However, this takeover is part of a health diversification strategy adopted by a growing number of tech players. Insight from Pierre Harand, partner and Europe-Asia director of the fifty-five consulting firm.
L’Express: Amazon has just spent nearly $4 billion to buy the One Medical care network. Where does the enthusiasm of many tech giants (Amazon, Apple, Google, etc.) come from for the health sector, yet quite far from their core business?
Pierre Harand: It is related to several factors. These groups see that healthcare is an important sector that generates substantial revenues, but which has not yet truly achieved its digital transformation. Access to care and the quality of health services are still largely perfectible. There are problems with medical deserts, excessively long waits in the office or in the emergency room. As it is about our health, we are patient, but if we observe this with a very “business” perspective, the quality of service is not there. And it could be vastly improved by technology, with telemedicine and artificial intelligence. Hence the interest of tech giants in this sector. They understood that healthcare was a sector ripe for disruption.
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This is not the first milestone that Amazon has taken in health, what logic connects the group’s various initiatives in the sector? What is he trying to build?
The acquisition of One Medical may surprise in France, because we do not necessarily see all that Amazon has developed in this field in the United States, but this acquisition is very consistent with their previous initiatives. Amazon has already launched an online pharmacy in the United States, which makes sense given its expertise in e-commerce. More recently, the group developed Amazon Care, a service allowing medical appointments to be made by video or physical, initially intended for its employees, but which it has since gradually opened up to other companies. Here we find the logic that the group had with its offer of AWS cloud services and products. Initially, AWS was created for Amazon’s internal needs, but the firm gradually extended it and offered it to other companies. Today, it is a cloud giant.
“The main challenge for the group will be its ability to internationalize its health offer”
One Medical will significantly accelerate the development of Amazon Care. With this takeover, Amazon strikes a blow in health, it shows that it is confident in its ability to transform the sector. Its expertise in e-commerce will help it offer a better quality of service. Amazon Care, for example, tells patients in real time the estimated time of arrival of their doctor at home, like an Uber.
Health remains a complex sector and far from what Amazon has been doing until now. What challenges is the group likely to face?
The acquisition of One Medical suggests that Amazon is having some success in the United States. The main challenge for the group will be its ability to internationalize its healthcare offer. France, for example, has a very different reimbursement system from that of the United States, it would not be possible to offer exactly the same system here as there. Not to mention that there is the thorny issue of data protection, which is a strategic subject for European citizens and regulators, especially when they affect a subject as sensitive as people’s health. In France, the use of Microsoft’s American cloud for the Health Data Hub has sparked heated controversy. If a giant like Amazon offers to transfer medical data from French citizens, this will certainly raise many questions. In addition, internationally, Amazon will sometimes find itself facing strong local competitors. In France, Doctolib is for example very well established, it will not be easy to outrun, even if Amazon could be tempted to differentiate itself with more controversial options, such as the rating of practitioners that Doctolib refuses to explore.
In the longer term, we will have to see to what extent Amazon manages to develop health offers using artificial intelligence. Use the Alexa assistant, for example, to ask the person questions in order to establish a diagnosis or a pre-diagnosis. This will improve prioritization of care. In other areas, we see that artificial intelligence (AI) is revolutionizing the sector. Some Google AIs manage to detect cancer cells on medical imaging more effectively than the most experienced oncologists. But the use of artificial intelligence will raise regulatory challenges – in which cases to rely on it to establish a diagnosis, issue a prescription, etc.
Apple, Google and Microsoft are also investing in the health sector. How do these tech giants stack up against each other? Are they developing competing offers?
Amazon focuses on access to health services, Google on medical artificial intelligence, Microsoft on the supply of technical infrastructures adapted to the needs of the sector (secure cloud, etc.) while Apple has a strategy very focused on hardware, with its Apple Watch connected watches capable of tracking various health constants. They all approach the sector at different levels. But in the long term, it will certainly converge, which will put them in more head-on competition.
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Which tech giants are best positioned to succeed in healthcare?
Data will be the key success factor. Groups that have health data will be able to develop better services. If Amazon manages to convince enough companies to subscribe to its Amazon Care offer, which it will extend with One Medical, it will have a very solid base of data to develop. The other group that seems very well placed in this race is Apple. His connected watches give him many health statistics with which he can educate medical AIs.
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