The tech industry is tackling healthcare. Recently, corporate giants Amazon, Berkshire Hathaway, and JPMorgan Chase announced that they will be partnering to create a system that will reduce health care costs and improve healthcare services for their U.S. employees.  Since then, Apple, without fanfare, published a website providing details about the impending launch of group health clinics, called AC Wellness that will provide Apple employees and their families with "concierge-like" healthcare services. Today, most Americans receive employer-sponsored health insurance and these four companies combined employ over 1 million workers in the United States. They have the power, money, and technology to take on both the private and non-profit (including government) health care industries and have more than enough potential to win.

So what does this mean for consumers? It is unlikely that patients will soon be turning to Dr. Amazon for heart surgery or Dr. Apple for a knee replacement. However, patients might soon be utilizing these giants for primary care and clinic services. The move of these tech corporations into the healthcare sector is likely to impact the entire healthcare industry. Just the announcement of the partnership between Amazon, Berkshire Hathaway, and JPMorgan Chase shook stocks for health insurers, including UnitedHealth Group and Anthem.

Amazon has already quietly started to take on the pharmaceutical industry. In August 2017, Amazon became the exclusive retailer of the Basic Care brand of over-the-counter medications, manufactured by Perrigo. As has been the trademark feature of Amazon, consumers have the ability to compare the prices between brands before committing to an online purchase. Using the price comparing features of retail Amazon, most of the Basic Care prices are undercutting even the prices of generic over-the-counter medications sold by large, national pharmacies.  With over 60 FDA-approved Best Care products, Amazon is getting the lay of the land

Similarly secretive Apple has also revealed very little about its AC Wellness clinics, but it confirms that the first two clinics will be located in Santa Clara, California, where its headquarters is located. Apple's "Careers" page lists positions including primary care physician, acute care physician, clinical exercise coach, and phlebotomist. It appears that AC Wellness will be focusing on providing Apple employees with a range of services.

Although these corporations' entrance into the healthcare industry has surprised some consumers, health insurance in America has always been shaped by consumer trends. Just about a century ago the employer-based health insurance industry was born when Baylor Hospital in Dallas, Texas observed that Americans were spending more on cosmetics than on medical care and offered a group of public school teachers the opportunity to pay for health care in the same way they paid for lipstick at the time, with small payments over time, and the hospital would provide all needed visits.

In America, the age-old trick seems to be: figure out how to sell consumers what they want, and use that information to sell them what they need. With corporate innovators venturing into the healthcare world, consumers are likely to see greater transparency in prices of both over-the-counter and prescription pharmaceuticals.  If these corporation-tested models are successful, other private employees might begin to see more employer involvement in the provision and insurance of thier healthcare.

Regardless of the specifics, some of the nation's most innovative minds understand that the healthcare industry has a problem and they are endeavoring to shape it themselves instead of waiting for lawmakers to do it for them.


Mara Smith is an associate with the law firm of Montgomery McCracken specializing in health law.