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Amazon Failed at Health Care Because It Wasn't a 'Disrupter'

Amazon has been one of the most economically disruptive companies in history, leaving failed companies, business models and the-way-we’ve-always-done-it mentality in the dust. 

Retail sales, marketing, delivery and customer feedback have all changed for the better as a result. One key element of that disruption was that Amazon put the consumer in charge. 

The company’s online platform allowed consumers to shop, compare prices and quality, and find out which products and vendors other consumers were most satisfied with. 

Critical to that model is the underlying economic incentive: Consumers are willing to take the time and effort to research products and sellers and comparison shop because, in the large majority of cases, they are spending their own money. 

Amazon and its two health care reform partners, Warren Buffet’s Berkshire Hathaway Inc. and Jamie Dimon’s JPMorgan Chase & Co., announced in 2018 that they were uniting to form Haven Health. 

Their goal was to “create new solutions and work to change systems, technologies, contracts, policy, and whatever else is in the way of better health care,” according to Dr. Atul Gawande, a surgeon and Harvard University professor and health care reform advocate, who was hired, with much fanfare, as Haven’s first chief executive. 

The announcement created a lot of excitement. If anyone could bring free market and technological disruption to the U.S. health care system, the reasoning went, it was the quintessential disrupter: Jeff Bezos and Amazon. 

But the companies just announced, with much less fanfare, that they are abandoning the effort. 

The failure was entirely predictable, because their joint effort only tweaked the current health care system rather than disrupt it.  That is, they looked for ways to negotiate deeper discounts from providers, lower the cost of prescription drugs, and turn to more telehealth options, such as online doctor visits. 

Haven tried to build a better mousetrap rather than reinvent the mousetrap. 

The irony is that the guiding principle of Bezos and Amazon—the only real disrupter among the three—has been to put the consumer in charge. 

Give the consumer the ability and tools to be a value-conscious shopper in the marketplace—in a system where the consumer financially benefits from being a value-conscious shopper—and Amazon changed the world. 

Had Haven brought that same disrupting mentality to the health care system—a system where in the vast majority of cases consumers (i.e., patients) are insulated from the cost by a third-party payer—it would have changed the health care world also. 

Haven didn’t fail because it tried to be a health care disrupter, it failed because it wasn’t one.