All of the well-intentioned, market-based arguments for solving America's health care conundrum aside, access to big data may be the key to driving success in this economy.
Especially if you are an institution that thrives on monetizing the knowledge that data provides and taking advantage of information asymmetries. Like, for instance, if you are one of the world's largest ecommerce, banking and insurance companies. Which - whaddya know? - the three partners in the initiative just announced happen to be.
So, the fact that they have intelligent leaders, what appear to be genuinely public-spirited motives and the means to make a difference, is important, but should not blind anyone to the opportunity inherent in gaining health care data and the ability to recombine it with financial, commercial and attitudinal information to gain market dominance. JL
Abha Bhattarai reports in the Washington Post, Karl Russell and Nick Wingfield report in the New York Times:
What happens when a company that has access to our weekly shopping lists, eating habits and in-home Alexa-based assistants also becomes involved in our medical care? There are federal restrictions on using medical data for marketing purposes or to make lending decisions by banks. But the law covers traditional health insurance and health care; it doesn’t cover many other sources of health-related data. “Amazon is a data-centric company.”
Amazon.com on Tuesday announced a joint partnership with Berkshire Hathaway and JP Morgan to create an independent health-care company for their employees, putting an end to months of speculation that the technology giant was eyeing a foray into the medical industry. It’s yet another endeavor for the company, which last year spent $13.7 billion to enter the grocery business with its acquisition of Whole Foods Market. (Jeffrey P. Bezos, the founder and chief executive of Amazon, also owns The Washington Post.)
But as the online retailer expands into new industries — cloud computing, drones, tech gadgets, moviemaking and now health care — some privacy experts say the company’s increasingly dominant role in our lives raises concerns about how personal data is collected and used. What happens, for example, when a company that has access to our weekly shopping lists, eating habits and in-home Alexa-based assistants also becomes involved in our medical care?
Health Care
+80% change in stock prices since Dec. 30, 2016+70Anthem+60+50UnitedHealth+40+30+20Amazon, JPMorgan Chaseand Berkshire Hathawayannounce they are forminga health care company+100–10JFMAMJJASONDJ20172018The most recent example: Amazon, along with JPMorgan Chase and Berkshire Hathaway, announced the formation of a new health care company on Tuesday. The three companies provided few details about the new entity, other than saying it would initially focus on technology to provide simplified, high-quality health care for their employees and their families, and at a reasonable cost.But health care investors shuddered at the prospect, selling off shares of established players like UnitedHealth and Anthem plunging. Both stocks quickly fell by more than 5 percent.Prescription Drugs
% change in stock prices since Dec. 30, 2016+10+ 5CVS0– 5Walgreens–10–15Rumors spread thatAmazon is consideringgetting into theprescription drug business–20–25JFMAMJJASONDJ20172018One of the more notable examples of Amazon’s influence is in the pharmacy business. After reports that Amazon might soon enter the prescription drug market, shares in CVS Health and Walgreens, the two largest pharmacy chains, fell sharply in early October.Then, in early December, CVS said it would pay $69 billion to buy Aetna, a deal that could reshape the health industry. Many analysts said that Amazon’s interest in selling prescription drugs was one reason why the two began talking. The idea is that the deal could help insulate the companies in case Amazon does make an ambitious move into selling drugs, as well as give the combined improved leverage in negotiations with drug companies.With huge amounts of consumer spending and frustrating inefficiencies, prescription drug sales are the type of business that invariably attracts Amazon’s attention. And the likelihood of Amazon eventually getting into the pharmacy business is high, several analysts and a former employee have said. But it is not clear when it will make that move or how aggressive it intends to be.Groceries
+60% change in stock prices since Dec. 30, 2016Walmart+50Amazon announces itis buying Whole Foods+40WholeFoods+30+20+10Amazon announces itis lowering prices atWhole FoodsTarget0–10Kroger–20–30–40–50JFMAMJJASONDJ20172018In June, Amazon announced that it would buy Whole Foods for more than $13 billion, by far its biggest acquisition yet. The unexpected deal sent shares in several of the nation’s biggest grocers, including Walmart, and Safeway, down sharply. Kroger, another top grocer, lost about one-tenth of its value on the day of the announcement.But the drop in stock prices wasn’t a one-time occurrence.Shares in these companies fell again a couple of months later, when Amazon said it would sharply lower prices on numerous products at Whole Foods. Kroger, for example, fell 8.1 percent that day.Package Delivery and Logistics
+50% change in stock prices since Dec. 30, 2016Hype of Amazon Prime Airflights to deliver goods onAmazon Prime Day+40FedExAmazon announcesa new $1.5 billionair cargo hub+30+20+10U.P.S.0–10–20JFMAMJJASONDJ20172018Amazon has put a lot of time and effort into improving its ability to deliver goods to customers, encroaching bit by bit on the country’s two giant delivery companies, FedEx and U.P.S. It has leased dozens of cargo jets to distribute inventory to warehouses around the country and is a building its own hub in Kentucky for a fleet of its own planes.The key phrases here are “own hub” and its “own planes.”When the news was reported in January that Amazon was building a cargo hub in Kentucky, where U.P.S. has its largest air cargo facility, stocks in both U.P.S. and FedEx plunged. In U.P.S.’s case, it would take the better part of the year for its shares to recover.That wasn’t helped by the media event that Amazon held in July to show off its Prime Air fleet of planes, which it tested during its annual Prime Day promotional event. In October, the delivery companies took another hit after a report that Amazon was testing its own delivery service.“Amazon already has huge amounts of our data — we give it to them in exchange for two-day shipping,” said I. Glenn Cohen, a Harvard Law School professor who specializes in health law policy. “But what happens when you add in actual health-care data? Many people are already concerned about who has access to that information, and this exacerbates those concerns.”
Amazon declined to comment for this report. Its announcement comes a week after the company opened its cashier-less supermarket, Amazon Go, to the public. In place of cash registers, the store has a network of cameras, scanners and infrared sensors that allow the store to automatically charge customers for items they place into their bags.
The Health Insurance Portability and Accountability Act of 1996 (HIPAA) prohibits health insurance companies and other entities from sharing personally identifiable medical data. There are also federal restrictions on using medical data for marketing purposes or to make lending decisions by banks. But, even if the new joint venture is subject to HIPAA rules, experts said there are exceptions to exactly what is covered.
“The law covers traditional health insurance and provider health care, but it doesn’t cover many of the other sources of health-related data that today’s technology generates,” said Peter Swire, a professor of law at Georgia Tech University and White House coordinator for HIPAA under President Clinton. “It doesn’t cover, for example, the books you buy about health care or the many fitness and health-care apps you may have on your phone.”
He and others added that even if companies aren’t collecting — or sharing — medical records, there are a number of other ways a patient’s habits and history could be used to glean important information about their health. (There are also signs that Amazon is considering possible privacy concerns: It recently posted a job opening on its site for a HIPAA expert who can “own and operate the security and compliance elements of a new initiative.”)
“You could say, ‘This patient uses our system to book doctors’ appointments six times a year,’ and compare that with that person’s purchase history to make certain connections,” said Cohen of Harvard. “Non-healthcare data can often be a rich source of information.”
Companies could also market cold and flu medicines to someone who always books doctor’s appointments at the beginning of flu season, he said, recommend obstetricians to a shopper who recently ordered pregnancy tests or prenatal vitamins.
Research shows that increased access to patients’ medical records and history reduces the cost of health care. But it also raises privacy concerns, particularly as companies use predictive technology to guess which patients may end up with a certain illnesses or chronic disease, said Idris Adjerid, an assistant professor who specializes in health technology and privacy at the University of Notre Dame’s Mendoza College of Business.
“Amazon is a data-centric company that’s good at artificial intelligence and machine learning, so it doesn’t take much to see that that’s what they’ll bring to the health-care industry,” he said. “It’s all very tantalizing, but there is also a constant tension between the pros of predictive health-care data and the challenges.”
And although the joint venture is initially being formed to serve employees of Amazon, Berkshire Hathaway and JP Morgan, some analysts said the implications could be even bigger if — and when — the service is extended to the broader population
“So much of this is unknown right now, but ultimately it would not surprise anyone if they start as a nonprofit health-care provider for 1.2 million employees, and in a few years, add it as yet another Amazon Prime benefit for general consumption,” said Stephen Beck, managing partner at New York consultancy cg42. “If we look down the road a few years, the obvious concern is data and privacy.”
0 comments:
Post a Comment