While hypothesized for some time, the recent announcement that Amazon, Berkshire Hathaway and JPMorgan Chase are teaming up to form an independent healthcare company aimed at cutting costs and improving quality shook every corner of the industry. While details are still scarce—and the alliance is currently only confirmed to benefit its roughly one million combined employees—healthcare strategists should start contemplating the potential of a new breed of direct-to-consumer health companies (like Amazon) with an appealing value proposition.

Together, these three firms have sufficient assets to create scalable impact. A beloved shopping, quality and transparency platform in Amazon Prime. Data analytics and an artificial intelligence engine to crunch enrollee data and then recommend products and services. A captive claims processing and enrollment system in Berkshire’s GEICO. More access to cash than seemingly anyone. And a brand (i.e., Amazon) synonymous with great experiences and successful customer-facing innovation.

It’s no secret that the rising cost for quality care has ripened the industry for disruption. And if Amazon’s track record in retail has anything to say, this move isn’t something healthcare strategists should take lightly. This won’t just be a big online pharmacy or hospital purchasing play.

Keeping this in mind, here are three simple lessons you can learn from Amazon.

  1. Develop a strategy for achieving true market differentiation
  2. Invest in designing great products consistent with that strategy.
  3. Spend money to promote your brand and its great products.

I had an English professor in college who used to say, “I refuse to participate in my own diminishment.” If hospitals and health systems don’t embrace meaningful brand differentiation strategy, product development and strategic marketing, they’ll be left to be price-, regulation- and scrap-takers by the market, and, de facto, complicit in their own diminishment and marginalization.

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Dan Miers

Chief Strategy Officer at SPM Marketing & Communications
Dan anticipates “what’s next” in our complex industry and keeps SPM on the leading edge of healthcare policy and strategy. A valuable resource to all SPM clients, his strategic insights focus how we understand and apply industry trends to client issues. With 20 years of experience, Dan has two master’s degrees in healthcare administration and finance, worked in business development at an academic medical center, and launched a healthcare technology company. He is also a frequent speaker at industry events and an active member of the Society for Healthcare Strategy and Market Development (SHSMD).
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