Skip To Content

Prime Health

Scott Galloway@profgalloway

Published on July 29, 2022

The U.S. healthcare industry is a wounded 7-ton seal, drifting aimlessly, bleeding into the sea. Predators are circling. The blood in the water is unearned margin: price increases, relative to inflation, without a concomitant improvement in quality. Amazon is the lurking megalodon, its 11-foot jaws and 7-inch teeth the largest in history. With the acquisition of One Medical, Amazon is no longer circling … but attacking.

Per capita U.S. healthcare spending went from $2,968 in 1980 to $12,531 in 2020 (both in 2020 dollars), more than a threefold increase. The result is a massive industry with 13% of the nation’s workers and total spending accounting for a fifth of U.S. GDP.

Doctor No

Healthcare can boast tangible achievements over the past 40 years. Life expectancy was up from 73.7 in 1980 to 78.8 in 2019 (before Covid knocked it back down a bit). There’s been a revolution in pharmacological treatments, and genetic research is starting to pay dividends. But the financial return — improvement divided by cost increases — has been abysmal. No nation has registered cost increases similar to those of the U.S., and no one spends as much as we do per capita in absolute terms. Yet nearly every developed country has better outcomes, with longer life expectancies, healthier populations, and far less economic stress.

Two-thirds of personal bankruptcies in the U.S. result from healthcare issues — medical expenses and/or time off work. For many middle-class American families, if Mom or Dad gets cancer, there’s a good chance the family will go bankrupt. Forty percent of American adults have delayed or gone without needed care because it’s cost prohibitive. For every improvement in healthcare, it seems our system finds a way to extract a dark lining. That same pharmacological revolution that improved outcomes for millions brought the opioid epidemic. In many areas, our results are lousy at any price: The U.S. has one of the highest infant mortality rates among developed nations.

Beyond spotty efficacy, healthcare offers the second-worst retail experience in the country. (Gas stations retain the No. 1 spot.) Imagine walking into a Best Buy to purchase a TV, and a Blue Shirt associate requests you fill out the same 14 pages of paperwork you filled out yesterday, then you wait in a crowded room until they call you, 20 minutes after the scheduled appointment you were asked to arrive early for, to be seen by the one person in the store who can talk to you about televisions, who has only 10 minutes for you. New York is the wealthiest city in America, yet the average waiting time in an emergency room is 6 hours and 10 minutes.

A good rule of thumb in business is that if it’s bad for the consumer, it’s worse on the other side of the counter. Physicians spend just 27% of their time helping patients — 49% is spent dealing with electronic health records. That includes documentation, order entry, billing, and inbox management. In other words, you spend a decade going to school to get an M.D., only to become a bureaucrat.

No industry has better demonstrated the dis-economies of scale. If we received the same return on our healthcare spending as other countries, we’d all live to a 100 without getting sick. Or, more likely, we’d spend far less, still live longer and healthier lives, and save enough to pay off the national debt in 15 years. U.S. healthcare is the worst value in modern history.

OK, so what to do? At the center of the worst system of its kind, except for all the rest — i.e., capitalism — lies the answer: competition.

Prime Time

Last week, Amazon announced its plans to acquire primary healthcare company One Medical for $3.9 billion. I believe this deal represents the catalyst for a significant societal unlock. I’ve been a member of One Medical for two years and think it’s outstanding. When I contracted Covid, I tapped the One Medical icon on my phone; within a few minutes I was speaking to a nurse practitioner who prescribed Paxlovid and even told me which nearby pharmacies had the antiviral in stock.

With Amazon, the company can recognize its vision. To date, One Medical’s stock has performed poorly — down to $10 per share from $40 at the beginning of 2021. It lost a quarter of a billion dollars last year, and needs capital (which Amazon has: $60 billion in cash). Next, ONEM needs scale. At present the service boasts 736,000 members — impressive. More impressive: More than half of U.S. households are Prime members. The final piece is delivery. One Medical operates a digital health / physical office hybrid business, but you still have to pick up medication from the pharmacy. The obvious upgrade is to have your Paxlovid delivered within hours of a remote consultation. This is Amazon’s core competence — it will happen. Speed and convenience will be so differentiated in healthcare, it will feel alien.

As with most paths to disruption, it’s been long and winding. Four years ago, Amazon teamed up with JPMorgan and Berkshire Hathaway to form Haven, hoping to provide better and more economical healthcare for their combined 1.5 million employees. Despite rocking the stocks of healthcare markets the morning of the press release, it was a headfake and folded in 2021.

Next, Amazon built an in-house service for its employees: Amazon Care. Virtual health services, plus nurses … delivered to your home. It’s doing much better, expanding across the country, and now provides healthcare for other companies. (Hilton is Amazon Care’s largest disclosed customer.) The acquisition of One Medical will couple capital, domain expertise, and installed tech with billing infrastructure, and bring it to 66 million Prime households. Imagine:

“Alexa, I feel feverish and my lower back is aching.”

“Connecting you to an Amazon Prime medical professional now.”

Want to vs. Have to

I predicted Amazon would get into healthcare several years ago. Why? For the same reason Apple is getting into auto: not because it wants to, but because it has to. Amazon stock’s price-to-earnings ratio is 56 — more than double Walmart’s. For the company to maintain its share price, it needs to add a quarter of a trillion dollars in topline revenue over the next five years. It won’t find this kind of revenue in white-label fashion or smart home sales. It has to enter a gargantuan market that lacks scale, operational expertise, and facility with data.

State of Play

A reshaping of healthcare won’t just benefit consumers, but investors. In 2015 healthcare services commanded equivalent multiples to the S&P 500 average. But the market is losing faith in public healthcare companies’ ability to grow in a meaningful way. EV/EBITDA multiples among healthcare services are 33% lower than the S&P 500 average.

Amazon isn’t the only predator sniffing prey. Walmart and Alibaba are both working on their own pharmacy businesses. Uber is working on healthcare transit. And in the private markets, telehealth received $29 billion in venture funding last year, up 95% from 2020.

The obvious and immediate unlock is telehealth, which was accelerated by the pandemic. In a matter of weeks, after the first positive Covid case in the U.S., services the industry insisted had to be delivered in person shifted to Zoom … and we survived. In fact, we thrived. Even once in-person visits were permitted, video house calls remained a thing. McKinsey estimates that the number of telehealth visits has stabilized at 38 times pre-pandemic levels. Doctors adopted the technology, regulators relaxed limitations, and patients saved time as barriers fell. We’re a long way from remote surgery, but huge numbers of patient visits don’t need to be visits at all: A study of 40 million patients during lockdown showed that for certain groups (e.g., people with chronic conditions) outcomes didn’t suffer when visits shifted online. And we’ll only get better at delivering care this way.

The disruption achieved by Amazon will be significant, and the flood of capital, startups, and consumer brands that will follow it into the space will inspire profound change. Mark Cuban launched a pharmacy in January that eliminates middlemen — from the insurer to the pharmaceutical benefit manager. The result? A 90-day supply of acid-reflux treatment that cost $160 is now $17. It’s estimated Medicare would have saved $3.6 billion in one year if it had purchased generic drugs through Cuban’s pharmacy. As other apex predators look for new sources of growth, many will turn their gaze on different limbs of the carcass. Nike could enter healthcare through a wellness positioning: orthopedics, acupuncture, and chiropractic. LVMH, L’Oréal, and Estée Lauder could build the first global plastic surgery brands. The Four Seasons and Hilton might open hospitals. Lennar and Pulte could build “Active Living” communities that Nana will leave feet first, bypassing the expense and tragedy of dying under bright lights surrounded by strangers.


Privacy is a concern: Your credit card and billing address is one thing, your HIV status another. However, I believe these concerns are overblown — most consumers (60%) feel fine sharing their personal health data over virtual technology. In addition, this is inevitable. Eighty-five percent of physicians believe radical interoperability and data-sharing will become standard practice. Finally, when it comes to handling your personal data, Amazon is the most trusted Big Tech firm. Reminder: Amazon is not Meta.

And What of Antitrust?

Amazon should be broken up (forced to spin off AWS and/or Amazon Fulfillment) and prohibited from advantaging its own products on the platform. It should also be permitted to enter healthcare via acquisition. The acquisition of One Medical is minuscule compared to the larger healthcare market: a $3.9 billion deal, while the largest healthcare company in America, UnitedHealth, has a market capitalization of $498 billion.

Elegant antitrust enforcement should not fall into the trap of believing that some people/firms are good/bad. It should recognize that competition is good, and in each deal the DOJ and FTC should stay focused on the prize: How do we make markets more competitive? E-commerce, digital marketing, and social media are too concentrated, and the FTC should force a divestiture of assets. At the same time, those same companies can foment much-needed competition in what has become a social ill.

We are overweight, depressed, and increasingly broke at the hands of U.S. healthcare. The treatment that offers the best outcomes is the same therapeutic that’s resulted in massive value and prosperity across most of our economy: competition.

Dear Amazon … bring it.

Life is so rich,

P.S. The cost of ads has risen astronomically. If you feel like you’re burning money, you might like our new workshop on Marketing Acquisition Strategy with ex-Slack and Google leader Holly Chen. Enroll now.




  1. Ethics Concern says:

    I’ve just found the problem with filing an ethics complaint against a hypnotherapist.

    It’s going to be at least 48 hours until Ethics Point looks at your complaint, but the hypnotherapist knows you’ve made it, can get the key code within 24 hours. I know it when I see that the complaint vanished, but I don’t know how it got the info from me. I tried refiling the complaint, but closing my eyes after I pushed the send button so that I don’t know the key code. There’s also the matter that Ethics Point is an option offered by psychology centers, and that no option not going through the centers themselves is apparent, no matter what branch of psychology you’re dealing with.

    Because I did make the odd decision to close my eyes and push the button, I know that Ethics Point has a complaint, with what should be enough information to stop an unethical hypnotherapist if they choose to bother.

    I wouldn’t recommend hypnotherapy, given what I’ve found out the hard way about their conduct.

    Seeing how my complaint vanished from Ethics Point, even suspecting that the hypnotherapist can still get the info from my head without my knowledge, makes me wonder how much anyone should trust any mental health professional.

    I hope someone from Ethics Point will see this and make sure they follow through on the complaint that was filed blind, so to speak.

    I also hope Scott’s readers will reconsider if they’re considering hypnotherapy.

    • Ethics Concern says:

      I know posting an ethics concern on your site like this is unusual, Scott. However, the knowledge that you’ll leave it up for at least a few hours means that someone will know I filed an ethics complaint, even if it disappears again.

      If that’s what it takes to sever my ties to an unethical hypnotherapist who won’t leave my mind or my life, I guess it’s what I have to do.

      • Ethics Concern says:

        Right now, I’m dealing with a thunderstorm in my head, even as there’s a thunderstorm out my window. The unethical hypnotherapist has a way of unleashing a barrage of its verbal abuse in my head when I try to stand up to it. I don’t know exactly how that works, but I knew it was coming, and I know it had ahold of me for quite a while before I knew I was under hypnosis. I did visit a psychologist, but never knowingly visited a hypnotherapist. The psychology center has been ghosting me on the matter. They know I understand that what they are doing is unethical at a level that may be unprecedented. I do want you to keep my posts up. The way my initial Ethics Point complaint vanished showed me that I did finally make them nervous, and it looks like making them nervous is the only way to make them ethical.

  2. BobM says:

    Of course the US has worse numbers then other countries with Government Funded Healthcare… THEY LIE about their numbers as would the US run Healthcare. “The U.S. has one of the highest infant mortality rates among developed nations.” Is a prime example. Also they don’t allow frivolous lawsuits against the Medical Industry.

    Tell me one thing the Government has ever done well and saved money… If they can’t run the Medicare and Medicaid efficiently, without FRAUD, then how do think they’ll do when the whole country is using their corrupt system?

  3. monica iler says:

    excellent reporting

  4. another bottleneck says:

    The AMA has boasted about how well they “control their numbers” since around 1900, when they used to taunt engineers for not being able to do the same, and, with increasing physician shortages looming, they are still at it today. (Google “physician shortage” and you will find a host of articles on this. BTW, it is also my, albeit subjective, impression that nurses began doing a better job of controlling their own numbers sometime between 2000 and 2010.) So we could use more competition here, which, perhaps paradoxically, would require greater government involvement in, e.g., creating more med schools and increasing the size of current med school classes, i.e., more “socialism” (public education) to create more competition. Anyhow, I don’t see an “improvement” in health care happening without a lot more practitioners. There’s no real competition there now.

  5. Thomas says:

    There is an interesting article about pre-conditions to competition in the healthcare system. In a terribly regulated healthcare system a new player – especially a player with a primary interest in making money – will not make the system better.

  6. Chip Hughes says:

    God forbid we treat healthcare as a human right and get it out from under the kind of competitive neoliberal rock that’s turned us all into debt junkies to access a thing that is treated as a human right in every other developed nation in the world.

  7. Tej Deol says:

    Fab article Scott. Have you read Michael Porter’s article years ago on in Harvard Business Review (also helpful):

    Redefining Competition in Health Care
    by Michael E. Porter and Elizabeth Teisberg FROM THE JUNE 2004 ISSUE

  8. Scotty McCartney says:

    I remember reading A Bitter Pill article in Time by Steven Brill (2013!!). Amazing, shocking and really disheartening. I remember thinking this is the blueprint for DC to fix it. Not a chance. All the vested interests and lobbying will never let that happen.

    I agree with other commentator’s points about tort reform and massive obesity/unhealthiness of the general population being big contributors too (the sugar lobby made sure of that with the food pyramid – biggest failed govt initiative ever – if govt ever admitted fault in that most of America + the insurance companies could sue!)

    External disrupter desperately needed. Fingers crossed.

  9. Paul Green says:

    Scott: Whereas I agree with most of your observations I challenge the trope about how bad our healthcare is compared to other countries. I am inclined to lay the blame at the feet of the individual and our society rather than the healthcare industry. Americans eat a lot of good tasting garbage. Look around at the percentage of people over 50 that are REALLY FAT! Our suburbs grew in a way that makes it impossible to walk to perform errands within a mile of each other – THERE ARE NO SIDEWALKS! We are collectively lazy and unwilling to adopt sensible habits that extend life. I think on balance our healthcare is outstanding – witness how many foreigners come here to receive care – but Americans have to also learn that good health is not derived in a pill bottle or tube of some oddly named med advertised on America’s Got Talent that I saw eating wings, Cheetos and washing it all down with my sixth beer.

  10. RM says:

    [We are overweight, depressed, and increasingly broke at the hands of U.S. healthcare.]

    We are overweight, depressed, and increasingly broke at by our own hands.

    U.S. healthcare profits from that dynamic, and therefore will do nothing to ameliorate the situation.

    But they will profit from it!

  11. Rebecca Martin says:

    There was no mention of politicians. They will certainly try to intervene on behalf of the lobbyists of insurers, thwarting the efforts of those newer companies. It could be a battle.

  12. Suzie Kidder says:

    And the thought of Amazon f*cking up something as critical as healthcare … as they have already destroyed first independent bookstores and then a host of other functions is terrifying. The tech world is brilliant, accomplished, facile and sometimes very shallow. Allowing it to take over what was always a human to human experience would be CRIMINAL.

  13. Suzie Kidder says:

    No, No and NO. There will be absolutely no substitute for an actual visit to a clinic. I’ve had ENOUGH of this “Everything can be done better virtually Bullshit. There is literally no substitute for an actual visit to a clinic where an actual human physician can examine you, spend even 15 minutes talking to you, touching you,, and sharing information. What we have to do is different. We have to put an electronic medical record on the wall so that the physician and the patient can share information .. and it is then recorded in that system – one that makes primary use of images and not just words. There is no virtual substitute to this – bodies will “talk to you” when you touch them, but ONLY when you touch them. What we need is a new electronic medical record that does to try to substitute for a trained physician and the patient who “owns and lives in” the body under discussion, but there is a much better way to design and deploy a medical record such that it becomes a 3rd partner in an “encounter,” and does not try to be that which it cannot be, and do that which it cannot do.

    • lisa a says:

      When you need to go to a clinic, you need to go to a clinic. Sometimes, though, you don’t need to, you can describe your own symptoms well enough. And sometimes you need to go to a clinic, but a zoom meeting is better than nothing. Shrug.

  14. Vik says:

    The article rightly points to a need for a disruption in US healthcare. With the way healthcare is structured (I am in healthcare), external third parties are best suited to disrupt rather than internal players. Providers in general have little time, incentive or focus to think about innovation or try a disruptive idea. they are always chasing their $, worry about patient volumes, lawsuits and to keep their bloated EMRs working. It’s absurd to hear that VA needs to pay $50 Billion for the VA EMR to work. When an ATM can work safely and securely anywhere in the world, why cant healthcare systems seamlessly exchange data? EMRs pay lip service to inter operability. I worked in many other industries before I got into healthcare. Sadly this industry thrives on inefficiency. Most hospitals claim to be not-for-profit and make it a point to be just above the water so that they don’t make a profit. Insurance companies and care providers have an adversarial relationship. Payors with their big war chests are on an acquisition spree to build vertically integrated entities, eventually leaving little choice to a patient. Govt pays more than half the healthcare bills, yet CMS (Medicare) is barred to negotiate drug prices with Big Pharma. Markets are supposed to take care of it.. and we know this hasn’t happened. Hence, Mark Cuban’s Cost Plus Drugs. Without these external entities’ disruption the industry has little reason or a need to change.

  15. Andrew says:

    I think one or two things that haven’t been mentions is that in most cases, hospitals now have a local monopoly, that is there’s maybe one in middle to large cities, hospitals in metropolises have a semi-defined boarder just as many Catholic parishes do. There’s also a small group of insurance companies that dominate the billing and negotiation side, from Centene (which is to medical insurance what Dollar General is to grocery stores) to Humana, Anthem, and the like. Capitalism nor socialism will make a significant dent in the American medical system until either the government forces a break-up on either side, or becomes much more heavy-handed in determining the rates and functions that hospitals and insurances must employ and accept. The Affordable Care Act did little, as it was designed mostly to benefit the hospitals and insurances while pretending to be more hospitable to the public. Pharmacy is a lot more competitive, but American government’s deference to capitalism is why the prices for medicene is where it is.

    Do want to mention about comparing the American health-care system to that of other countries. I recommend that you should watch videos or listen to streamers from various social medias from other countries about their healthcare experience. Britain is turning into an Americanized healthcare system as many will complain about their health care experiences from long queue lines and the beaucracy involved with just getting to a general practitioner. Canada has similar problems, but to a lesser degree. Most countries have problems with people who have much more difficult situations. This is pretty universal, if you look into rarer situations like those born a physical defect, or a more hidden disease, like Ehlers-Danlos syndromes.

    To me, the American government needs to become more directly involved in health-care, beyond their mandates with medicare and medicaid, veteran hospitals, and their own government employees. That is not arguing switching to a socialism-style system nor trying to encourage competition in the medical area. In terms of hospitals and health insurance companies, it’s too much of an oligarchy for new competition to gain a foothold. It’s only chance for reform is dictating the terms of prices to the hospitals, insurances, and pharmacy.

  16. thomas l toth says:

    Graph showing life expectancy v. expenditure.
    Most countries that beat US have universal health care.
    No surprise.

  17. C Cook says:

    A reoccurring theme for commentators, yet nothing really changes. But, the information just morphs to fit the commentator.
    Few people ‘go bankrupt’ over health costs. Medicaid money, hospital foundations, and write-offs pay. I know from first hand extended family experience that is true. Drugs are subsidized, usually be the manufacturer or GoodRx type companies. A cousin get Insulin as part of a community bank, subsidized by the manufacturer.
    Obama care is available to everyone, free to many. NO EXCUSE for not have insurance, other than ‘you are too busy protesting or too hung over’ to sign up.
    Hospitals seem to want to provide fine art and marble floors, but likely it was all with donated money for that purpose. Costs have skyrocketed, but so has wages with nurses turning toward radical unions. Too many tests are ordered, but ask any Doctor why. Lawyers circle patients with bad outcomes looking for WHY that ‘1 out of a 1000 chance of finding something test’ wasn’t done. Malpractice insurance can run hundreds of thousands a year. Doesn’t help patient outcomes, but does help Porsche sales to lawyers.
    Finally, health care is expensive because we consume so much. 40% of America is Obese. Diabities is rampant. And, 80% of COVID hospitalizations now are people who are Obese. Add in alcohol and drugs usage, and there is NO WAY any form of Socialized medicine fully taxpayer funded can survive.
    Single race/singe culture societies are struggling with Socialize medicine. Diverse countries such as Canada and UK are finally breaking under the cost. Cancer outcomes in UK are among the lowest in the world. Canadians can wait weeks to see a specialist.
    In summary, with all the faults, US system is still the best in the world. Better care can only come with tort reform and a population that decides to start taking care of itself.
    Stop blaming others Americans. Look in the mirror.

    • Phillip Soltan says:

      I couldn’t have said it better myself. Doctors have gone from being healers to magicians. People want some magic elixir that will allow them to keep living while changing little to nothing in their lives. Along with tort reform we need to make nutrition classes mandatory in all high schools. The number of people killing themselves with awful diets is incredible!

    • sleepycat says:

      Multiple studies confirm that 66% of US bankruptcies are due to medical costs and corresponding loss of work.

  18. Leslie says:

    Very thought provoking piece—thank you. A few comments/observations.
    Over the past 20 years, only two industries have risen at twice/neatly thrice, the rate of inflation: healthcare and higher education. Both claim to be not-for-profit; however, both mix a bit of capitalism and socialism. Look at the “pricing” for each. Pages and pages of legalese and technical language. To say the pricing is opaque is an understatement. As the experience of buying a new car has evolved and become more transparent, I hope the same will occur with healthcare and the cost of higher education.
    I would also add that top doctors from all over the world want to practice in the US. I believe our compensation drives this. Personally, I have no problem paying doctors a LOT. They are smart, train for years and literally have people’s lives in their hands. As things evolve, I hope US doctors continue to be well paid and that pay increases for PCPs and ER doctors.

    • NinaG says:

      Heh. I opted to pay CASH for my “Intra-ocular Lens Replacement” (cataract surgery), instead of going the insurance route. Had I used insurance, I would not have “qualified” for cataract surgery until I was almost blind, and, I would have to succumb to some underpaid, careless HMO doctor. NO THANK YOU! It was worth it take out a loan for $20K, and get carte-blanch treatment from the best doctor my money could buy, without all the hassles and running around that my insurance would have required. It’s true, money talks, and it literally screams in the medical world.

  19. Ben Turner says:

    This is spot on – One thing “quality of health outcomes” will always contend with is the US food system – Your last paragraph nails it – folks in the US are overweight and depressed I believe Mainly due to the foods we consume – If Amazon can pair healthy food And lifestyle choices with healthcare offerings , Overtime that could have massive impacts for US health outcomes.

    • C Cook says:

      Many of the NYC student of ‘Brand Management’ are paid a lot to sell salty and sweet high calorie food.
      The talk the ‘healthy organic, blah blah’ political lines at the cool parties, but their paycheck comes from the money making people Obese.
      The ‘smart’ left just cannot understand the hypocrisy. Can the Columnist?

  20. Dave says:

    Another great data driven discussion of yet another example of “American Exceptionalism” begging for disruption. We operate on beliefs and myths, and while I’m sure we have a lot to be proud of when it comes to the quality of our care, to access that quality has quickly become yet another domain of only the rich. If you decompose the data by socio-economic class, the disparity in outcomes varies wildly, with life expectancy and every other health metric in a developed society not only declining, but at or near the bottom relative to the rest of the developed world. Since our healthcare myths keep us from adopting the more successful models playing out in other parts of the world, the only way we’ll fix it is if big business comes in and disrupts. We love capitalist solutions and hate socialist solutions. Is Amazon really that evil? Real wages for the bottom two quintiles have risen dramatically BECAUSE Amazon raised wages and forced the hands of every other evil empire, from Walmart to McDonalds. So they may be evil, but they’ve changed so many games, I’m pretty sure they’ll change it in healthcare. So rock on and let technology and the market bring us the changes we need efficiently instead of via a quagmire of legislation, regulation, and red tape!

  21. Jeremy Keim says:

    Sorry, but there’s no way I’ll trust my healthcare to a company that forces its warehouse workers to piss in bottles to maintain productivity.

  22. Sandy Laube says:

    Anyone interested in this topic would be advised to read “The Innovators Prescription” by Clayton Christenson. Mr. Christenson takes the innovation philosophies he applied in The Innovators Dilemma to healthcare. I’d bet Bezos has a heavily bookmarked copy.

  23. Mark says:

    When viewed through the lens of capitalism, yes more competition in delivering healthcare is likely better (than what the US has now). Nonetheless, every country that is “doing better” on the life expectancy vs. per captia healthcare expenditure chart treats healthcare as a right and a public good. Universal healthcare is arguably more productive overall towards a nation’s wellbeing than anything a capitalistic framing could deliver.

    Competitive landscape or not, NO ONE should go bankrupt because they get sick. That in itself is evidence of a systemic national illness.

    • Rosanna says:

      You’ve nailed it, Mark. The capitalist lens is the problem. Healthcare is indeed a human right first and an industry second – and the reason it works in other developed economies is the universal healthcare system. This is another instance where arrogant American exceptionalism and the antiquated capitalist ideal of shareholder primacy do not work. Time for America to humbly learn some lessons from other countries. I’m sure Scott will change his tune after a few years living in the UK. Most Americans realise how flawed their system is after a stint as expats.

      • Sean Miller says:

        Rosanna, when you say that universal healthcare “works” in other developed economies, how are you defining “works?”
        What metrics/outcomes must a particular system fulfill to be classified as “working?”

        • Rosanna says:

          Sean, Scott outlined one of the metrics – life expectancy. America lags behind other developed countries with universal healthcare systems that don’t have the same conflicts of interest as the US healthcare system. But other metrics include general population health, affordability and access to quality care, reduced inequalities in access, quality of care – again, you’ll find the US does not excel in any of these metrics comparatively. And before you say lack of competition stifles medical innovation and R&D, keep in mind that countries across Europe, the UK, Israel and Australia are all innovators in medical science, health-tech and bio-tech. The issue is that those driving the US system can’t see that health is actually a basic human right and that the metrics need to be based on humans thriving, not businesses profiting. There are plenty of other industries where profit can be a more dominant metric.

  24. Bradley Walker says:

    Excellent points and overview. What needs to be mentioned is “Greed/Selfishness “. I spent my career in healthcare sales. Never did I imagine the self serving, self overrating, arrogant people that proliferate this industry.. When a C Level executive could reasonably retire as a result of one annual bonus, little else matters.

    • Bradley Walker says:

      Sorry, meant to also say…. The price gouging and price increases will not go away with Amazon entering the healthcare space. Healthcare is a need as much as water or education….. healthcare should be socialized. Socialized healthcare is proven to produce better outcomes at a less expensive cost

    • C Cook says:

      They are in lots of industries.
      Media and academia especially.
      Sports and tech also.
      But, energy and healthcare are all that we hear about. Likely because they do not spend lavishly for parties with the media or academics.
      Hollywood invented arrogance. But say that and you are off the ‘A’ party list, underpaid journalist.

  25. Victor Marroquin says:

    Fully in agreement, Scott. Innovating and using modern high tech to provide much needed health services and urgent care at the least possible competitive price is a great idea. It should not be excessively burdened by antitrust regulations. And with globalization, quality providers may be outsourced from other countries having high quality medical services and excellent doctors and nurses. Sure, this would need some legislation that current incumbents may make hard to pass by lobbying, but it is worth trying. Who said that great ideas do not need effort to prosper. In enjoyed reading your thoughts today.

  26. Phoebe says:

    I still don’t understand how Amazon can provide healthcare without health insurance companies (the real scourge of the healthcare system). One Medical is great but you still need “good” (i.e., expensive) health insurance to afford its services. My husband and I spend about an hour every month or two on the phone with their billing department or our health insurance provider to correct *their* errors and avoid being overcharged. Same scam, just shorter wait times and nicer couches.

  27. harvey charles zeller says:

    The Capitalist model is organized to make a profit on illness, so the sicker the better, that is , more profitable for the system. It is obviously antithetical to the whole concept of healthcare. Only a truly non-profit entity, i.e., the federal government, makes sense. This means a free system where payments to the healthcare system are made by the government, either Medicare or Health and Human Services, rather than not-for- profit hospitals who charge $100 for an aspirin and give their CEO’s a “salary” of $25 Million a year.

    • Sean Miller says:

      Couldn’t your logic be extended to say that capitalists also profit on cure? On effective medications? Or on development of healthful food sources?

      I have to disagree that capitalism and health are mutually exclusive. I also have doubts, given the outcomes of other government run efforts, that a government provided solution can outperform the market.

      Scott often, and rightfully, mentions market failure. But a decent Econ 100 class also instructs in government failure.

  28. Dr Rodney Samaan says:

    Great article and agree we need more competition and also did not mention they also get iora health, which has over 10 k Medicare advantage patients and know how to do value based care and my feeling is they got a great deal in that one medical paid over 2.2 billion just for iora health and the two companies combined will do a lot to improve healthcare in the USA and am looking forward to their progress. The only issue w the life expectancy charts is that it’s not a fair comparison given how diverse the USA is compared the other countries and overall we are doing average but need to be better

  29. Jane says:

    Healthcare and for-profit should never be used in the same sentence let alone paragraph. America will always have trash healthcare adn terrible health outcomes as long as it is for profit. Profit is always above everything else.

    • Sean Miller says:

      But Jane, without the profit motive, what incentive would companies have to invent new drugs? Innovative better surgical tools? Research causes of disease? I highly doubt anybody will tackle these on a large scale solely for the non financial benefits.

  30. Andrew says:

    There’s little evidence that the problems with our healthcare system that you accurately cite are the result of a lack of competition, or that they’d be cured by letting yet another giant private corporation (AMZN) get into the mix. Many of those other nations that spend less on healthcare but get better outcomes than the US? Their secret isn’t more privatization. It’s treating healthcare like a public good and just giving it to everybody. The One Medical acquisition may help wealthier people who already have insurance, but how does it help the millions of Americans who lack insurance or who are under-insured with garbage plans and high deductibles?

  31. Barry Winograd says:

    Thank you, Scott. Where do HMO’s fit into this picture? In particular, Kaiser Health (several states and DC) is the quite large with millions of members and not set up to be an acquisition.

  32. Urs Gubser says:

    I’ve lived in New York for 15 years and was also a member of one medical. I agree it’s good. However, I moved back to my native country of Switzerland which happens to be on the diagram. Our healthcare is absolutely brilliant but yes, relatively expensive compared to the other European countries but still much cheapper than the US. I think it’s naive to believe that Amazon could help fix a problem that has to do with human rights – what the US finally needs to understand is that you have to have the ability to give healthcare to everyone because it’s the right thing to do both from an economics point of view and also to provide service to people that can’t afford it otherwise.
    Leaving this to somone like Amazon is just going to be another nightmare for privacy and being dependent on a capitalist system that has no interest in addressing the underlying issue. It’s really sad that a nation has been blinded and brainwashed to believe that everything “social” is bad and yet, for companies, there are plenty of perks. When will the US address this topic through the human rights lens?

  33. Jim says:

    Glad to see Amazon’s acquisition. May they grow and be successful.

    Two realities to contextualize: in the US we don’t get value (health outcomes) for our dollars. And the US has a high infant mortality rate. These two sad truths area not created by the US healthcare system. Stop smoking. End overnutrition (obesity). Exercise. Stop taking drugs. Plan pregnancies and seek pre-natal care before delivery.

    An important observation to highlight: physicians spending only 27% of their time with patients, 49% on the EMR, etc…. This all results from government regulatory/billing requirements. Access to physicians is constrained: you can triple physician’s productivity by providing relief from these regulations and by pairing doctors with scribes and mid-level providers (Physician’s Assistants and Nurse Practitioners). This will free physicians to focus on their only real value-add: diagnosis and treatment.

    Jim Romanelli, MD, MBA

  34. Andrew Uerling says:

    Regardless of the ideas to ‘fix’ our dollars to result heathcare system, nothing will happen until we legislate most of the profits out of drugs/doctor/ hospitals etc. good luck with that, plus it is a great wedge issue to drive donations to one party or another OR BOTH! Just like immigration/guns/ abortion- nobody in power or attempting to gain power have any reason to change this.

  35. Ranjan says:

    Interestingly, the two sectors which have seen the greatest cost escalation are hospital services and tuition, for both of which the Government is a major payor. The outcomes are poor for each of these sectors due to complete non-transparency and lack of cost sharing. I have been using the Amazon Pharmacy and find their prices and services remarkable.

  36. Tom Darling-Fernley says:

    Always enjoy NMNM and Pivot, Scott. This post leaves me wondering: is competition a better salve for US healthcare than socialised healthcare, which is what all the other economies on your chart of life expectancy v healthcare expenditure have? I write from your new/future home, the UK, where since 1948 we simply have not experienced families filing for bankruptcy because mum develops cancer, people coping with injury because the ER is too expensive or spending £’000s on a course of drugs. Of course there are problems with the model, not least at the moment when I think most healthcare professionals would argue the National Heath Service is desperately under-resourced, but over decades and through governments of all stripes, we’ve mostly bought into the idea that when someone gets sick, the cost is spread among us.

    Is the prescription of Amazon as a disruptor the best to be hoped for, or just the best hope is the context of the American polity?

    • Jeremy Keim says:

      Sorry, but there’s no way I’ll trust my healthcare to a company that forces its warehouse workers to piss in bottles to maintain productivity.

    • Jeremy Keim says:

      Sorry about that. Didn’t mean to reply just to your message.

  37. Mark Petry says:

    thought provoking article Scott. I hope you’re right. I cannot see any other way out of the expensive mess that is the current healthcare delivery system. Plan Management is the other culprit responsible for the cost increases and poor outcomes

  38. Loren says:

    As usual, compelling, if not a bit bombastic, observations. However, tele-health and Amazon pharmacy delivery will neither lower costs nor stave off bankruptcies. The shifts in expenditures, i.e. market forces and profits, will not make the US any healthier. There will be great long-term investing opportunities, ie. more market forces, but the costs will continue to increase and personal bankruptcies will continue, with or without Amazon. Until we shift how society pays for healthcare, ie. priorities, we will continue to lag far behind other industrialized nations who have various forms of nation-wide healthcare for all.

Join the 500,000 who subscribe

To resist is futile … new content every Friday.