The Amazon of Healthcare is… Amazon?
Back in World War II, it was customary for technicians to repair the areas in which B52 bombers had been hit by gun fire and shrapnel. This practice seemed logical, until a man named Abraham Wald flipped the script on everyone. Instead, he reasoned that the Navy should actually reinforce the areas in which the planes were not shot. Wald figured that if the bombers were able to successfully make it back from combat, they obviously did not get hit in any vital areas. It was therefore wiser for the Navy to reinforce the other areas of the plane.
Charlie Munger calls this form of thinking Inversion. You do the opposite of what you would assume to be true, and evaluate the outcome. You will be very surprised with what you learn. Try it!
Healthcare is cool now?
The healthcare industry was totally rocked last week by a joint announcement made by Amazon, Berkshire Hathaway, and JP Morgan Chase. These three titans will be teaming up to create a healthcare network for their employees with the ultimate goal of improving user experience and lowering costs.
The press release also mentioned:
The initial focus of the new company will be on technology solutions that will provide U.S. employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost.
From the New York Times:
They are moving into an industry where the lines between traditionally distinct areas, such as pharmacies, insurers and providers, are increasingly blurry. CVS Health’s deal last month to buy the health insurer Aetna for about $69 billion is just one example of the changes underway. Separately, Amazon’s potential entry into the pharmacy business continues to rattle major drug companies and distributors.
Caterpillar (~100K employees) undertook a similar initiative years back, and found success in removing some of the middle men from the healthcare equation. Amazon, Berkshire, and JP Morgan (~1.1M employees) look setup to do just this, but at a much larger scale. My hope is that this initiative does not just reduce the medical bills for these companies, but also has a positive impact for the rest of us. Amazon’s customer focus makes this feel like a possibility. Who knows, pretty soon your Prime membership might include a free sample of Lipitor.
Product Wisdom
There are two types of software in this world: software people don’t use, and software people complain about. — Disenchanted Product Manager
In any profession in which you are providing customers with some type of product or service, you can sometimes feel like a huge failure. Customer complaints and feature requests are always coming in, and you feel like you can never make people happy. Instead of getting down on yourself, realize that you have done an amazing thing. People are actually using your product. If they weren’t, they wouldn’t be complaining.
