Former Apple CEO John Sculley spoke out last week about the key role Amazon could play in the healthcare industry. The conglomerate partnership between Amazon, Berkshire Hathaway, and JP Morgan Chase & Co. has turned the heads of many in the three-trillion dollar industry, but little is known as to what exactly they have in store for consumers.
Sculley told The Street in an interview that Amazon playing a key role in health is a matter of when, not if, calling the partnership “terrific.”
The three giants announced their union in January, with a focus on using technology to find solutions and provide transparent and affordable care. Tensions heightened on mergers like Cigna-Express Scripts and CVS-Aetna. Healthcare provider stocks were also tanking shortly after opening-bell following the announcement, UnitedHealth shares fell almost five percent.
These companies have deep pockets with balance sheets that when combined, make even the king of revenues among providers seem laughable. The consortium also claimed they were not actively seeking profits, meaning they are prepared and willing to lose money. Bad news for competitors concerned with earnings.
In an interview with The Street, Sculley said:
Healthcare is so big and so complex. It’s not surprising that Amazon will probably take a little time to decide what they specifically want to do, but I cannot imagine they won’t find some way to play a significant role in healthcare at some point, whether it happens in the next year or two or whether it takes longer.
Together, the trio has billions of dollars in cash on-hand, including short-term investments. With such large amounts at such high liquidity, the companies have quite a bit of mobility. To access the cash flow statements of these public companies, visit the Securities and Exchange Commission’s EDGAR search engine.
In June, the partnership announced the CEO of their joint-company, surgeon and writer Dr. Atul Gawande, profiled this summer in Forbes. Healthcare experts were surprised by the decision considering Dr. Gawande’s background but it could give the new company negotiating powers–that is, aside from cash.
Sculley called him ” an excellent choice” for the venture.
For a bit of analysis on where the trio is heading in the healthcare sector, check out this CNBC article.
Or, learn more about the CEO of the venture Dr. Atul Gawande at NPR.