Amazons new healthcare company could give smaller healthtech players a boost

JPMorgan Chase and Berkshire Hathaway have joined forces with Amazon to form a new healthcare company for all U.S. employees. Right now details are so sparse there’s not even a name associated with the new company. However, this is big news for the industry, and it could possibly have ramifications not only for health insurance giants, but also smaller tech companies that are open to either partnering with the company — or even being acquired by it.

The decision didn’t come overnight. According to reports, the heads of each company — Jamie Dimon, Warren Buffet and Jeff Bezos — have chatted for years about how to fix the problem of high costs and a broken healthcare system.

“The ballooning costs of healthcare act as a hungry tapeworm on the American economy,” Buffet said in a statement out this morning. “We share the belief that putting our collective resources behind the country’s best talent can, in time, check the rise in health costs while concurrently enhancing patient satisfaction and outcomes.”

But others in tech have tried to jump into healthcare only to get bogged down with regulatory hurdles. Theranos founder Elizabeth Holmes, who did not have a medical background, ran into regulatory issues and was ultimately banned from operating in her own labs due to health and safety concerns.

Google parent company Alphabet is known for dipping its toe in the healthcare waters, with Calico and Verily Life Sciences. However, Google shut down its health management platform Google Health after it failed to gain traction.

“When [tech companies] start to understand the complexity, even just the idea of an electronic health record, they pull out,” says health consultant and CEO of Avalere Health Dan Mendelson.

Bezos has acknowledged the difficulties for tech companies in the space, saying the healthcare system is “complex” and that the three “. . . enter into this challenge open-eyed about the degree of difficulty.”

Companies that have succeeded in healthcare have largely been those with a background in the industry, Mendelson points out. However, the allure to get into the space has fueled plenty of tech company attempts, especially in the last year. Apple recently launched a feature with its iOS update to allow users to upload medical records and Amazon has already been rumored to be in talks with drug makers.

And stronger technological chops is something the industry needs going forward. Amazon is in a position to provide these measures with machine learning, AI, online communications and other tools needed to make a more efficient and effective system. But it will likely need outside help from health experts, and it remains to be seen how these three iconic companies plan to move the ball forward without industry understanding.

Collective Health founder Ali Diab has one, perhaps unsurprising suggestion: that the new company that’s being formed work with Collective Health.

Collective Health offers companies healthcare coverage through a cloud-based, integrated health benefits platform for self-insured employers and, as Diab points out, has been providing that solution for the last five years to large companies like eBay and Restoration Hardware.

“I would suggest they focus exactly on what we are already doing, which is build infrastructure that knits everything together,” Diab says. “It’s not stuff that people see. It’s all the infrastructure to ingest data from various sources, process claims, to make that data analyzable, to build machine learning and AI-based systems on top of it that help identify people that need care way before they might even know.”

JPMorgan Chase, Berkshire Hathaway and Amazon could potentially snap up smaller tech companies like Collective Health that are working on these types of solutions, as well.

“It would not surprise me to see them start to acquire some of the technology that makes their goals possible,” says Mendelson. “This team is very capable from a mergers and acquisitions standpoint. That’s not an accident.”

Read more: https://techcrunch.com/2018/01/30/amazons-new-healthcare-company-could-give-smaller-health-tech-players-a-boost/

Heres How the 20 Contenders for Amazon HQ2 Stack Up

Now that Amazon.com Inc. has whittled down the list of cities it’s considering for its second North American headquarters, it’s time for a new round of everyone’s favorite parlor game: arguing about which city would suit the technology giant best.

After the e-commerce company said it was seeking a second HQ to relieve pressure on its Seattle home base, it received proposals from 238 locations, full of rich economic incentives and goofy marketing gimmicks.

Now it has narrowed the field to 20 places, including three bids from the Washington D.C., area, where Amazon Chief Executive Jeff Bezos has put down roots, as well as proposals from smaller Midwestern cities (Columbus, Ohio; Indianapolis) and major population centers (New York, Los Angeles, Chicago, Toronto and Dallas).

Economic incentives aside — and there are plenty — here are some pros and cons of the places on Amazon’s very long shortlist.

Atlanta

Pros: A major airline hub and home to big corporations, such as UPS, Coca-Cola and Delta. A recent focus on redevelopment projects like the BeltLine — a series of parks built on an old railroad spur that runs through the city — may add to the city’s appeal.

Cons: It’s still not that cool. Amazon prides itself on its urban Seattle locations being walkable and bikable, and a more suburban city like Atlanta may contradict that spirit. Terrible traffic, too.

Austin

Pros: Close to the distribution and business hub of Dallas but much hipper. No Texas income tax, an established tech industry and home to Whole Foods, which Amazon recently acquired.

Cons: Small airport. Despite surging population, still doesn’t feel like a major U.S. city. 

Boston

Pros: Proximity to Harvard, MIT and a wealth of other colleges and universities, an airport with nonstop flights to Seattle and Washington, D.C., and a track record for providing rich relocation benefits, like the incentives the city offered GE in 2015.

Cons: Has some of the same drawbacks as New York—high cost of living, tight residential and commercial real estate markets—without the same cultural amenities and depth of talent. 

Chicago

Pros: A heavy concentration of operations, marketing, finance and sales employees to poach from other industries. Good public transit, walkable neighborhoods and a variety of housing choices, from downtown apartments to traditional suburbs. 

Cons: Shootings in the city have become national news, and the state is still emerging from dire financial straits. Digging its government out of debt could require tax hikes and cuts to public services. 

Columbus

Pros: A major research university in Ohio State, a fast-growing economy and cheap housing.

Cons: The housing is cheap for a reason.

Dallas

Pros: Has been a magnet for corporate relocations in the last two decades, offering high quality of life and access to a deep pool of workers. There’s no state income tax, and unlike Austin, it’s a major city and an airline hub.

Cons: Dallas suburbs may seem pretty stodgy to Amazon employees used to the cultural amenities in downtown Seattle. 

Denver

Pros: Denver is already popular with tech companies. Colorado boasts strong engineering schools and trounces the other finalists when it comes to close proximity to fresh powder. Fresh, and legal, pot, too, for those who partake.

Cons: The exodus of workers to Denver’s burgeoning tech hub has already stretched the local housing market. Doesn’t offer a lot of geographic diversity from Seattle.

Indianapolis

Pros: Tech company salaries would go far in the heartland, and choosing Indianapolis would make Amazon arguably the most important employer in middle America.

Cons: The sheer of size of the Amazon HQ could swamp the city’s residential and commercial real estate markets. As in Columbus, the cheap housing here isn’t a mystery. 

Los Angeles

Pros: The tech giant’s Amazon Studios division—quickly becoming a force in Hollywood, with original streaming TV series such as “Transparent” and “Man in the High Castle”—is based in Santa Monica.

Cons: It’s an expensive place to live, a hard place to build in and, like Denver, it doesn’t offer a lot of geographic diversity from Seattle.

Miami

Pros: The Seattle workforce could use a little sun. Bezos, currently the richest man in the world, attended Miami Palmetto Senior High School.

Cons: Lacks an existing tech ecosystem, has high housing costs and might be under water at some point.

Montgomery County

Pros: This Maryland county is one of three bids in or near the District of Columbia to land on the shortlist. Bezos has put down roots in the area with his acquisitions of the Washington Post and the city’s largest private home.

Cons: Commercial real estate is probably more available here than in the U.S. capital, but the trade-off is asking the company’s workforce to work in the ’burbs.

Nashville

Pros: Good universities, no Tennessee income tax and fame as the country music capital of the world have already made the city popular with major employers.

Cons: Like Austin and Denver, the city has already succeeded in convincing companies to relocate, and the local housing market has struggled to keep up with the flood of new workers.

Newark

Pros: Proximity to New York without the Big Apple’s staggering home prices. In October, then-New Jersey Governor Chris Christie pledged to back the city’s bid to lure Amazon with as much as $7 billion in tax breaks. 

Cons: The city might be a tough sell for workers over San Francisco, Los Angeles or New York.

New York

Pros: Locating in New York would give Amazon access to the world’s top pool of finance and media talent and a growing tech scene.

Cons: Housing prices are already high, one of the reasons locals in Seattle are pushing back against the company’s expansion there. There’s also limited space for new office construction.

Northern Virginia

Pros: Like Washington, D.C., and Montgomery County, Northern Virginia offers an educated workforce and proximity to both the federal government and the Washington Post. Commercial real estate is easier to come by than in the District of Columbia.

Cons: The area isn’t as strong on urban appeal as some of the other contenders.

Philadelphia

Pros: Good transit, large population, and it’s close to New York and Washington, with much lower housing costs.

Cons: Amazon would have to convince workers in those two cities that giving up cultural amenities for cheaper housing is a trade worth making.

Pittsburgh

Pros: Home to top AI and robotics university Carnegie Mellon, which have already drawn top tech companies like Google and Uber. Close to major distribution hubs in the middle of the country.

Cons: It’s far from other major cities and tech hubs.

Raleigh

Pros: Part of an existing tech hub; offers cheap housing, good quality of life and the chance for Amazon to put its stamp on a city in a way that it couldn’t in more established metros.

Cons: Clashes over gender identity and other hot political issues suggest North Carolina is still struggling over its own identity.

Toronto

Pros: A major financial and technology hub and a population that would put it among the top 10 U.S. metropolitan areas. Potentially easier to hire people from abroad because of a more open tone on immigration from the government than in the U.S.

Cons: Housing prices are high compared to cities like Atlanta. The city also doesn’t have much space for housing and commercial development required for HQ2 in the downtown core. Moving integral operations north of the border holds political risks in dealing with the Trump administration.

Washington, D.C.

Pros: A strong technology workforce and proximity to lawmakers and regulators. Bezos put down roots in the area with his 2013 acquisition of the Washington Post.

Cons: Lack of space and zoning restrictions could make it hard to find enough office space. Sticking the headquarters in the ’burbs would make it easier to find land but harder to appeal to workers. And you don’t get a U.S. senator to fight for you on the Hill.

    Read more: http://www.bloomberg.com/news/articles/2018-01-18/amazon-ignites-fight-for-hq2-here-s-how-20-contenders-stack-up