I think it's safe to say that everyone wants to see more value in the American health care system, and it looks like a lot of major players are stepping up to deliver. In the past three months, major announcements have re-energized the industry and many are excited about the future possibilities.
ICYMI: It's rumored that Amazon is working on prescriptions and health data (although not many details have been released) and they're already selling medical equipment in a big way. Then, CVS bought Aetna for $69 billion, making it the largest merger of 2017. Next, Amazon, Berkshire Hathaway, and JPMorgan Chase announced a collaboration to do something about health care for their 1 million employees. Finally, this week it was announced that Walgreens is in talks with AmerisourceBergen.
Three thoughts came to mind after I heard about this potential acquisition…
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1. Walgreens may be prepping to compete with Amazon on cost and experience
Amazon is viewed as a retailer, but is actually a logistics and supply chain genius. They mastered giving the customer what they want, when they want it! AmerisourceBergen is a distributor whose expertise lies in being a liaison between drug developers and pharmacies.
This potential Walgreens-AmerisourceBergen acquisition could help lower costs and create additional synergies, ramping up for what many believe will be an emerging competitor to Amazon. It could enhance Walgreens' ability to shore up their logistics to better meet customer needs. Here's a real-life example: What if I got diagnosed with the flu via telehealth and my Tamiflu was delivered to my front door within two hours, along with chicken soup and Kleenex?
2. Health care is big and the opportunities are endless
The future brings continued growth in the health care industry due to an aging population, government subsidies and a growing need to improve the patient experience.
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In January, The Atlantic reported that health care became America's largest employer.
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$1 out of every $6 spent in the U.S. is spent on health care.
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Health care accounts for 18 percent of the GDP in the U.S., and is projected to grow to 25 percent by 2025.
Consumers could see true price-reducing disruption, with several major players inside and outside of the industry focusing on improving the cost, supply chain and customer experience. I'm excited to see these industry giants pay attention to their competitors, but obsess about their customer. As consumerism increases, that obsession with the customer will drive them to look outside the industry for new ideas. Speaking of…
3. In the end, the customer experience must be truly helpful!
Mergers, acquisitions and partnerships are exciting news, but they don't matter if the end goal isn't a relentless pursuit to serve the customer. Back in 1997, as Steve Jobs was being challenged about not using the current Java technology, he answered brilliantly: "You have to start with the customer experience and work backwards to the technology." Certainly, the American health care industry is more complex and vastly different than building the iPhone. However, the lesson of starting with the customer experience and then filling in the gaps is definitely applicable to today's opportunities in health care.
I think this quote from Rob Siltanen is a good reminder to all of us in the health care industry to embrace change, take risks, be innovative and stay flexible:
"Here's to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They're not fond of rules. And they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them. About the only thing you can't do is ignore them. Because they change things. They push the human race forward. And while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do."
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