I first came across the the word "frisson" just now as I was trying to think of a title for this blog post. A frisson is that shivering sensation you get when you are excited or scared. When I think about Amazon training its guns on health care, I feel both.
My first thought after Amazon’s vague announcement from three weeks ago was that the platform will do with health care what it did with buying books: use data and algorithms to offer a cheaper, more convenient, and more intuitive experience to consumers. But my glee is tempered by trepidation about the implications for employment, equality, and privacy Amazon's domination of health care would entail.
To avoid offending any aspiring health care economists, I concede: I can’t tell you exactly how Amazon will succeed in health care, and there is a high probability that they will founder. Health care isn’t retail. Other tech companies have tried using algorithms and data to lower costs and create a superior customer experience, and been tripped up by the same incentive problems that hobble health care incumbents.
But I’m a true believer in the world-eating prowess of software. I would bet money on a new player using informational and computational superiority to become the intermediary for most health care transactions. With its money, expertise, and patience, Amazon could be the winning horse.
The health care space would probably employ fewer people if an Amazon interface becomes the intermediary for most transactions. Providers of health care products and services who want access to the demand Amazon controls would likely face brutal cost-cutting mandates. Hospitals, pharmaceutical companies, and medical device manufacturers would feel the Amazon squeeze, just like authors and publishers. Meanwhile, a lot of people employed in marketing sales, and administration wouldn’t be so necessary with Amazon sourcing patients the way Facebook sources web traffic for media companies.
As the employer of 17% of the workforce and a central character in America’s post-industrial economic story, even a small loss of jobs in health care would have huge ripple effects. It would mean that the internet’s transformation of the economy is moving out of beta and into general release. And it would be a full step towards the future I fear: where most economic activity is orchestrated through a sufficiently small number of platforms that you could fit their CEOs into a single smoke-filled room.
And those CEOs would be able to know everything about everyone. A dominant Amazon Health, in particular, would have access to the medical secrets of a huge proportion of Americans. All that data would probably lead to insights that improve health care. But I would be uncomfortable knowing that the same company who knows so much about my buying preferences knowing so much about my body. I’ll feel creeped out if Amazon puts cough drops in its “suggested items” box a day after I receive a strep diagnosis.
Platforms are great at making consumers’ lives easier, and no American consumers need their lives made easier more than health care consumers. Amazon’s new mission has a high upside. But it feels like we’ve entered an era where the only way to solve hard problems is through the application of huge databases and powerful algorithms. And if those are the only tools we have, we’ll end up in a world where equality and privacy are difficult, if not impossible, to maintain.