Big Tech’s dream of transforming health care is getting the scalpel

Humbled by missteps, Amazon, Microsoft and Oracle are trying a new strategy: buy brands well-known in narrower categories.

Tablet computer, stethoscope, pills and computer mouse on turquoise background

It is still very early in the effort to reimagine health care, a sector that badly needs diversification and one in which technology could have a profound impact.

Photo: the_burtons/Moment/Getty Images

Big Tech hasn’t been shy about its dream of bulldozing the existing U.S. health care industry and, in its place, erecting some new system that has to be better because it’s designed by Silicon Valley.

What that new system is remains a mystery. And while all empires might fall eventually, it is nowhere near the end for the mighty and entrenched hospitals, drug manufacturers or insurers that have benefitted handsomely for decades by making the ecosystem as convoluted as possible.

Technology’s biggest names have all attempted, in one way or another, to upend the industry, promising that the holy combination of lines of code, a ton of data, the cloud and perhaps some wearable device will magically fix decades of dysfunction.

Now, perhaps humbled by the sluggish pace of improvement, Big Tech is trying a new, more classic strategy: buy consumer and professional brands well-known in narrower health care categories.

“Health care is not just a question of, can you have a better solution? It’s a question of consumer trust,” SVB Securities senior managing director Stephanie Davis told Protocol. With Big Tech, “there’s that ick factor.”

It is still very early in the whole effort to reimagine health care, a sector that badly needs diversification and one in which technology could have a profound impact. But Amazon and others have their work cut out for them.

“Health care is not just a question of, can you have a better solution? It’s a question of consumer trust.”

Despite the glaring problems in the U.S. system, most Americans still trust it and are largely OK with the prices they pay. That’s not the case for everyone, of course. And driving consumer adoption of the latest innovation could prove challenging for even the tech industry’s best marketers. For example, the pandemic gave a much-needed boost to telemedicine, but we all largely still see our doctor the old-fashioned way. And some individuals, especially the elderly or chronically ill, may never embrace online care or find that it fits their needs.

But instead of any significant moves to improve outcomes or lower costs for patients, we’ve been left to largely settle for flashy marketing announcements and buzzword-laced press releases. Oracle’s statement announcing the Cerner deal, for example, touted its “capacity to transform healthcare delivery.”

Much of the blame for vendors like Amazon and Google failing to meet the sky-high expectations they set for themselves was the decision to pursue a take-no-prisoners approach to the expansions. The companies stampeded — with half-baked products, no less — into a sector notoriously cautious to jump aboard the latest tech trend. There’s no example more classic than IBM Watson Health Care, which was recently sold for parts.

A physician in a white coat testing mixed-reality 3D glasses. After high-profile failures in health care, tech giants are now placing their bets more precisely: Amazon is targeting brick-and-mortar primary care, while Microsoft is aiming to be ever-present in the doctor’s office. Photo: Jens Kalaene/picture alliance via Getty Images

Now tech giants are placing their bets more narrowly. Amazon is targeting brick-and-mortar primary care, Microsoft is aiming to be ever-present in the doctor’s office and Oracle is homing in on the medical record industry with its $28 billion deal for Cerner.

Alphabet remains a bit of a wildcard. The company has hired some industry heavyweights but its focus is vast, including wearables and medical records. But Alphabet’s success will almost surely come predominantly from AI and machine learning-based products, which the company excels at. And while Apple is moving beyond health-related applications on the Apple Watch, the early success seems to weigh much heavier on the consumer side.

The moves recognize just how difficult it is to navigate the health care sector as an outsider. For example, Google’s partnership with Ascension got severe blowback over fears the company would misuse patient data. (Who could imagine such a thing?)

And it’s why many of the aforementioned companies have spent heavily to gain access to well-connected executives, industry-tailored software, trusted brand names, deep customer relationships and core IT infrastructure needed to run the health care system. Amazon paid $3.9 billion for One Medical; Google paid $2.1 billion for FitBit; Apple has acquired a slew of smaller startups focused on areas like asthma monitoring and personal medical data; Oracle paid $28 billion for Cerner and Microsoft paid $16 billion for Nuance, among other deals.

Fitbit logo on a wall above a Fitbit displayCompanies like Google, which bought FitBit for $2.1 billion in 2021, have spent heavily to access trusted brand names.Photo: Dursun Aydemir/Anadolu Agency via Getty Images

“A little bit of domain expertise goes a long way,” said Futurum Research analyst Daniel Newman.

The splintering of efforts makes sense. But until there is some mechanism to bridge the gap between the still-siloed parts that together make up the U.S. health care system, many of the current challenges for patients and providers are likely to remain.

In a relatively minor example of the infuriating complexity of the existing system perpetuated by the incumbents, CVS previously refused to transfer prescriptions to Amazon’s pharmacy, which meant that if someone wanted to use the latter, they had to get a doctor to rewrite the prescription, according to Davis. CVS did not respond to a request for comment on the current policy.

Big Tech continues on its quest to become that fabled entity that would do away with such annoyances. However, claims by any large technology company of “revolutionizing” health care should be viewed with skepticism given the lack of progress to date.

“Health care takes two things that tech doesn’t have. It takes time … and doing it with the best interest of the consumer in mind,” said Davis. “It’s difficult to see anything branded by Google or Amazon and think, ‘They really want to help me.’”

Over a decade ago, Google wanted to get into medical records, only to quickly realize the company was drastically out of its element. It has had a scattershot strategy that included the launch — and subsequent dismantling — of Google Health. As a result, it lost David Feinberg, a well-connected and well-respected health care leader, to Cerner, which, of course, is now a part of Larry Ellison’s family.

“It’s difficult to see anything branded by Google or Amazon and think, ‘They really want to help me.’”

Amazon has a real shot with One Medical to make the whole doctor’s visit significantly better, but much of that is already available through One Medical now. And Amazon’s track record in health care isn’t stellar. Its much-publicized efforts have largely fallen flat or failed to achieve the lofty expectations attached to any project the ecommerce behemoth dips its toes into. The partnership with Berkshire Hathaway and JPMorgan Chase to do … something fizzled rather quickly. Amazon’s $753 million purchase of PillPack doesn’t seem to have made a huge dent in the pharmacy world. And an earlier project with Crossover Health to launch new care centers is in question after the One Medical deal.

The Amazon Pharmacy home screen on a laptop computerUntil the discrete sectors of the U.S. health care system are brought together, challenges for patients and providers will likely remain, as with CVS previously refusing to transfer prescriptions to Amazon’s pharmacy.Photo: Gabby Jones/Bloomberg via Getty Images

The health care industry also hasn’t bought into Big Tech’s marketing hoopla with the same gusto as other sectors. That, however, is quickly changing.

More and more companies are making digital investments a key pillar of their overall strategy. Mayo Clinic, for example, is in the midst of an IT overhaul with Google Cloud that the hospital chain is promising will “transform healthcare.” And with the advancements in machine learning, particularly in natural language processing, some of the more forward-looking applications — like automated transcription — seem much more realistic today.

“The current bureautic system that exists in health care has been resistant to making any meaningful improvements to create a next level standard of care,” Newman said. “What we have seen has come from tech.”

That should make it easier for the likes of Satya Nadella, Sundar Pichai, Andy Jassy and Ellison to pitch their respective war strategies to further invade the sector. But after years of battling it out, a Silicon Valley takeover is still far from a reality.

Instead, at least in the near-term, we’re likely to be left with fringe benefits like a combined Amazon Prime-One Medical subscription, which is depressingly on par for the U.S. health care system.


Judge Zia Faruqui is trying to teach you crypto, one ‘SNL’ reference at a time

His decisions on major cryptocurrency cases have quoted "The Big Lebowski," "SNL," and "Dr. Strangelove." That’s because he wants you — yes, you — to read them.

The ways Zia Faruqui (right) has weighed on cases that have come before him can give lawyers clues as to what legal frameworks will pass muster.

Photo: Carolyn Van Houten/The Washington Post via Getty Images

“Cryptocurrency and related software analytics tools are ‘The wave of the future, Dude. One hundred percent electronic.’”

That’s not a quote from "The Big Lebowski" — at least, not directly. It’s a quote from a Washington, D.C., district court memorandum opinion on the role cryptocurrency analytics tools can play in government investigations. The author is Magistrate Judge Zia Faruqui.

Keep ReadingShow less
Veronica Irwin

Veronica Irwin (@vronirwin) is a San Francisco-based reporter at Protocol covering fintech. Previously she was at the San Francisco Examiner, covering tech from a hyper-local angle. Before that, her byline was featured in SF Weekly, The Nation, Techworker, Ms. Magazine and The Frisc.

The financial technology transformation is driving competition, creating consumer choice, and shaping the future of finance. Hear from seven fintech leaders who are reshaping the future of finance, and join the inaugural Financial Technology Association Fintech Summit to learn more.

Keep ReadingShow less
The Financial Technology Association (FTA) represents industry leaders shaping the future of finance. We champion the power of technology-centered financial services and advocate for the modernization of financial regulation to support inclusion and responsible innovation.

AWS CEO: The cloud isn’t just about technology

As AWS preps for its annual re:Invent conference, Adam Selipsky talks product strategy, support for hybrid environments, and the value of the cloud in uncertain economic times.

Photo: Noah Berger/Getty Images for Amazon Web Services

AWS is gearing up for re:Invent, its annual cloud computing conference where announcements this year are expected to focus on its end-to-end data strategy and delivering new industry-specific services.

It will be the second re:Invent with CEO Adam Selipsky as leader of the industry’s largest cloud provider after his return last year to AWS from data visualization company Tableau Software.

Keep ReadingShow less
Donna Goodison

Donna Goodison (@dgoodison) is Protocol's senior reporter focusing on enterprise infrastructure technology, from the 'Big 3' cloud computing providers to data centers. She previously covered the public cloud at CRN after 15 years as a business reporter for the Boston Herald. Based in Massachusetts, she also has worked as a Boston Globe freelancer, business reporter at the Boston Business Journal and real estate reporter at Banker & Tradesman after toiling at weekly newspapers.

Image: Protocol

We launched Protocol in February 2020 to cover the evolving power center of tech. It is with deep sadness that just under three years later, we are winding down the publication.

As of today, we will not publish any more stories. All of our newsletters, apart from our flagship, Source Code, will no longer be sent. Source Code will be published and sent for the next few weeks, but it will also close down in December.

Keep ReadingShow less
Bennett Richardson

Bennett Richardson ( @bennettrich) is the president of Protocol. Prior to joining Protocol in 2019, Bennett was executive director of global strategic partnerships at POLITICO, where he led strategic growth efforts including POLITICO's European expansion in Brussels and POLITICO's creative agency POLITICO Focus during his six years with the company. Prior to POLITICO, Bennett was co-founder and CMO of Hinge, the mobile dating company recently acquired by Match Group. Bennett began his career in digital and social brand marketing working with major brands across tech, energy, and health care at leading marketing and communications agencies including Edelman and GMMB. Bennett is originally from Portland, Maine, and received his bachelor's degree from Colgate University.


Why large enterprises struggle to find suitable platforms for MLops

As companies expand their use of AI beyond running just a few machine learning models, and as larger enterprises go from deploying hundreds of models to thousands and even millions of models, ML practitioners say that they have yet to find what they need from prepackaged MLops systems.

As companies expand their use of AI beyond running just a few machine learning models, ML practitioners say that they have yet to find what they need from prepackaged MLops systems.

Photo: artpartner-images via Getty Images

On any given day, Lily AI runs hundreds of machine learning models using computer vision and natural language processing that are customized for its retail and ecommerce clients to make website product recommendations, forecast demand, and plan merchandising. But this spring when the company was in the market for a machine learning operations platform to manage its expanding model roster, it wasn’t easy to find a suitable off-the-shelf system that could handle such a large number of models in deployment while also meeting other criteria.

Some MLops platforms are not well-suited for maintaining even more than 10 machine learning models when it comes to keeping track of data, navigating their user interfaces, or reporting capabilities, Matthew Nokleby, machine learning manager for Lily AI’s product intelligence team, told Protocol earlier this year. “The duct tape starts to show,” he said.

Keep ReadingShow less
Kate Kaye

Kate Kaye is an award-winning multimedia reporter digging deep and telling print, digital and audio stories. She covers AI and data for Protocol. Her reporting on AI and tech ethics issues has been published in OneZero, Fast Company, MIT Technology Review, CityLab, Ad Age and Digiday and heard on NPR. Kate is the creator of RedTailMedia.org and is the author of "Campaign '08: A Turning Point for Digital Media," a book about how the 2008 presidential campaigns used digital media and data.

Latest Stories