There have been rumours for years; there have been presentations, speculations, and occasionally even a minor product launch, but now it is finally happening: the technology giants are making their long-awaited push into healthcare.
As so often, Amazon led the way, paying $3.9bn for One Medical in the US, a primary healthcare organisation that covers almost 800,000 people across 25 states. For Amazon, it is a huge step up in its attack on the medical market. It bought online pharmacy PillPack for $750m in 2018 and since then has started selling through its own pharmacy as well. But this is the first time it has taken control of a major healthcare provider.
Apple has similar ambitions. Last week, the company set out its strategy for making healthcare its next major expansion, with devices, apps and services based around its existing products. There is speculation that it may make a similar acquisition to Amazon. Google has also targeted the industry, as has Meta. Healthcare is shaping up to be a major battleground for some of the world’s biggest and richest companies.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Eyes on the prize
It’s not hard to understand the attractions. In most countries, healthcare provision is inefficient and expensive, with outcomes that could be vastly improved. The sector could certainly use new technology and new ideas, in management and delivery as well as drugs and treatments. And it is a huge industry, accounting for 10% of GDP in most countries, and even more in the US. With populations ageing, it is only going to grow. Even a tiny slice of the market will be valuable.
The problem, however, is that this will take the tech giants into dangerous political territory. “The deal will expand Amazon’s ability to collect the most intimate and personal information about individuals, in order to track, target, manipulate and exploit people in ever more intrusive ways,” warns the Open Markets Institute, an organisation that campaigns for stricter competition regulation.
There is truth in that. It is one thing to monetise our record of browsing for new phones or holidays and then use that information to feed us advertisements or recommendations for different products. That happens all the time, and we more or less accept it as the price we pay for all the free products we get from the internet. It is a different matter to collect and manipulate our health records – there is a reason why doctor-patient relationships have always involved a degree of confidentiality. The tech giants can promise to respect that, but they have been so cavalier with the use of data in the past, and so reckless about finding ways of making money from it, that no one is likely to believe them.
It’s not like slinging books
The political scrutiny will be intense. Even in a relatively free-market system such as the US, the government is a major player and in just about every other developed country in the world it is the dominant force. It’s one thing to disrupt the market in books, music, clothes or food retailing – they are already very competitive markets – it is something else to open up hospital services, GP surgeries, or even pharmacies to new ideas.
On top of all that, doctors everywhere have formed themselves into the fiercest trade unions ever seen. None of them will give up any of their privileges easily, and they invariably have the public on their side. Governments are not going to sit back and see how the dust settles – they will stop the process before it has even started.
The reality is that, if the tech giants become major players, they will invite intense regulatory scrutiny and provoke a political backlash. Most of the major tech companies are already skating on very thin ice, with lots and lots of governments, regulators and activists demanding that they be broken up, that they pay more taxes, and that their power be curbed. Healthcare could easily be the tipping point: the moment when all that talk finally turns into action. It is not worth it – and if the likes of Apple and Amazon don’t get that they will have big problems in the years ahead.
-
Zelenskyy moves to appease Donald Trump – what happens now?Ukraine’s president Volodymyr Zelenskyy is conceding ground to secure the least-worst deal possible, says Emily Hohler
-
Rolls-Royce stock jumps 15% – could it climb further?Aircraft-engine group Rolls-Royce’s CEO has been hailed as a hero for spearheading the firm’s recovery. And the future looks bright, says Matthew Partridge
-
The cybersecurity stocks to buy as the sector boomsTips The consultancy McKinsey estimates that $150bn was spent on cybersecurity in 2021, and that number is only set to grow. Here are the stocks to buy to profit.
-
How to invest in ChatGPT and other AI tech changing the worldOpinion Technology, like ChatGPT, is changing the way we live and work, and this new tool could have a huge impact on the tech industry says Dominic Frisby.
-
Tech stocks have plunged this year, but is now the time to buy?Tips Tech stocks have faced heavy selling pressure this year, although all of these firms have bright futures.
-
Just how powerful is artificial intelligence becoming?Briefings An uncannily human response from an artificial intelligence program sparked a minor panic last month. But just how powerful are machines getting – and should we be worried?
-
What to buy as the tech-stock bull market crashesCover Story The decade-long bull market in tech stocks has come to a rapid halt. Investors need to distinguish solid stocks from speculative ones rather than just buying the dip, says Matthew Partridge
-
Tech stock crash – dotcom bust 2.0 is upon usOpinion It’s carnage in the tech sector as the market crashes. But that spells opportunity for canny investors, says Matthew Lynn
-
Fang tech stocks: Meta and Netflix lose their biteAnalysis Investors treated the Fang tech stocks as almost identical, but two of them are much weaker than the rest, says Philip Pilkington.
-
Alphabet and Microsoft look like gems in the rubble of the tech sectorAnalysis Tech stocks have fallen hard this, with the Nasdaq index down 22% since November. But both Alphabet and Microsoft are still both worth a look, says Rupert Hargreaves.
