Amazon: The Strategy That Didn't Fix Healthcare
A Disruption Platform Bound by an Obsolete Story
Amazon on Friday said it was reorganizing its healthcare business into six pillars in another run at sparking and sustaining a new, really big growth curve from the largest and most lucrative market on Earth.
By conventional measures, you could say Amazon already has a healthy healthcare business. As of June 2025, it was projected to generate approximately $3 billion in revenue for the year, marking a nearly 30% increase from 2023; Amazon Pharmacy is projecting almost $2 billion in revenue, a 45% increase from the previous year, which is not far off from pharmacy benefit management unicorn Capital Rx, which posted $3.5 billion in revenue last year. But “Amazon has struggled to find a consistent strategy in the healthcare market after acquiring PillPack and One Medical and launching some of its own services,” write Ashley Capoot and Annie Palmer for CNBC, which first broke the news.
From their story, Amazon Reorganizes Healthcare Business in Latest Bid to Crack MultiTrillion-Dollar Market:
For the better part of a decade, Amazon has been trying to carve its way into the U.S. health-care market, through billions of dollars worth of acquisitions, big-name hires and high-profile partnerships. It’s been a slog at times, and the company’s long-term strategy hasn’t always been clear.
Following a series of executive departures, Amazon is now restructuring its health business, telling CNBC that Amazon Health Services will be divided into six new units, with a goal of creating a simpler structure.
As part of the effort, the company has tapped a number of longtime Amazon leaders and elevated some One Medical executives to oversee the divisions. Neil Lindsay, senior vice president of Amazon Health Services told CNBC in an interview that the company has been working on the overhaul for the past several months.
“Our leadership team has been focused on simplifying our structure to move faster and continue to innovate effectively,” Lindsay said in a video chat. “One of the problems we’re trying to solve is the fragmented experience for patients and customers that’s common in healthcare.”
That Amazon, like pretty much everyone else with unlimited resources and “no shortage of depth of talent”, has so far failed to crack the mad riddle of healthcare doesn’t surprise me. In early 2021, I published perspective on Fresh Paint following the disbanding of Haven, the joint venture between Amazon, Berkshire Hathaway and JPMorgan Chase. (The announcement of Haven in 2018 sent shockwaves through the medical world, pushing down shares of healthcare companies on fears about how the combined muscle of leaders in technology and finance could wring costs out of the system.)
That piece, Haven: The Strategy That Didn’t Fix Healthcare, argued that if the real objective is economic innovation, a better growth story, the kind that $400 billion/year Amazon will care about, then that ambition will have to be told and sold with a unique industry narrative, communications and content positioned with the ability to inspire and persuade and differentiate. This has nothing to do with “depth of talent” as much as it does changing the primary material conditions for the strategy and imagination to organize that talent and give it focus. And the way that happens is by connecting valuation to a new system of stories, of using different words to think different thoughts.
Words have consequences. Narrative matters. Aswath Damodaran, who teaches corporate finance and valuation at the Stern School of Business at New York University, from one of the sharpest lectures ever on connecting valuation to story.
“With young companies, it’s all about the story.
When I valued Uber in June of 2014, this was a startup still, a young company losing a lot of money, my entire valuation was built around my story about Uber being an urban car service company. That drove my entire valuation.
And when I finished my valuation, one of Uber’s lead investors, Bill Gurley, venture capitalist and leading investor in Uber, said ‘you got the story all wrong’. Uber is not a car service company, it’s a logistics company.
Notice how words have consequences.
By using the word “logistics” notice what he’s done. He’s tripled the size of his business. He said we’re not just urban. We’re going to be everywhere. And he said we’re not just going to have local networking benefits, we’re going to have global networking benefits.
My value for Uber was $6 billion. His value was $53 billion. What separated us was the story he told.”
In my Haven piece, and in much of my writing since, I’ve been arguing that healthcare is at war with cliché, not just clichés of the pen, but clichés of the mind. The unmet need is a different conceptual framework.
In other words (pun intended), the United States can't “fix” healthcare because a $4 trillion market is running on a treadmill of happy-to-glad edits in the PowerPoints.An entire economic system, the foundation to about 25 percent of global GDP, is being managed operationally, not strategically, forced to fit the math and the software already in place, working with a storyline of “cost” and “simplifying insurance” as the defining and dominating theory of "value" shaping go-to-market visions.
The center-of-gravity is the consumption of inputs, not the production of outcomes.
The end result is content and communications sitting at the extreme end of monotonous repetition, bouncing from banality to banality at a massive scale, perpetuating feedback loops that haven’t changed in more than 50 years.
"Patient centricity" anyone?
If the ambition is inventing leverage to displace the status quo, "innovation" will need new words to think new thoughts. It's a positioning thing, not a technology thing, that differentiates and enables new market power.
Until then, the "market access" roadmaps will lead back to the past
We have to start creating with a non-fragmentary worldview, a new connection of elements where the ‘production of health’ is the organizing idea for competition, a new gravity field around which a new system of markets coheres and evolves as a simultaneous whole.
This happens by positioning yourself as a ‘keystone’ partner in the intentional construction of a new industry ecosystem (or a portfolio of them). Ecosystems are about creating the conditions for “trillions of dollars” in opportunity because they solve a cold network problem: they spark a new “body of work [that] is flexible and open for anybody to integrate into,” quoting NVIDIA founder and CEO Jensen Huang in his COMPUTEX keynote in May.
In healthcare, it's not just one market that drives innovation and determines “value” but an infinite flow of them. If you accept that premise as your jumping-off point, then what follows is this simple idea: real strategic advantage goes to the side with the skills to harness a carnival of markets and manage them as a single economic unit collaborating on shared space for growth.
“Ecosystems" are a new orbit for competition and creative leadership.
Constructed and managed the right way (the term of art here is ‘assembly rules’), they have the power to reset how a market works; or, like LillyDirect, they have the ‘kinetic potential’ to become a channel themselves, a new center-of-gravity around which entire categories of products and services are drawn into and start rotating.
The process knowledge to construct and sustain a new industry ecosystem -- to intentionally make other industries and markets a feature of your economic system (something called “featurizing”, which is what Amazon knows how to do better than anyone else -- is a different kind of expertise for brand, creative and technical management.
Amazon is a platform for disruption. It’s problem with healthcare is that it’s not thinking big enough.
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/ jgs
John G. Singer is Executive Director of Blue Spoon, the global leader in positioned strategy at a system level. Blue Spoon specializes in constructing new industry ecosystems.