My thoughts on understanding the Amazon trap!

When Amazon and Toys “R” Us inked a deal to allow Amazon to be the online retailer for the once-mighty, brick and mortar toy giant, it seemed like a perfect deal. Each company could continue to focus on its own core strength.

The result was much different. Amazon broke the deal and allowed others to start to sell toys on its site, and Toys “R” Us soon found themselves in need of building an online presence to hock its wares. The result? Amazon is still the place to go to find toys and former Toys “R” Us stores are empty relics.

So, what happens when Amazon, Berkshire Hathaway, and JPMorgan Chase formed Haven Healthcare? They announce deals wth Cigna and Aetna to offer health plans to 30,000 JP Morgan workers in the test markets of Arizona and Ohio. And do they expect a different result? This is a classic dissociation between ‘new economy’ approaches and ‘old economy’ thinking.

It is the DNA of Haven to re-invent and replicate.

I have no doubt that the combined genius of Bezos, Dimon, and Buffett will create an innovative insurance platform. If Amazon continues to lead the momentum behind Haven, I have no doubt it will build this new platform of the best parts of the current system. Focusing on efficiencies, cost-savings, and removing the ‘middleman’. The only result, then, will be Haven marching forward and creating a marketplace that it owns with offerings around referenced-based pricing and direct contracting. '

Its partners will continue to see themselves as partners until the day that they realize that they have been rendered irrelevant by progress.

By the time Aetna and Cigna figure this out, it may be too late for them to catch up.

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