Part 2 Current and former personnel describe a cu
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Posted On: 11/27/2023 3:53:56 PM
Part 2
Current and former personnel describe a culture of hubris, fed by the faith that Silicon Valley-style invention could outsmart industry incumbents. Time and again, these people say, Amazon ceded control to managers with little or no health-care experience, often ignoring advice from industry experts recruited to help guide the effort. Debates over strategy consumed years, so by the time Amazon debuted such innovations as online doctor visits, speedy drug delivery and generic drug discounts, they were already commonplace.
Neil Lindsay, the veteran executive who leads Amazon’s Health Services group, disputed elements of that critique. “I actually think that we are approaching this with a lot of humility,” he said in an interview. “We’re going to have some hits and misses, and we’re OK with that experimenting and learning.”
But Wall Street is growing impatient with all the experimentation. Mark Shmulik, an analyst with Sanford C. Bernstein, wrote a research note in June criticizing Amazon for making too many speculative bets outside of the company’s area of expertise, including what he sees as a vague, self-imposed mandate to “figure out health care.” In an interview, Shmulik said the company should narrow its focus and cut spending on health initiatives. “I’m always highly skeptical of trying to take too big of an approach to health care,” he said.
Amazon Chief Executive Officer Andy Jassy has told investors that health care is among the company’s biggest long-term investments, one of just a few areas where success could move the needle for a company expected to generate more than $500 billion in sales this year. Amazon’s health-care efforts stretch back to at least 2015, when the company recruited Kristen Helton to join Grand Challenge, an in-house incubator for the kind of big, outlandish bets that then-CEO Jeff Bezos hoped would propel his company beyond online retail.
A bioengineering PhD, Helton had co-founded a startup that built skin implants designed to monitor oxygen, glucose and other body chemistry markers. Not long after joining Amazon, Helton proposed a primary-care service that would let people see a doctor through an app, with a few taps on their phone. The idea was approved, and she began hiring and putting a team together.
Adhering to long-standing practice, executives borrowed talent from other teams, including the cloud division, and unleashed them on the exciting new project. Brimming with confidence, dozens of managers and software engineers joined Helton’s team. They quickly proposed building many of the health-care industry’s tools from scratch, including prescription-writing software and an electronic health records system. Health-care veterans on staff steered them away from most of those efforts, which they feared would be costly and duplicative, in favor of working on tools that directly impacted primary care. The debates, however, ate up months.
Current and former personnel describe a culture of hubris, fed by the faith that Silicon Valley-style invention could outsmart industry incumbents. Time and again, these people say, Amazon ceded control to managers with little or no health-care experience, often ignoring advice from industry experts recruited to help guide the effort. Debates over strategy consumed years, so by the time Amazon debuted such innovations as online doctor visits, speedy drug delivery and generic drug discounts, they were already commonplace.
Neil Lindsay, the veteran executive who leads Amazon’s Health Services group, disputed elements of that critique. “I actually think that we are approaching this with a lot of humility,” he said in an interview. “We’re going to have some hits and misses, and we’re OK with that experimenting and learning.”
But Wall Street is growing impatient with all the experimentation. Mark Shmulik, an analyst with Sanford C. Bernstein, wrote a research note in June criticizing Amazon for making too many speculative bets outside of the company’s area of expertise, including what he sees as a vague, self-imposed mandate to “figure out health care.” In an interview, Shmulik said the company should narrow its focus and cut spending on health initiatives. “I’m always highly skeptical of trying to take too big of an approach to health care,” he said.
Amazon Chief Executive Officer Andy Jassy has told investors that health care is among the company’s biggest long-term investments, one of just a few areas where success could move the needle for a company expected to generate more than $500 billion in sales this year. Amazon’s health-care efforts stretch back to at least 2015, when the company recruited Kristen Helton to join Grand Challenge, an in-house incubator for the kind of big, outlandish bets that then-CEO Jeff Bezos hoped would propel his company beyond online retail.
A bioengineering PhD, Helton had co-founded a startup that built skin implants designed to monitor oxygen, glucose and other body chemistry markers. Not long after joining Amazon, Helton proposed a primary-care service that would let people see a doctor through an app, with a few taps on their phone. The idea was approved, and she began hiring and putting a team together.
Adhering to long-standing practice, executives borrowed talent from other teams, including the cloud division, and unleashed them on the exciting new project. Brimming with confidence, dozens of managers and software engineers joined Helton’s team. They quickly proposed building many of the health-care industry’s tools from scratch, including prescription-writing software and an electronic health records system. Health-care veterans on staff steered them away from most of those efforts, which they feared would be costly and duplicative, in favor of working on tools that directly impacted primary care. The debates, however, ate up months.
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