Amazon, Berkshire Hathaway and JPMorgan Chase hire Monitor Deloitte

12 October 2018

The healthcare cost-cutting venture launched by the three companies in January of this year has hired Deloitte Monitor for strategic guidance. The consultancy will specifically address how to cut healthcare costs and create better outcomes for chronically ill workers.

Earlier this year, Amazon announced that it had entered into a healthcare venture with conglomerate Berkshire Hathaway and bank JP Morgan. The venture is reportedly concerned with lowering healthcare costs for the three companies’ million-plus employees, but it is probable that Amazon and co. will look to shake up the healthcare sector to an even wider degree.

Analysts believe that the firm has the right competencies to be successful in its disruption of the healthcare industry – digital innovation, customer experience, data and analytics. The firm has been successful in its various expansions, from books to pretty much all retail categories, while developing leading competencies in artificial intelligence and cloud computing. There are also rumors that Amazon will be moving into the banking space in the near future. 

Amazon has already started making Prime Now drug deliveries in Japan. In the US, the e-retailer is already selling medical supplies and equipment, as well as restricted-access products to licensed health organizations. The firm is also looking to encroach on mail-order pharmacies, having obtained wholesale distribution approval from a dozen state pharmaceutical boards. Meanwhile, Whole Foods offers a base for possible local pick-up pharmacies.Amazon, Berkshire Hathaway and JPMorgan Chase hire Monitor DeloitteThe firm’s Alexa AI-powered devices offer the possible basis for telemedicine health services. Machine learning Echo devices also hold the promise of being turned into home diagnostic tools: the Mayo Clinic, for example, has already integrated Alexa’s ability to provide first-aid information and voice-driven self-care instructions.

Analysts at LEK Consulting expect Amazon to use the venture agreement as a sandbox to test further solutions before moving aggressively into the healthcare space – including the areas of medical supplies, retail pharmacy, telemedicine, and AI diagnostics.

Now, the tripartite healthcare venture has hired Monitor Deloitte – the multinational strategy consulting practice of Deloitte Consulting. Founded in 1983 by six entrepreneurs with ties to the Harvard Business School, including noted business academic Michael Porter, the Boston-based strategy firm Monitor Group was purchased in 2013 by Deloitte following a downturn in business due to the financial crisis.

Monitor Deloitte will be tasked with developing a strategy for lowering healthcare costs by improving care of chronically ill patients, according to life science magazine STAT. As part of the healthcare venture’s aim to lower healthcare costs for their 1.2 million combined employees, Deloitte Monitor will strategize how to make it easier and cheaper for chronically ill workers to access care.

Tackling the problem effectively is an important issue, since 75% of health care costs are due to chronic conditions, according to the US Centers for Disease Control.

As part of its work, the consultancy will look to depress costs by identifying interventions likely to be taken up by chronically ill workers, while evaluating and recommending the most suitable technology solutions.

Meanwhile, the health venture partnership between Amazon, Berkshire Hathaway, and JP Morgan will continue to strategize how to tackle healthcare waste in three broad areas for its employee base: administrative costs, high prices, and improper healthcare usage.

The venture’s current CEO is Dr Atul Gawande, a surgeon at Boston’s Brigham and Women’s Hospital, who received national attention for an article he wrote in The New Yorker about healthcare costs. Recently, former Comcast executive Jack Stoddard was hired as the venture’s Chief Operating Officer. Stoddard previously held roles at Optum (a UnitedHealth subsidiary) and Accolade, a consumer healthcare engagement firm.


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Google topples Apple to take top spot on BCG's list of innovative firms

28 March 2019

After ranking first on strategy consultancy Boston Consulting Group (BCG)’s top innovators list for 13 years, Apple has finally been knocked off the top spot, landing at third place.

Google usurped Apple’s crown, and Amazon rose to second place on BCG's ranking of the top 50 global innovators. Microsoft and Samsung rounded out the top five, with Netflix, IBM, Facebook, Tesla, and Adidas filling out the top 10. BCG’s ranking was based on a global survey of more than 2,500 senior innovation leaders.

Tech firms dominated the top end of the innovators list. Traditional industries, however, still accounted for more than half of the top 50: Adidas, Boeing, BASF, Johnson & Johnson, and DowDuPont all ranked in the top 15.

The rising importance of digital technology – including artificial intelligence (AI), platforms, and ecosystems – was the central touchpoint of BCG’s survey. Top innovators are increasingly embracing AI in particular to develop new products and services, and to improve the internal innovation process itself.

"Digital technology and external innovation have become watchwords," Ramón Baeza, a BCG senior partner and the report's coauthor, said. "All of the top 10 companies – and many in the top 50 – use AI, platforms, and ecosystems to enable themselves and others to pursue new products, services, and ways of working."

2019 Most Innovative Companies

Platforms provide a foundation on which companies can develop their business offerings, with Amazon Web Services (AWS) and Microsoft's Azure offering some of the leading cloud-based platform services. According to BCG, ecosystems go a step further, pulling together technologies, apps, platforms and, other services to build an integrated solution. Android and iOS, for example, are now a complex ecosystem of telecoms, phone manufacturers, and app developers. AI, meanwhile, simulates human intelligence to achieve groundbreaking new technologies such as self-driving cars and "smart" digital assistants.

The top firms on BCG’s list extensively use AI, platforms, and ecosystems. Google has invested heavily into AI, which is apparent in the company's smart speaker Google Home, the accurate autocompletion of sentences in Gmail, or in its autonomous driving venture. Android, meanwhile, is a truly expansive ecosystem.

Amazon utilizes the cutting-edge Alexa AI voice technology as well as the widely used AWS platform. Apple offers Siri and iOS.

Of survey respondents, 90% said their firms are investing in AI, with more than 30% expecting it to be the innovation area with the highest impact on the businesses in the next three to five years.

Just under 20% of respondents said their companies were strong innovators and above average in AI innovation (what BCG terms "AI leaders"). Among the subgroup of AI leaders, 94% said they see AI as important to their companies’ future growth, as opposed to 56% of AI "laggards" (who rate their AI capabilities as below average).

"AI will have a significant impact on business processes, but its biggest potential lies in developing new products and services that can yield major revenue streams over time," Michael Ringel, a BCG senior partner and the report's coauthor, said.

Which areas of innovation are you actively targeting?

McDonald’s (21st on the list) is using AI algorithms on digital menus that change according to time of day, restaurant traffic, and the weather. Philips (29th) last year launched an AI platform that allows healthcare industry workers to access advanced analytics that curate and analyze healthcare data.

AI is already unlocking value for advanced users: 46% of AI leaders said AI-enhanced products and services represented 16% of sales, versus 10% for laggards.

In a world of platforms and ecosystems, the BCG report found partnership models are gaining steam. Strong innovators have upped their partnership usage from 2015-18, with incubator use rising from 59% to 75%, academic partnerships from 60% to 81%, and company partnerships from 65% to 83%.

Platforms and ecosystems help facilitate innovation, while expanding reach and collaboration, allowing for stronger, multiparty solutions. “Not all ecosystems are alike, however. They have different types of glue that bind their participants. Money is one type, of course, but knowledge, data, skills, and community can be equally important," Florian Grassl, BCG partner and report coauthor, said.

Four companies on 2018's top 10 list were also in the top 10 in 2005: Google, Amazon, Microsoft, and IBM. BCG deems these companies “serial reinventors,” which sets them up well for continued innovation dominance. Google continues to revise its offerings and algorithms, Amazon disrupts new categories and builds new services, and Microsoft and IBM have successfully transitioned into cloud-based services.

"The tools and technologies of innovation evolve,” BCG’s report states. “The basic orientation toward change – never being satisfied and always being willing to reinvent oneself – remains part of some companies’ lifeblood.”