The CEO of one of the nation's largest health insurers has a warning for Amazon on its healthcare ambitions

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The CEO of one of the nation's largest health insurers has a warning for Amazon on its healthcare ambitions

Paul Markovich CEO Blue Shield

Blue Shield California

Paul Markovich, the CEO of health insurer Blue Shield California, has been keeping close tabs on Amazon.

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It's been six months since the still unnamed healthcare venture among e-commerce giant Amazon, conglomerate Berkshire Hathaway, and multinational bank JPMorgan Chase named a CEO.

Under physician and writer Atul Gawande, Jeff Bezos, Warren Buffett, and Jamie Dimon have outlined bold ambitions for their first-of-its kind initiative: improving care and slashing costs for their companies' combined 1.2 million employees and, perhaps eventually, for all Americans. But details about the plan have been scant.

Still, members of the triumvirate (nicknamed ABC for short) have been making rapid-fire moves into the health space since the summer. Amazon, for instance, bought online pharmacy startup PillPack for just under $1 billion, suggesting that at least one part of its future healthcare play would involve medications. Last month, Amazon rolled out an online tool to analyze patient medical records.

Paul Markovich, the CEO of health insurer Blue Shield of California, has been keeping close tabs on Amazon, he told Business Insider, along with other tech giants like Apple and Google.

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Overall, he sees those companies' forays into healthcare as a positive step toward creating more efficiency and better customer service, he said.

"Honestly I think the more players that we have trying to figure out better models that are more efficient with a better customer experience and higher quality, hallelujah," said Markovich.

Read more: Meet the surgeon, professor, and writer tapped to run the Amazon-JPMorgan-Berkshire Hathaway health venture

But Markovich also has a warning for tech giants like Amazon, who he said may be forgetting to prioritize one key component of the healthcare equation: privacy.

An 'admonition' to tech giants including Amazon

Amazon Echo Dot

Jeff Chiu/AP

Amazon recently filed a patent aimed at enabling voice assistant Alexa to detect when a user is sick.

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Many of Amazon's health moves involve highly sensitive customer data - data which Markovich doesn't believe is necessarily being treated with as much care as it should.

Shortly after Amazon, Berkshire and JPMorgan revealed plans to bring on Comcast digital health manager Jack Stoddard as operating chief of their endeavor, Amazon filed a patent aimed at enabling voice assistant Alexa to detect when a user is sick. The following month, Amazon announced a new service called Comprehend Medical that uses machine learning to analyze data from patient health records for hospitals, insurers, and drug companies.

"One of the things, I'd say an admonition, to all those companies including Amazon is that the privacy standards around data are a lot higher in healthcare than they are in other businesses," Markovich said.

"And what I've seen in my interactions with them is that the sensitivity isn't necessarily there."

While Markovich acknowledged that today's healthcare system is far from perfect, one of its strengths is the high bar placed on patient privacy. He said privacy has become an embedded part of physician and provider culture thanks to the Health Insurance Portability and Accountability Act, the Clinton-era law that protects patient medical information.

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"We're culturally steeped in what the acronym HIPAA stands for and means," Markovich said. "I think if [companies like Amazon] are going to be successful, there needs to be more cultural sensitivity to the bar being a lot higher on privacy and security."


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