*By Nora Ali* Major players in retail and tech are shaking up the health care industry. Walgreens Boots Alliance ($WBA) and Microsoft ($MFST) announced a partnership this month to explore technological advances in health care services, including an agreement for Walgreens to use Microsoft’s Azure as its cloud provider. But just as some new unions in the industry are forming, others have shown signs of instability. In the same week, Walmart ($WMT) and CVS ($CVS) suggested their partnership would end ー a glaring signal of CVS’s negotiating power and its desire to lower health care costs after acquiring Aetna for $70 billion. Days later, Walmart and CVS agreed to resolve their differences for the sake of their many customers. But as companies try to snatch a piece of the health care pie, one player that seems to dominate any industry it enters is already proving its might: Amazon. As retailers jockey for position, the question looms: will Amazon ($AMZN) triumph over its peers in health care, too? **Walmart vs. Amazon** Walmart and Amazon are arguably each other’s biggest competitors in the retail space, but the health care arena presents their latest, and perhaps largest, battleground. Walmart discussed an acquisition with insurer Humana last year, which would turn Walmart into one of the country’s largest health insurers. Meanwhile, Amazon announced a partnership with Berkshire Hathaway and JPMorgan Chase ($JPM) early last year, with a goal of reducing employees’ health care costs and transforming the industry. The tech giant [acquired PillPack](https://cheddar.com/videos/amazon-acquisition-of-pillpack-crushes-shares-of-walgreens-cvs-rite-aid), which would open the doors for prescription delivery across the country, and it filed a patent for its Alexa assistant to detect users’ sickness and recommend medications. While Amazon has recently taken significant steps to tackle health care, Walmart still has one major advantage: physical space. With around 4,700 pharmacy locations, Walmart is one of the largest pharmacy chains in the U.S. In addition to prescription fulfillment, it gives customers access to basic health care services like flu shots and immunizations. Amazon only has several hundred physical locations under its umbrella, the majority of which are the Whole Foods stores it acquired in 2017. Amazon may lag behind Walmart in health care services at the moment, but it’s well on its way to catching up. **How, and Why, Amazon Will Win** Amazon recently announced its plan to open 3,000 cashier-less Amazon Go stores by 2021, which could be a game changer in health care ー both for the company and its customers. After these locations open, customers will gain the ability to pick up prescriptions, receive basic health care services ー and grab lunch in between. Since customers will need an Amazon account to purchase anything from these stores, the company will unlock a treasure trove of health-related data about its members, which will allow it to issue more robust, specific product recommendations and lure more advertisers to the platform. Amazon could also transform health care in the form of greater transparency. A recent Trump administration order requires hospitals to list prices of procedures, but thus far, the experience for patients has been suboptimal ー reported problems have ranged from formatting issues to inflated prices. With its powerful AWS cloud infrastructure and decades of experience handling massive quantities of data, Amazon could raise the accessibility of hospital prices and even help digitize the archaic system of patients’ health care data as it travels across providers and systems. Health care offerings might even be the tipping point for non-Prime members to convert and finally buy that coveted membership. Amazon just cleared the 100 million Prime subscriber mark in the U.S., according to a [CIRP](https://files.constantcontact.com/150f9af2201/a37a79a7-0eff-4a38-b05a-ce3c459addc2.pdf) study, which also found that Amazon Prime members averaged $1,400 in spending, more than double what non-Prime members spend. These numbers support the notion that the Prime subscription remains the most critical piece of Amazon’s commerce strategy. If retail and content offerings don’t lure subscription resistors, then affordable health care services just might. **How Does Anyone Confront Amazon?** As is the case for many big partnerships, the newly announced deal between Walgreens and Microsoft has an obvious counter-Amazon undercurrent. Walgreens competes with Amazon from both a health care and retail standpoint. Amazon’s e-commerce business continues to seize customers away from drug stores like Walgreens, where they would normally pick up household essentials; and if Amazon triumphs over health care, it poses an obvious threat to drugstores. For cloud and technology services, it only made sense for Walgreens to partner with another tech behemoth that is decidedly not Amazon, but is quickly gaining speed in the cloud space: Microsoft Azure. Walgreens’ alliance with Microsoft is also important because it prevents Amazon from accessing Walgreens and Duane Reade locations across the country ー which could serve as mini-distribution centers, pickup locations, or technological testing hubs. Microsoft, on the other hand, could leverage these stores to expand its own in-store technology. The theme is clear: If you’re not Amazon, you’re going to team up with other companies that are eager to dethrone the tech giant. In addition to its partnership with Microsoft, Walgreens has inked a deal with Kroger ($KR), a competitor to Amazon in the grocery space. Kroger has also partnered with Microsoft to create a grocery store of the future ー to take Amazon head-on in the cashier-less and tech-driven stores space. Walmart has partnered with Microsoft to use the latter’s cloud services. Walmart and Target ($TGT) advertise with Google ($GOOG) and Facebook ($FB), but certainly not with Amazon. Apple ($AAPL), who competes with Amazon in content and hardware, is teaming up with Samsung, another hardware competitor, to offer its content on Samsung smart TVs. On Thursday, Microsoft said it inked a three-year cloud agreement with supermarket chain, Albertsons. The list goes on. The velocity with which Amazon’s competitors, in different industries, team up will only increase as Amazon continues to grow and enter new verticals. As it tends to be in any industry it enters, Amazon is a giant in the room trying to reinvent a space that desperately needs re-inventing. The U.S. government spends over $3 trillion annually on health care and many of the sector’s practices are dramatically outdated. As Amazon continues to dominate retail, own cloud services, and catch up to Facebook and Google in advertising, the tech giant will presumably transform ー and eventually conquer ー the next industry ripe for change: taking care of our health.
