The current state of healthcare in the United States is ripe for disruption. Patients and employers alike are frustrated with the rising costs of healthcare and the complexities of the system. And three large corporations—Amazon, Berkshire Hathaway, and JPMorgan Chase—are primed to be that disruptive force, as they create an independent healthcare company for their combined 840,000 employees. While this collaborative health insurance company will be specifically for company employees, any successes are expected to become models for other businesses.
Time to Focus on Wellness
The conundrum in healthcare is that in a fee-for-service model, wellness is not well reimbursed, if at all. In contrast, these three companies could see large profits from wellness incentives that reduce the healthcare needs of their employees. While other companies have tried this, none have succeeded because of the entangled healthcare system. However, the announcement that these specific behemoths are joining together has raised eyebrows and plunged stocks for other insurance companies such as United Health and Anthem.
Whole is Better than Sum of the Parts
These three companies bring together different strengths, and likely have the power and money to collaboratively pull this off. Amazon is well recognized for disrupting the status quo, and its CEO, Jeff Bezos, is known for his savvy in cloud platform use. Berkshire Hathaway is a multinational conglomerate holding company and the largest financial services company in the world, and its CEO, Warren Buffet, has expertise in the insurance market. JPMorgan Chase is the largest U.S. bank, and its CEO, Jamie Dimon, has the expertise to finance large-scale, disruptive innovation. While details are unknown, the group has publicly stated that its healthcare company will be “free from profit-making incentives and constraints.”(1)
Speculations About Their Plan
There is great speculation about what this endeavor will entail. Between these three companies, the group has data regarding consumer choices, knowledge of how healthcare insurance works, and financial security.(1) There will most likely be an employee incentive program of some sort. Some speculate that wearable devices may be used as part of patient tracking.(2)
Former Apple CEO John Sculley points out that the antiquated technology rampant among healthcare systems is insufficient to address the 20-25% waste in health plans, but he believes the combined expertise of these three companies can use updated technologies, such as enterprise process automation and artificial intelligence tools, blended with value-based care, to make vast improvements.(3)
Imagine a healthcare future where you can ask Amazon’s Alexa to set up a doctor’s appointment or connect to a health wearable and send that data to your provider. Patients today are demanding these types of interactive, mobile technologies, and this conglomerate may be one way to deliver. However it shapes up, these three bring “unparalleled technological brilliance, rare business acumen, deep understanding of financial markets, and deep pockets” to healthcare.(4) No doubt, if they succeed, they will set the bar for others to follow suit.
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1. Wingfield, N., Thomas, K., & Abelsonjan, R. (2018, January 30). Amazon, Berkshire Hathaway and JPMorgan team up to try to disrupt health care. NY Times. Retrieved from https://www.nytimes.com/2018/01/30/technology/amazon-berkshire-hathaway-jpmorgan-health-care.html
2. Friedman, B. (2018). Three major corporations will form healthcare company for their employees. Lab Soft News. Retrieved from http://archive.feedblitz.com/47377/~5953629/26569000/9291057933d5d79f22343f98fc673804
3. Spitzer, J. (2018, February 1). What former Apple CEO John Sculley had to say about the Amazon-JPMorgan-Berkshire Hathaway collaboration. Becker’s Hospital Review. Retrieved from https://www.beckershospitalreview.com/hospital-management-administration/what-former-apple-ceo-john-sculley-had-to-say-about-the-amazon-jpmorgan-berkshire-hathaway-collaboration.html
4. Blumenthal, D. (2018, February, 5). Can three of America’s most innovative business minds really transform health care? The Hill. Retrieved from http://thehill.com/opinion/healthcare/372074-can-three-of-americas-most-innovative-business-minds-really-transform
Kim Futrell, MT(ASCP)
March 23, 2018