Amazon, big finance spearhead healthcare effort without 'profit-making incentives'

Posted:
in General Discussion edited January 2018
Amazon, Berkshire Hathaway, and JPMorgan Chase have announced plans to develop a program to pare down health care costs initially for their own employees, but with a suggestion that it could expand the effort to the rest of Americans in the future.




Few details of the program are publicly known at the moment. All three firms note that they have done little prior to the announcement beyond assigning an executive in charge at each company, but the releases accompanying the news say that "technology solutions" developed by a stand-alone company will be applied first to simplify health care.

"The ballooning costs of healthcare act as a hungry tapeworm on the American economy. Our group does not come to this problem with answers," Berkshire Hathaway Chief Executive Warren Buffet saidt. "But we also do not accept it as inevitable. Rather, we share the belief that putting our collective resources behind the country's best talent can, in time, check the rise in health costs while concurrently enhancing patient satisfaction and outcomes."

While limited at first to the 1.1 million employees spanning the three companies, there are suggestions that the effort will expand to the rest of the country, should it prove successful.

"Our people want transparency, knowledge and control when it comes to managing their healthcare," JPMorgan Chase Chief Executive Jamie Dimon said. "The three of our companies have extraordinary resources, and our goal is to create solutions that benefit our U.S. employees, their families and, potentially, all Americans."

Rumors have swirled for years regarding Amazon's entry into the market, either as a vendor for inexpensive prescription drugs, or as part of a larger role.

"The healthcare system is complex, and we enter into this challenge open-eyed about the degree of difficulty," Amazon Chief Executive Jeff Bezos said. "Hard as it might be, reducing healthcare's burden on the economy while improving outcomes for employees and their families would be worth the effort."

The spin-off company responsible for deploying the technical solutions at first will be run by Amazon Senior Vice President Beth Galetti, Todd Combs from Berkshire Hathaway, and JPMorgan Managing Director Marvelle Sullivan Berchtold.

At present, it isn't clear if external solutions like Apple's health record initiative, or Apple Watch data, will be integrated into any solution accepted by the company. Regardless, the move by Amazon and the finance companies may open acceptance to disruption of existing healthcare solutions to more people and organizations, instead of Apple having to try to pry open doors itself.
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Comments

  • Reply 1 of 85
    I don't think I'd want my employer to be my healthcare provider.  Especially one known for its mastery of mining data.  I'd certainly want the strongest of firewalls between the healthcare side and the HR side.
    jahbladeraoulduke42palomine
  • Reply 2 of 85
    I knew it, I knew it, I knew it! I’ve been saying for years, ‘get rid of this horrendous ACA, deregulate healthcare and businesses will provide answers’. I assumed Walmart, Amazon, Google/Alphabet and Apple would be among those jumping in and Bezos just made the first move. Expect Amazon stock to be richly rewarded and Apple stock to be kicked in the teeth for their timidity.

    Personally, I’d be more comfortable trusting Apple with my healthcare, but Amazon gets the first mover advantage... again.
    edited January 2018 designrairnerddasanman69
  • Reply 3 of 85
    It has happened before.  The original Kaiser health plan was intended for employees of Kaiser Steel company in California.  It has morphed into one of the largest and best health care systems.
    edited January 2018 randominternetpersonSpamSandwichsandordasanman69
  • Reply 4 of 85
    I don't think I'd want my employer to be my healthcare provider.  Especially one known for its mastery of mining data.  I'd certainly want the strongest of firewalls between the healthcare side and the HR side.
    But give people the chance to save (potentially) thousands of dollars annually on healthcare and they’ll be customers for life. With Amazon’s general reputation for quality and low price (not always the case, I know) they could easily dominate a new type of healthcare system for people. I expect big things fast when Amazon gets involved.
    MacProdesignrmuthuk_vanalingamdasanman69
  • Reply 5 of 85
    This really could swing either way - companies will have a far greater incentive to focus on preventative health care, which is far more cost effective that the treatments cost years or decades later (smoking, sugar intake, lack of exercise, regular checkups). Also if they can do something about the insane cost of healthcare in the US, than can only be a good thing. Insurance companies have never addressed that.

    On the other hand, your employer knowing everything about your health might not be a good thing. You can see a future where compensation, promotion and other decisions could be made with health considerations in mind, or even decisions about lay-offs. Employees could be more dependent than ever on their employers (COBRA isn't great but it can give you a cushion) so losing your job or quitting because of some unacceptable factor at work, would cost you more than ever.

    Of course, the fact that this is even something they need to consider doing, because healthcare in this county is such a freaking mess, is the real tragedy.
    steven n.randominternetpersonpalomine
  • Reply 6 of 85
    Mike WuertheleMike Wuerthele Posts: 4,604administrator
    I knew it, I knew it, I knew it! I’ve been saying for years, ‘get rid of this horrendous ACA, deregulate healthcare and businesses will provide answers’. I assumed Walmart, Amazon, Google/Alphabet and Apple would be among those jumping in and Bezos just made the first move. Expect Amazon stock to be richly rewarded and Apple stock to be kicked in the teeth for their timidity.

    Personally, I’d be more comfortable trusting Apple with my healthcare, but Amazon gets the first mover advantage... again.
    This wasn't disallowed during ACA's tenure, and I think your assumptions about Apple stock because of timidity are... an over-reach.
    edited January 2018 StrangeDaysraoulduke42dasanman69palomine
  • Reply 7 of 85
    This really could swing either way - companies will have a far greater incentive to focus on preventative health care, which is far more cost effective that the treatments cost years or decades later (smoking, sugar intake, lack of exercise, regular checkups). Also if they can do something about the insane cost of healthcare in the US, than can only be a good thing. Insurance companies have never addressed that.

    On the other hand, your employer knowing everything about your health might not be a good thing. You can see a future where compensation, promotion and other decisions could be made with health considerations in mind, or even decisions about lay-offs. Employees could be more dependent than ever on their employers (COBRA isn't great but it can give you a cushion) so losing your job or quitting because of some unacceptable factor at work, would cost you more than ever.

    Of course, the fact that this is even something they need to consider doing, because healthcare in this county is such a freaking mess, is the real tragedy.
    Regarding your last paragraph, the US isn’t the USSR. We don’t need or want Government Healthcare. There is nothing that can be done by the private sector that cannot be made worse when the Federal government gets involved. The entire insurance and healthcare industries are ripe for massive deregulation and innovation shakeups. People will (against current beliefs) come to see that less interference is better and more competition is much better.

    https://blogs.wsj.com/moneybeat/2018/01/30/the-amazon-effect-rattles-health-care-stocks/
    edited January 2018 mike1designr
  • Reply 8 of 85
    I knew it, I knew it, I knew it! I’ve been saying for years, ‘get rid of this horrendous ACA, deregulate healthcare and businesses will provide answers’. I assumed Walmart, Amazon, Google/Alphabet and Apple would be among those jumping in and Bezos just made the first move. Expect Amazon stock to be richly rewarded and Apple stock to be kicked in the teeth for their timidity.

    Personally, I’d be more comfortable trusting Apple with my healthcare, but Amazon gets the first mover advantage... again.
    Hmm yah I don’t think you’ll be so hoorah when your employer decides the treatments you want cut too close to the bottom line. 

    I see less reason to trust my employer with making the best decisions for my health when it can be against their interests to do so. 
    palomine
  • Reply 9 of 85

    This really could swing either way - companies will have a far greater incentive to focus on preventative health care, which is far more cost effective that the treatments cost years or decades later (smoking, sugar intake, lack of exercise, regular checkups). Also if they can do something about the insane cost of healthcare in the US, than can only be a good thing. Insurance companies have never addressed that.

    On the other hand, your employer knowing everything about your health might not be a good thing. You can see a future where compensation, promotion and other decisions could be made with health considerations in mind, or even decisions about lay-offs. Employees could be more dependent than ever on their employers (COBRA isn't great but it can give you a cushion) so losing your job or quitting because of some unacceptable factor at work, would cost you more than ever.

    Of course, the fact that this is even something they need to consider doing, because healthcare in this county is such a freaking mess, is the real tragedy.
    Regarding your last paragraph, the US isn’t the USSR. We don’t need or want Government Healthcare. There is nothing that can be done by the private sector that cannot be made worse when the Federal government gets involved. The entire insurance and healthcare industries are ripe for massive deregulation and innovation shakeups. People will (against current beliefs) come to see that less interference is better and more competition is much better.

    https://blogs.wsj.com/moneybeat/2018/01/30/the-amazon-effect-rattles-health-care-stocks/
    Enron. We can come up with plenty of examples where the private sector screwed up when it’s in their interest to do so. Federal government, oversight, and regulation fulfill valid job-to-be-done use cases. 
    edited January 2018 roundaboutnowraoulduke42jony0palomine
  • Reply 10 of 85
    I knew it, I knew it, I knew it! I’ve been saying for years, ‘get rid of this horrendous ACA, deregulate healthcare and businesses will provide answers’. I assumed Walmart, Amazon, Google/Alphabet and Apple would be among those jumping in and Bezos just made the first move. Expect Amazon stock to be richly rewarded and Apple stock to be kicked in the teeth for their timidity.

    Personally, I’d be more comfortable trusting Apple with my healthcare, but Amazon gets the first mover advantage... again.
    Hmm yah I don’t think you’ll be so hoorah when your employer decides the treatments you want cut too close to the bottom line. 

    I see less reason to trust my employer with making the best decisions for my health when it can be against their interests to do so. 
    You’re making the classic mistake of thinking this particular announcement is the end of it. This is just the beginning. Expect a lot of assumptions about what is or isn’t “healthcare” to be challenged.
    designr
  • Reply 11 of 85
    steven n.steven n. Posts: 1,118member
    While I see Bezos somewhat as a snake oil salesman, this is a great concept. The ACA has increased my premiums by 450% in the last 2 years so anything attempting to reign this in is welcomed.
    edited January 2018 randominternetpersongatorguy
  • Reply 12 of 85

    This really could swing either way - companies will have a far greater incentive to focus on preventative health care, which is far more cost effective that the treatments cost years or decades later (smoking, sugar intake, lack of exercise, regular checkups). Also if they can do something about the insane cost of healthcare in the US, than can only be a good thing. Insurance companies have never addressed that.

    On the other hand, your employer knowing everything about your health might not be a good thing. You can see a future where compensation, promotion and other decisions could be made with health considerations in mind, or even decisions about lay-offs. Employees could be more dependent than ever on their employers (COBRA isn't great but it can give you a cushion) so losing your job or quitting because of some unacceptable factor at work, would cost you more than ever.

    Of course, the fact that this is even something they need to consider doing, because healthcare in this county is such a freaking mess, is the real tragedy.
    Regarding your last paragraph, the US isn’t the USSR. We don’t need or want Government Healthcare. There is nothing that can be done by the private sector that cannot be made worse when the Federal government gets involved. The entire insurance and healthcare industries are ripe for massive deregulation and innovation shakeups. People will (against current beliefs) come to see that less interference is better and more competition is much better.

    https://blogs.wsj.com/moneybeat/2018/01/30/the-amazon-effect-rattles-health-care-stocks/
    Enron. We can come up with plenty of examples where the private sector screwed up when it’s in their interest to do so. Federal government, oversight, and regulation fulfill valid job-to-be-done use cases. 
    The Federal government wasn’t in the same business as Enron and nothing improved after the Feds got involved!
  • Reply 13 of 85
    rob53rob53 Posts: 2,032member
    Companies used to self-insure their employees before healthcare costs exploded. There are several groups to blame for the ridiculous increase in costs, in no particular order, greedy doctors, greedy insurance companies, greedy doctor's medical groups, Wall Street, and greedy prescription companies. Blaming ACA (@SpamSandwich) doesn't get to the root cause. Starting to cover your own employees hopefully would get rid of the money-sucking middle companies, especially the insurance companies. All you have to do is look at the insane profits companies like Anthem (market cap of $62B, stock price 400% increase in last 5 years) makes for pushing paper to understand where the problem lies. You can complain all you want about socialized medicine and government waste but your medical insurance costs are driven by Wall Street greed and not by our government. Why are so many people involved in paying our medical bills? Every extra person who touches that money takes their cut and they don't deserve it. Get rid of these companies and costs would go down--as long as one of the other middle companies doesn't do a money grab to keep it where it is. 

    The larger problem is insurance companies are treated like banks, too big to fail. More and more companies are being added to that list making it very difficult to streamline any business to save consumers money. (Take consumers either way you want, plural or possessive.) I hope these companies can actually find a way to reduce medical costs but is they simply take a short cut and continue to outsource their medical accounts handling to an insurance company they haven't improved anything.


    Folioroundaboutnow
  • Reply 14 of 85
    rob53 said:
    Companies used to self-insure their employees before healthcare costs exploded. There are several groups to blame for the ridiculous increase in costs, in no particular order, greedy doctors, greedy insurance companies, greedy doctor's medical groups, Wall Street, and greedy prescription companies. Blaming ACA (@SpamSandwich) doesn't get to the root cause. Starting to cover your own employees hopefully would get rid of the money-sucking middle companies, especially the insurance companies. All you have to do is look at the insane profits companies like Anthem (market cap of $62B, stock price 400% increase in last 5 years) makes for pushing paper to understand where the problem lies. You can complain all you want about socialized medicine and government waste but your medical insurance costs are driven by Wall Street greed and not by our government. Why are so many people involved in paying our medical bills? Every extra person who touches that money takes their cut and they don't deserve it. Get rid of these companies and costs would go down--as long as one of the other middle companies doesn't do a money grab to keep it where it is. 

    The larger problem is insurance companies are treated like banks, too big to fail. More and more companies are being added to that list making it very difficult to streamline any business to save consumers money. (Take consumers either way you want, plural or possessive.) I hope these companies can actually find a way to reduce medical costs but is they simply take a short cut and continue to outsource their medical accounts handling to an insurance company they haven't improved anything.


    “Greed” isn’t a root cause of the massive spike in costs, regulation and real market competition interference is the root cause. Everyone, and I mean EVERYONE, is individually self-interested, whether they are willing to admit this fundamental truth or not.

    When COMPETITION instead of top-down control is involved, it is competition that squeezes out that self-interest which serves immediate needs in favor of long-term mutual self-benefit.

    If there was no competition and unlimited demand for cell phones, a single cell phone company could charge anything it wanted for a phone and there would be nothing anyone could do about it.
    edited January 2018
  • Reply 15 of 85
    I knew it, I knew it, I knew it! I’ve been saying for years, ‘get rid of this horrendous ACA, deregulate healthcare and businesses will provide answers’. I assumed Walmart, Amazon, Google/Alphabet and Apple would be among those jumping in and Bezos just made the first move. Expect Amazon stock to be richly rewarded and Apple stock to be kicked in the teeth for their timidity.

    Personally, I’d be more comfortable trusting Apple with my healthcare, but Amazon gets the first mover advantage... again.
    Hmm yah I don’t think you’ll be so hoorah when your employer decides the treatments you want cut too close to the bottom line. 

    I see less reason to trust my employer with making the best decisions for my health when it can be against their interests to do so. 
    You’re making the classic mistake of thinking this particular announcement is the end of it. This is just the beginning. Expect a lot of assumptions about what is or isn’t “healthcare” to be challenged.
    Ok but what addressing what I said? To me there is a financial conflict of interest between what employers want and what patients want.
    palomine
  • Reply 16 of 85


    This really could swing either way - companies will have a far greater incentive to focus on preventative health care, which is far more cost effective that the treatments cost years or decades later (smoking, sugar intake, lack of exercise, regular checkups). Also if they can do something about the insane cost of healthcare in the US, than can only be a good thing. Insurance companies have never addressed that.

    On the other hand, your employer knowing everything about your health might not be a good thing. You can see a future where compensation, promotion and other decisions could be made with health considerations in mind, or even decisions about lay-offs. Employees could be more dependent than ever on their employers (COBRA isn't great but it can give you a cushion) so losing your job or quitting because of some unacceptable factor at work, would cost you more than ever.

    Of course, the fact that this is even something they need to consider doing, because healthcare in this county is such a freaking mess, is the real tragedy.
    Regarding your last paragraph, the US isn’t the USSR. We don’t need or want Government Healthcare. There is nothing that can be done by the private sector that cannot be made worse when the Federal government gets involved. The entire insurance and healthcare industries are ripe for massive deregulation and innovation shakeups. People will (against current beliefs) come to see that less interference is better and more competition is much better.

    https://blogs.wsj.com/moneybeat/2018/01/30/the-amazon-effect-rattles-health-care-stocks/
    Enron. We can come up with plenty of examples where the private sector screwed up when it’s in their interest to do so. Federal government, oversight, and regulation fulfill valid job-to-be-done use cases. 
    The Federal government wasn’t in the same business as Enron and nothing improved after the Feds got involved!
    It's an example of a private company in what is often a heavily government regulated business, running their business according to their own interests only. The point being that the interests of pure-private aren't always best for consumers, employees, or citizens either. Regulation by nature isn't bad. Like most things there is an appropriate amount.
    edited January 2018 roundaboutnow
  • Reply 17 of 85


    This really could swing either way - companies will have a far greater incentive to focus on preventative health care, which is far more cost effective that the treatments cost years or decades later (smoking, sugar intake, lack of exercise, regular checkups). Also if they can do something about the insane cost of healthcare in the US, than can only be a good thing. Insurance companies have never addressed that.

    On the other hand, your employer knowing everything about your health might not be a good thing. You can see a future where compensation, promotion and other decisions could be made with health considerations in mind, or even decisions about lay-offs. Employees could be more dependent than ever on their employers (COBRA isn't great but it can give you a cushion) so losing your job or quitting because of some unacceptable factor at work, would cost you more than ever.

    Of course, the fact that this is even something they need to consider doing, because healthcare in this county is such a freaking mess, is the real tragedy.
    Regarding your last paragraph, the US isn’t the USSR. We don’t need or want Government Healthcare. There is nothing that can be done by the private sector that cannot be made worse when the Federal government gets involved. The entire insurance and healthcare industries are ripe for massive deregulation and innovation shakeups. People will (against current beliefs) come to see that less interference is better and more competition is much better.

    https://blogs.wsj.com/moneybeat/2018/01/30/the-amazon-effect-rattles-health-care-stocks/
    Enron. We can come up with plenty of examples where the private sector screwed up when it’s in their interest to do so. Federal government, oversight, and regulation fulfill valid job-to-be-done use cases. 
    The Federal government wasn’t in the same business as Enron and nothing improved after the Feds got involved!
    It's an example of a private company in what is often a heavily government regulated business, running their business according to their own interests only. The point being that the interests of pure-private aren't always best for consumers, employees, or citizens.
    What’s “best” isn’t for a politician or society to decide.
    designr
  • Reply 18 of 85
    Mike WuertheleMike Wuerthele Posts: 4,604administrator
    We've made an active choice to keep the thread open, even given the polarizing nature of it. 

    Keep it calm, and it will remain so. If you haven't already, read the revised commenter's guidelines, conveniently linked at the bottom of the page.
  • Reply 19 of 85
    Dems wanted single-payer but compromised on ACA when GOP balked. A big multi-Corp health plan will be a nice proof of concept, as it will essentially be a private single-payer plan. As Mike said, Kaiser already proved this concept, as well as many other countries in Europe. But Americans are hard headed and scared off by the mere invocation of the scary word “socialism.” Meanwhile, by any measure, these countries have better outcomes. 

    I don’t care care as much who provides some form of not-for- profit single payer plan, the government or private industry, as long as we all get a shot at it. What a concept: competition for the best single payer plan! All about outcomes, not shareholder profit. 
    edited January 2018 roundaboutnowraoulduke42sandorpalomine
  • Reply 20 of 85

    rob53 said:
    Companies used to self-insure their employees before healthcare costs exploded. There are several groups to blame for the ridiculous increase in costs, in no particular order, greedy doctors, greedy insurance companies, greedy doctor's medical groups, Wall Street, and greedy prescription companies. Blaming ACA (@SpamSandwich) doesn't get to the root cause. Starting to cover your own employees hopefully would get rid of the money-sucking middle companies, especially the insurance companies. All you have to do is look at the insane profits companies like Anthem (market cap of $62B, stock price 400% increase in last 5 years) makes for pushing paper to understand where the problem lies. You can complain all you want about socialized medicine and government waste but your medical insurance costs are driven by Wall Street greed and not by our government. Why are so many people involved in paying our medical bills? Every extra person who touches that money takes their cut and they don't deserve it. Get rid of these companies and costs would go down--as long as one of the other middle companies doesn't do a money grab to keep it where it is. 

    The larger problem is insurance companies are treated like banks, too big to fail. More and more companies are being added to that list making it very difficult to streamline any business to save consumers money. (Take consumers either way you want, plural or possessive.) I hope these companies can actually find a way to reduce medical costs but is they simply take a short cut and continue to outsource their medical accounts handling to an insurance company they haven't improved anything.


    Agreed, there is lots of greed to go around, the costs don't seem realistic in a normal market but are allowed to exist in the insurance/medical world. Example: an hour of PT has a sticker price of $1100, which the insurance company negotiates a "contract rate" down to hundreds, and then I pay part of it. But if I hire a strength coach for an hour of 1-on-1 I get more attention and a much cheaper market price of maybe $100.

    Another example: I went to the ENT to check my sinuses. The office visit was $250, but when he used an optical instrument to stick down my nose and look around for 5 minutes? $900! This is insane. A plumber does something similar but doesn't charge an extra $900 to use his pipe camera. Now those are the sticker prices, and the insurance company then makes a deal for less, and then charges me some of that, citing the savings they brokered. But the sticker prices are the problem -- they are unrealistically high. Maybe this is an area where some competition would be nice, but if all the hospitals do it how do we get there...
    edited January 2018 roundaboutnowsandor
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