Corporate Giants Collaborate to Disrupt the Healthcare Industry
Amazon, Berkshire Hathaway and JPMorgan Chase are combining their forces in the hopes of bringing positive change to the healthcare industry. The 3 corporate giants have plans to form an independent healthcare company in the United States for their employees.
In America, healthcare costs have been rapidly spiralling upwards, faster than that of wage increases and inflation. Average premiums for family coverage saw a 19% increase since 2012, and workers currently have to pay 30% of the premium – and this doesn’t include the deductibles and co-payments.
The partnership materialised as the 3 friends Bezos, Buffett and Dimon engaged in discussions about providing employee insurance and the challenges they faced. They agreed that breaking down the complexities of health insurance, coupled with data on consumer choice could be the answer to their problems. They also mentioned that the initial focus would be trying to simplify care via the usage of technology.
The potential gains of this collaboration among the 3 companies is huge – the announcement of the partnership was enough to shake up the industry, plunging the stocks of insurers and major health companies. Despite this, the number of employees the 3 companies have combined is just over a million. A large number, but pales in comparison to the tens of millions of Americans captured by large insurers and pharmacy benefit managers, which leads some to doubt if they could really disrupt the healthcare industry.
While the plans for the independent healthcare company are still in its infancy stage, there have been speculations of the possible routes it could take. Some predictions include an “online health care dashboard that connects employees with the closest and best doctor”, suggesting that they may negotiate for corporate rates directly from healthcare providers. Another speculation is that the partnership may aim to make the whole process more efficient by bringing the “customer-facing, patient-facing thing into your smartphone”.
Other major employers like Walmart and Caterpillar have also tried to tackle the problem of rising healthcare costs via directly working with health professionals or setting their own rules for drug coverage.
Nevertheless, the difficulties of resolving the issue has been addressed by Catalyst for Payment Reform’s executive director, Suzanne Delbanco. She noted that in a market where a local hospital or medical group dominates, it will be very tough for employers desiring to take control of the soaring prices.
The healthcare problem has not been a recent one for America, and we can only hope that the venture between Amazon, Berkshire Hathaway and JPMorgan will see some success in their endeavours.
Adapted from the article “Amazon, Berkshire Hathaway and JPMorgan Team Up to Try to Disrupt Health Care” originally published on The New York Times.