Amazon, JPMorgan, Berkshire Hathaway could roil industry with new health care company
The announcement Tuesday that Amazon, JPMorgan Chase and Berkshire Hathaway are forming an independent health care company for their U.S. employees created an abundance of speculation—particularly since the companies’ statement skimped on details.
Some analysts and stakeholders believe the new company has the potential to upend the health care industry, and cheered the CEOs of the three companies on as they set out to bring about long-overdue and necessary change. Others adopted a wait-and-see attitude or expressed doubt that the new venture would make much difference in such a complex industry with so many layers of firmly entrenched processes, policies and players, pointing to the fact that large employers have banded together before in an attempt to rein in the ever-escalating costs of health care—without a great deal of effect.
Nonetheless, the consensus appears to be that if anyone can take on the massively inefficient industry to “reduce health care’s burden on the economy while improving outcomes for employees and their families,” as Amazon CEO Jeff Bezos put it, these three companies have the experience, knowledge and resources to do it.
“At a time when Amazon has technology to enter your house with same-day delivery or have a totally automated grocery store, they are not content with our lame explanations around transparency, inequities and even sending a believable, understandable bill. I believe this is Jeff Bezos, Jamie Dimon and Warren Buffett doing their ‘we’re mad as hell and we are not going to take it anymore’ speech and taking it into their own hands,” Dr. Stephen Klasko, CEO of Thomas Jefferson University and Jefferson Health, told Modern Healthcare.
Bezos said that he, JPMorgan’s Dimon and Berkshire Hathaway’s Buffet are entering the “challenge open-eyed about the degree of difficulty,” and Buffett acknowledged that they don’t have answers yet.
Their focus, at least initially, appears to be on digital technologies to simplify care, increase transparency and lower costs—perhaps through more widespread use of services such as home monitoring and telemedicine, or more efficient delivery systems for prescription drugs, or online options for billing and payment. Where they will go from there is anyone’s guess.
“At this point, they could be talking as small as employee clinics and as large as the largest integrated health care company,” Will Hinde, health care managing director at consulting firm West Monroe Partners, said in an email to Fierce Healthcare. “But the industry is ripe for disruption, and this group of companies has the money and intelligence to succeed.”
The new venture will offer whatever it comes up with to the more than 1 million employees of Amazon, JPMorgan Chase and Berkshire Hathaway’s many companies, but Dimon said that eventually all Americans could benefit.
“This is an example of innovative companies combining to create new models to address health care and health system issues that impact their business,” Greg Caressi, transformational health senior vice president at Frost & Sullivan, told Fierce Healthcare via email. “They are disrupting the system to meet broader goals, which will advance change in a slow moving ecosystem.”
“The other thing that this will force is a discussion around the concept of your ZIP code being more important than your genetic code when it comes to health—the whole issue of social determinants of health,” Jefferson Health’s Dr. Klasko told Becker’s Hospital Review. “We don’t deal with that because hospitals are competing with each other and are just concerned about what happens if somebody comes into their office or hospital. I think these CEOs are keen on and going to ask us to look more closely at that.”