Three of the world’s largest organizations are joining up to form an independent health-care company with the aim of providing U.S. employees and their families with simple, reasonably priced and transparent health care.
While the move by Amazon.com Inc., Berkshire Hathaway Inc. and JPMorgan Chase and Co. is in the early stages, its initial focus will be on technology solutions, according to a press release. “They’re going into it with an open mind, but they’re looking at it as technology being a part of the solution process,” says Tim Clarke, president of TC Health Consulting Inc.
He adds this technology could range from claims and administration to virtual care and different ways of structuring insurance. “I mean, Berkshire Hathaway has a pretty big insurance arm,” he says. “So you’ve got the financing, you’ve got the technology, you’ve got the insurance — all the elements there to do a lot of things differently.”
Indeed, the announcement sends a message that the trio of companies has given up on the traditional ways in which employers have tried to reduce costs or manage costs better, Paul Fronstin, an economist with the non-profit Employee Benefits Research Institute, told The Associated Press.
Benefits experts quoted by The Associated Press speculated the new company could create a virtual marketplace that makes shopping for health care as easy as buying a shirt on Amazon.
“The sky’s the limit on where they could possibly go with this,” said Brian Marcotte, chief executive officer of the National Business Group on Health, another non-profit that represents large employers in the United States. “We’re always supportive of disruptive innovation, and health care certainly is in need of it.”
Insurers and other companies already offer applications or programs that help people wade through the U.S. health-care system’s often-baffling mix of prices for procedures or prescriptions, but Amazon has the potential to create a more user-friendly way to shop, The Associated Press quoted Marcotte as saying.
“They have customer trust, they are already in people’s homes and they’re already part of many people’s routines in how they shop,” he said.
While the new company will be targeting U.S. employees, Canada should also prepare to see more technology giants entering some aspect of the health and insurance business in the near future, says Clarke.
“In Canada, we’ve seen a lot of really neat innovation coming from startup companies, digital health, [insurance technology] companies, that are impacting the way we look at health and insurance programs right now,” he says. “We haven’t really seen the other side of the equation. We’ve seen the little companies, the startups begin to have an impact. We haven’t really seen in Canada the big technology companies step in and start to have an impact.”
In a press release about the unnamed new company, Warren Buffett, chairman and chief executive officer at Berkshire Hathaway, said the three players aren’t coming to the problem of ballooning U.S. health-care costs with all the answers. “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.”
Jeff Bezos, founder and chief executive officer at Amazon, said in the release that the three companies are taking on the challenge with a clear view of how difficult it will be. “Hard as it might be, reducing health care’s burden on the economy while improving outcomes for employees and their families would be worth the effort. Success is going to require talented experts, a beginner’s mind and a long-term orientation.”