By Matt McCambridge on October 23, 2018
In case you haven’t seen the news recently, one of the big recent events in healthcare is a joint venture by Amazon, JP Morgan and Berskhire Hathaway.
Their actual plan continues to be opaque, but here are a few ways to consider the news:
This is a continuation of existing themes.
- Companies have been doing some form of this for a long time. Walmart, Loews and others have entered into direct contracts with provider groups and created highly customized insurance packages for their employees for many years, with many starting to get press around 2013.
- It’s likely we could see change on the local level, but widespread change is doubtful (at least in the beginning). Together, the three companies employ fewer employees than Walmart does alone, so their easiest point of leverage may result in a relatively minimal change. Having said that, healthcare is fundamentally a local market, in which case they may have enough density to shift local markets.
- Regardless of what happens, we expect to continue to see fragmentation of the traditional health insurance space for employers, Medicare and Medicaid. This trend will continue to come up against a countervailing trend where entities like hospitals continue to buy up doctors offices, and insurance companies buy a variety of healthcare assets.
There are a lot of places where they could take this.
- This partnership allows each company to further leverage what they’re already good at. This is the best take we’ve seen so far:
- Using massive clinical and payer databases, Amazon develops national network of high value providers.
- Berkshire develops insurance products to feature these high value providers, direct to consumer insurance products, including Medicare supplements that steer patients to high value providers. Insurance products could easily have a 30% lower cost due to lower utilization by high value providers.
- JP Morgan provides consumer financing vehicles for patients out-of-pocket costs.
- Additionally, this is probably the most optimistic view of what they could be looking to do together, but it’s very smart.
- Or, perhaps they’re going towards what Apple just announced, with primary care clinics for employees. [We have some thoughts on onsite clinics - stay tuned for a future blog post!]
What this means in the short-term.
Nothing -- just yet. It remains to be seen if the collaboration will focus on drug pricing and distribution, slashing bureaucracy, automation or reshaping the reimbursement system.
From our perspective, we believe there’s an opportunity to improve healthcare by providing employees with immediate, 24/7 access to physician assistants and MDs via telemedicine, and incentivizing employees to use this service by making their care free if they message their provider before seeking in-person care.
At Eden Health, we’re putting a lot of these pieces in place to make healthcare simple and reduce costs. What do you think the Amazon, JP Morgan and Berkshire collaboration will bring to healthcare?
How can we help?
We built Eden Health, a direct-to-employer medical practice, to help companies of all sizes make their employees feel important, valued, and welcomed, while getting the care they need in a cost effective way.
We’d love to speak with you to learn more about your healthcare strategy or to help you craft one. Share your details below, and we’ll be in touch shortly.