Expert advice for the corporate titans taking on health care


An announcement Jan. 30 by three of the nation’s corporate titans – Amazon, Berkshire Hathaway, and JPMorgan Chase & Co. – that they are joining forces to address the high costs of employee health care has stirred the health policy pot. It immediately sent shock waves through the health sector of the stock market and reinvigorated talk about health care technology, value, and quality.

Though details regarding the undertaking are thin, the companies said in a statement that their partnership’s intent is to improve employee satisfaction and hold down costs by bringing “their scale and complementary expertise to this long-term effort.”

They plan to create an independent company, “free from profit-making incentives and constraints,” to focus on “technology solutions.”

Berkshire Hathaway CEO Warren Buffett described health care costs as “a hungry tapeworm on the American economy,” and Amazon founder and CEO Jeff Bezos said the partnership was “open-eyed about the degree of difficulty” ahead. Jamie Dimon, chairman and CEO of JPMorgan, said the results could benefit the employees of these companies and possibly all Americans.

But what does all of this mean and how can it be successful when so many other initiatives have fallen short? Kaiser Health News asked a variety of health policy experts for their thoughts on this venture, and what advice they would offer these CEOs as they go forward. Some of the advice has been edited for clarity and length.

Tom Miller, resident fellow, American Enterprise Institute:

“It’s great that someone theoretically with resources would try to build a better mousetrap. But it’s been difficult to do, and part of it is regulatory and competitive barriers are well-constructed in the health care sphere, which tend to make it less receptive or subject to competitive pressures.

“I welcome any new capital trying to disrupt health care. … The incumbents are comfortable and could use disruption. If Amazon has an idea, and is willing to put some money behind it, that’s wonderful. What they are willing to do other than fly low-cost providers for home visits in drones – I don’t know. They’d probably have to miniaturize them, wouldn’t they?”

Stan Dorn, senior fellow, Families USA:

“Number one, look at prices. America doesn’t use more health care than European countries, but we pay a lot more and that’s because of prices more than anything else. Look at hospital prices and prescription drug prices. I would also say, look to eliminate middlemen operating in darkness. I’m thinking in particular of pharmacy benefit managers. Often, the supply chain is hidden and complex, and every step along the way the middlemen are taking their share, and it winds up costing a huge amount of money.”

Bob Kocher, MD, partner, Venrock:

“It has been said that health care is complicated. One thing that is not complicated is that the way to save money is to focus on the sickest patients. And that’s the only thing that has proven to work in great primary care. I hope Amazon realizes this early and does not think that [its smart digital assistant] Alexa and apps are going to make us healthier and save any money.

“It would sure be nice if they invest in a ‘post-CPT-ICD-10-and-many-bills-per-visit’ world where we know prices, can easily know what is known about quality and experience, and have same-day service.”

Tracy Watts, senior partner, Mercer:

“Everyone thinks millennials want to do everything on their phones. But that’s not necessarily the case.

“[There was a recent] survey about this – specifically, millennials are the most interested in new health care offerings, but it wasn’t as much high-tech as it is convenience they are interested in – same-day appointments with a family doctor, guaranteed appointments with specialists, home visits, a wider array of services available at retail clinics. That was kind of an ‘aha’ – this kind of convenience and high-touch experience is what they’re looking for. And when you think of ‘health care of the future,’ that’s not what comes to mind.”

John Rother, president and CEO, National Coalition on Health Care:

“Health care is complex and expensive, so the aim should always be simplicity and affordability. Three keys to success: Manage chronic conditions recognizing the life context of the patient, emphasize primary care-based medical homes, and aggressively negotiate prescription drug costs.”

Suzanne Delbanco, executive director, Catalyst for Payment Reform:

“The biggest driver of health care costs is prices. Those are being driven up by health care providers who have consolidated and will continue to consolidate and amass more market power.

“It sounds like they [the companies] are limiting the use of health plans, but if they’re going to get into that business, they’re going to come up with the same challenges health plans face. What would be really innovative would be to build some provider systems from the ground up where they can truly get a handle on the actual costs and eliminate the market power that drives the prices up, and they can have control over their prices.”

Next Article:

   Comments ()