In early 2018, the announced collaboration between Jeff Bezos (Amazon), Warren Buffet (Berkshire Hathaway), and Jamie Dimon (JPMorgan Chase) set the health and financial sectors abuzz with speculation over what they might (or might not) be able to accomplish in health sector innovation. And, it should. Any collaboration between 2 of the three wealthiest people on the planet and 3 CEOs presiding over some of the largest companies both in their industries and in the world has transformational implications. Healthcare finance and delivery reform in the U.S., however, has claimed more failed efforts than the metaphorical Bermuda Triangle has planes, so a generous dose of skepticism seems in order. So, what might the collaboration reliably yield?
Radical delivery transformation is certainly possible.
Amazon computing power and technology is well-poised to create a robust telemedicine platform supported by AI-assisted clinicians providing maintenance care at a distance for patients with chronic conditions. This could dramatically lower clinician cost, eliminate travel time/expense, and expand telemedicine access to not only acute care, but also routine maintenance care to 24 hours a day, 365 days per year availability. Such services could be both Amazon-provided and branded or the platform infrastructure could be provided at lower marginal cost to health systems and provider groups who contract for them much like Amazon Web Services provides affordable platform technology to a host of industries.
It would also be easier through this collaborative than in the general public to leverage Amazon’s tech (or to fund startups with the technology) that can provide patients low-cost, in-home, point-of-care monitoring solutions (i.e. Bluetooth scales, glucometers, blood pressure monitors, cardiac rhythm monitors, etc.) to a) collect real-time data, b) apply AI to analyze and predictively model the data, and c) intervene for patients with high cost disease states (i.e. CHF, COPD, diabetes) to prevent or substantially minimize decompensation through more rapid interventions to prevent decompensation and avert preventable hospitalizations.
A large collaborative like this, with the aggregate financial acumen of the three companies plus the large healthcare budgets they already deploy, could make profound inroads into healthcare for their own combined >1.2 million employees. With sufficient coordination, the three corporations could adopt a much more wholistic approach with the result that it becomes single-payer and single-provider for routine preventive, maintenance, and remote monitoring of care for most common conditions using tools as described above. The companies would then only contract out for acute procedural and in-hospital services. Doing this, they would save substantial expense by eliminating 3rd-party health insurer and numerous outsourced provider expenditures. These savings could be sufficient to provide all their own employees much lower or no-cost healthcare coverage for all employees who consent to use the prescribed services and comply with the in-house delivery system requirements as a condition of receiving the no-cost health coverage option. There may even be enough money left to pay these employees some modest incentive to choose this path.
Extending the scenario above, the pricing system for contracted provider services, pharmaceuticals, and devices has been irretrievably broken. Long ago, it ceased to be a fee charged and paid in return for a discrete product or service provided. It is now an opaque web of wildly inflated charges, insanely discounted rates, rebate/refund programs as complex as collateralized debt obligations (CDOs), a tangled knot of distributors, etc., etc. This collaborative might have enough scale to strip out much of this of this waste and return to a cleaner model of cash exchanged for goods without so much tangled mess in the middle.
3) The Big Picture
Improving the healthcare value proposition requires at least a handful of key events to occur:
i) Sufficient aggregation of financing layers is required to eliminate as many intermediary costs as possible. If done at scale, this could effectively wipe-out the entire private health insurance industry, most of the revenue-cycle industry, much of the bricks & mortar pharmacy industry (why would we need so many drugstores if Amazon can home-deliver medication within 2 hours), etc., etc. This alone would be transformative to healthcare financing and delivery.
ii) Nearly compulsory leveraging of telemedicine, in-home monitoring, AI-enhanced predictive analytics, and rapid interventions by lower cost clinicians or team members would be essential. The pseudo-compulsory aspect would be facilitated by corporations offering employees incentives (no- cost healthcare plus cash or other positive incentives) to use these preferred services rather than bricks & mortar physician offices, hospitals, pharmacies, etc. unless the company delivery system advises and authorizes it (or in case of acute injury / emergency).
iii) Facilitated and/or mandated patient compliance with treatments and/or requirements. Remote monitoring and review of use patterns would reveal employees who repeatedly fail to comply or who use non-preferred care avenues. Repeated non-compliance could result in imposition of employee cost-sharing for healthcare coverage/services and/or other interventions.
Many of the above items are industry-transforming – every bit as much as iTunes was for music and Amazon has been for retail. Some of the above is easy to model and deliver, but other parts are much more difficult and would be a daunting challenge to scale outside the captive employee base of the three collaborating companies. It’s far from impossible, though. Amazon is the key to much of this because it can leverage its tech, scale, and razor-thin margins (tiny cut of a massive amount) to make its profit while still saving money for others. Initially, Berkshire and JPMorgan appear less critical, but their size and scope undeniably add to the potential experimental pool (i.e. employees) and could be helpful enlisting other corporations to join in if these initiatives show early signs of success.
These concepts could radically transform healthcare delivery and financing. Though it’s anyone’s guess how much of it they can accomplish and in what timeframe, being the CEO atop such a collaboration would be a fascinating job!