A Few Quick Thoughts on Amazon, JP Morgan, & Berkshire Hathaway Tackling Health Care

When I recently wrote about The Year of the Partnership, this is not quite what I had envisioned. But wow – what an announcement!

I put pen-to-paper on a few quick thoughts. Here it is:

  1. I love that these big players are seeing what those of us in health care have known for a while – something needs to change (and soon). When three bigs converge on the problem, it’s exciting.
  2. The solution is going to come from the employer side. Not policy makers.
  3. The size and money that these 3 players have makes me think there will be dis-intermediation. They’ll go direct to provider (a concept generally known as employer-direct contracting). They’ll also negotiate direct contracts with pharmacies (or develop their own pharmacy – heaven knows they have the distribution). Check the stock price of CVS and ESI.  They’re scared (and they should be). I was also educated recently by Brian Klepper who wrote an article that discussed this same topic. Until reading it, I had not known that Berkshire Hathaway had a medical stop-loss division. Interesting…
  4. How will these companies use existing Amazon/Whole Foods infrastructure to reach consumers?  This intrigues me and the possibilities are interesting. Imagine going to buy your groceries, and taking a moment to get a check up while you’re there.  Since primary care in the US is so important, I see this as a very real possibility.
  5. I hope they pay attention to the social determinants of health as they attack this.  Not everyone buys their groceries at Whole Foods, banks with JP Morgan, or has an Amazon Prime account.
  6. Innovation and technology are key – it will be interesting to see what tech is used/created here. I’ll be watching this closely.
  7. Leadership is even more important.  Throwing money at a problem doesn’t solve it. Who do these players bring in to lead this charge?  I’ll be watching this even more closely.
  8. They have their work cut out for them.  One of the large challenges in health care today is “The System” – I’ve blogged about this before.  If these big 3 players have to work with the existing infrastructure of patient data, claims data, etc. then interoperability will prove to be as big a hurdle to them as it is to the rest of us.
  9. I think these companies want to make a significant dent in health care, but spinning off one (or more) successful health care businesses is where the future takes these guys. Think of it as a giant petri dish that can conduct huge experiments on their own gigantic base of employees. If it works there, they spin it off into mainstream US health care system. Wouldn’t it be neat to see these big three companies challenge entrepreneurs throughout the world to get involved in solving the problems in health care?
  10. Sorry to end on a bit of a downer, but when you’ve work in the biz as long as I have, you are cautiously optimistic (at best). I am excited about the prospects of what could happen, but I’m also reminded of the sobering facts and history of entrepreneurs and other companies trying to make a dent in this behemoth.  So my fingers are crossed here, but I’m trying not to get my hopes up too high.