Healthcare is a critical component of any personal financial plan, one that causes an incredible amount of stress. There is so much to consider: the costs of premiums, copays, deductibles, and prescription drugs – all of which seem to keep moving upward at a disheartening pace.
Government efforts to address this serious problem have been ineffectual, at best. Does the answer lie in the private sector? Could businesspeople succeed in re-making our troubled healthcare system? We may soon find out.
Amazon, Berkshire Hathaway, and JPMorgan Chase recently announced plans to create an independent, non-profit corporation to provide health coverage for the hundreds of thousands of people employed by the three companies. This business dream team has set the ambitious goal of improving the health of their employees while reducing costs, boosting transparency, and increasing patient satisfaction.
If this fledgling plan works as envisioned, the model could be adopted by other large companies, thus dramatically disrupting the entire healthcare industry.
While details about the project are scarce, we do know that the three partners bring tons of resources to the table. Amazon has a wealth of technical ability and knows how to bring operating efficiencies to less-than-lean industries. Berkshire Hathaway has the deep pockets required to start an insurance company. JPMorgan Chase offers a vast trove of consumer data and the ability to extend credit for medical treatment.
But perhaps most importantly, all three companies are led by accomplished, visionary businesspeople – Amazon founder Jeff Bezos, Berkshire Hathaway Chairman/CEO Warren Buffett, and JPMorgan Chase Chairman/CEO Jamie Dimon. It’s never smart to bet against any of these guys.
Transparency will be key to remaking American health care, according to this business dream team. I couldn’t agree more. We are imperfect shoppers when it comes to medical care, primarily because we don’t have enough information. When we’re sick, we go to the doctor and pay the bill given to us. We don’t negotiate prices. We don’t look for the best deal on that knee replacement surgery. We go to our medical provider and trust they will do the best job for a reasonable price. There is little, if any, transparency about cost.
And it’s not just consumers who need more information. As Elizabeth Mitchell, CEO of the Network for Regional Healthcare Improvement told Forbes, “Employers who pay for this care still don’t have insight into the relative value of what they are buying. They are looking for a way to have assurance that they are paying a fair price for a high-quality service.”
The Amazon-Berkshire-JPMorgan announcement has generated lots of debate about the plan’s merits and viability. What we can all probably agree on, however, is that something needs to change in healthcare.
As it stands, consumers pay through the nose for health care. According to AARP, a 63-year-old man residing in Georgia who is a non-smoker and of average height and weight will pay about $102,000 for 20 years of health care costs. Of that amount, Medicare (which kicks in at age 65), will only cover half. So, we’re looking at $50,000 of out-of-pocket expenses for care during our retirement years alone. Couple that with recent studies that show one-third of the money spent on health care in America is waste. It’s data like this that has led these three executives to seek out a better way forward.
I believe that if we end up with a private solution to the health care conundrum, we may be in good hands. Amazon, Berkshire, and JPMorgan all understand and strive to provide strong customer service. If they can make even a dent in the current health care scheme, I say that’s a win for all of us.
I truly believe that the issue of health care is a tremendous problem that has been fraught with political tension. It has become such a hot-button topic that our legislators haven’t been successful at effectuating any sort of change yet.
Maybe this is the way – a private approach that seems almost nonprofit. These companies want to help their employees, and the wider public and they have the deep pockets necessary to do it. It’s a logical next step in our slog through the mud towards a change to our health care system. I say give these guys a chance. This new approach to tackling an evergreen problem could be exactly the type of creative solution that will help us all.
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