DISRUPT - Amazon, Berkshire Hathaway and JPMorganChase Partner for Healthcare

Improving Employee Satisfaction and Reducing Overall Costs

Increasing Satisfaction, Lowering Cost

Three large American employers announced yesterday they will partner and develop ways to deliver healthcare that provides greater satisfaction for their employees and reduces their overall cost. 

These three companies intend to bring scale, complementary expertise and an ecosystem that is free from profit-making or incentives that seem to be present constraints. These three organizations will create an ecosystem that has more than 1.1M employees (Amazon 542K, Berkshire Hathaway 368K, JPMorgan 234K). To put this in context, Walmart has 1.4M employees in the US and Google has 62K.

The joint press release noted that tackling the enormous challenges of healthcare and harnessing its full benefits are among the greatest issues facing society today. By bringing three of the world’s leading organizations into this new and innovative construct, they hope to bring a fresh approach to these critical matters.

“The ballooning costs of healthcare act as a hungry tapeworm on the American economy. Our group does not come to this problem with answers. But we also do not accept it as inevitable.” said Berkshire Hathaway Chairman and CEO, Warren Buffett.

“The healthcare system is complex, and we enter into this challenge open-eyed about the degree of difficulty. Success is going to require talented experts, a beginner’s mind, and a long-term orientation,” said Jeff Bezos, Amazon founder and CEO.

“The three of our companies have extraordinary resources, and our goal is to create solutions that benefit our U.S. employees, their families and, potentially, all Americans,” said JPMorgan Chase Chairman and CEO, Jamie Dimon. 

While this effort is in its early planning stages, the formation of the company will be jointly spearheaded by Todd Combs, an investment officer of Berkshire Hathaway; Marvelle Sullivan Berchtold, a Managing Director of JPMorgan Chase; and Beth Galetti, a Senior Vice President at Amazon. The release says that the longer-term management team, headquarters location and key operational details will be communicated in due course.

That this alliance will produce disruption in the healthcare sector cannot be disputed. That the partners hope to construct a new healthcare ecosystem using their scale and expertise without a need for profit is being watched with great concern by those who profit in this sector. 

Amazon Marketplace has already claimed a place in healthcare that is worrying those involved in Patient Benefit Management (PBM) and those involved in supplying pharmaceuticals like Walgreens and Walmart.

Can these partners create a win for themselves and then for other large employers is the question on the mind of nearly everyone. In December, InfoStream published an article on the CVS acquisition of Aetna which illuminated disruption in healthcare for humans.  Dental care and veterinary  healthcare are other areas that are ripe for aggregation and disruption.

Notice that Jeff Bezos, used the term 'a beginners mind' in his quotation. The process of rethinking a market when everyone else is clearly 'doing the same thing and expecting a different result' requires this approach. When consumer satisfaction increases, transparency is delivered and healthcare costs decrease a win will be certain.  

Here are links showing disruption has been aimed on healthcare for sometime:

2018Jan30 Bloomberg - Video on this Disruption 

2017Oct20 Forbes - Amazon to Disrupt Pharma

2017Oct05 Huron - Addressing Healthcare on Amazon 

2017Jul24 CNBC - Amazon Showing interest in Healthcare 

2017Jun10 Modern Healthcare - Amazon poised to deliver disruption in medical supply industry 

2016Feb25 Slideshare - Healthcare Disrupted: Next Generation Business Models and Strategies for Life Sciences