Commonwealth Fund President David Blumenthal on the Healthcare Collaboration Between Amazon, Berkshire Hathaway and JPMorgan Chase
The recently announced health care collaboration between Amazon, Berkshire Hathaway and JPMorgan Chase — three hugely rich, successful and totally different corporate behemoths — has become something of a Rorschach test for analysts and pundits. Since the companies themselves have said nothing about what their new venture will do, we are all free to spin scenarios to our hearts’ content, and to the public’s likely confusion.
The fact is, no one — probably including Jeff Bezos, Warren Buffett and Jamie Dimon — knows how Amazon and Company will provide their 1.1 million employees with “simplified, high-quality and transparent health care at a reasonable cost.” Conspiracy theorists might even wonder if three wily tycoons have just launched a brilliant ploy to get all of us to crowdsource ideas that will help them figure out how to remake health care.
Conspiracies aside, what we do know is that their employees face the same health problems as all Americans: skyrocketing costs that strain their budgets and their insurers, whether public or private. We also know that it doesn’t have to be this way. Wealthy countries the world over have achieved comparable — or better — health outcomes at a fraction of what Americans pay. Our health care system desperately needs disruption, which is the reason for the extraordinary excitement that this new alliance has generated.
So what can we actually expect Amazon and its partners to accomplish?
Let’s begin by dispelling a misleading first impression: that the three companies have sufficient combined market power to bend the health system to their will. One million-plus employees may seem like a lot, but they are spread across scores of markets in the United States and abroad. All health care is local. The new venture may have sufficient market share in a few areas — maybe Seattle, or Omaha — to muscle better prices and service out of doctors and hospitals, but in most locales, that won’t be the case...