This week’s announcement by Amazon, JPMorgan Chase, and Berkshire Hathaway of their collective intent to form a new organization focused on delivering greater employee healthcare benefits at a lower total cost to the patient is a game changer. The move is indicative of the disruptive paradigm taking hold within the healthcare industry.
Continued Disruption and Systemic Change
The announcement by these well-capitalized, non-industry players falls on the heels of late 2017’s CVS-Aetna and Optum-DaVita merger announcements and signals a continued trend of major disruption and systemic change. Throughout the rapidly shifting industry landscape, one emerging tendency is that new, nontraditional market participants now seek to capitalize on a tremendous opportunity to reduce waste and increase patient accessibility. With significant access to capital to manage the increasingly high cost of healthcare, the new healthcare-focused company formed by the three financial giants of Amazon, JPMorgan Chase, and Berkshire Hathaway will undoubtedly bend the cost curve for their more than 1.2 million employees and their families.
Combining Strengths to Deliver Efficiencies
Through a coordinated approach across the healthcare continuum under a single corporate entity, the yet-to-be-named company will leverage the strengths of three conglomerates to address the legacy inefficiencies of the healthcare delivery system through the well-funded (Chase) insurance company solution (GEICO, owned by Berkshire Hathaway) that looks to reduce waste and inefficiency in a consumer-centric manner (Amazon). The strategic combination of technology, innovation, consumerism, and financing—all of which traditional healthcare industry participants lack from a competency and capability perspective—will provide a unique platform that the industry has yet to experience at this scale.
Reaching beyond Internal Employees
While these companies are initially focusing on their employee base, make no mistake: they have higher aspirations to solve the riddle of delivering better healthcare at a lower overall cost. Pending their early success, don’t be surprised to see a nationally scaled delivery system solution that offers services to a broader consumer base. Today it’s their employees and their families; tomorrow it will be the entire US market for healthcare services.
As these companies have each shown individually, they have the unique ability to leverage technology, people, and processes to revolutionize their current industries. In developing a comprehensive solution set that provides a ubiquitous technology through intuitive, consumer-driven platforms that address unmet needs for patient friendly and easy-to-access healthcare services, a new, highly disruptive market leader will likely be born.
New Entrants Make Patient Centricity a Necessity
Solutions that focus on providing patients with knowledge, transparency, and control over the delivery and quality of their healthcare are no longer “nice to haves” or aspirational goals but rather necessities in today’s healthcare environment. The significant capital investment by the large-cap powerhouse companies of JPMorgan, Berkshire Hathaway, and Amazon are a clear signal these solutions are must-haves to remain a viable provider of long-term healthcare services on a national scale.