This morning, Amazon, Berkshire Hathaway, and JP Morgan Chase announced an ambitious partnership to cut health cuts and improve satisfaction for their U.S. employees. They announced plans to create a company “free from profit-making incentives,” with the goal of implementing technology solutions to simplify the healthcare system. The chief executives of all three firms noted the challenges that they are likely to face, but all the while expressed confidence that the vast resources of these corporations will help them achieve this goal. The project will be led by a team of three senior executives, one from each company, with more of the logistical news expected in the coming weeks and months.
This partnership could represent a dramatic change in the healthcare landscape. The track records of these corporations speak for themselves, and they certainly have the financial backing and corporate talent to make a huge impact in the healthcare industry. Traditional players in this industry including CVS, Cigna, Aetna, and United Health all suffered hits in the stock market potentially related to the news, pointing to the disruptive potential for this collaboration. However, much of the details have yet to be released, and any effects that this might have on the healthcare marketplace at impossible to predict at this point. It is also unclear what approach the group will use. Amazon has been rumored to venture into the healthcare space for some time now, and their strengths in logistical and data management, as well as the cutting edge technological innovations we have seen in recent years, suggest that they are primed to tackle the rising costs of healthcare delivery. However, we do not know what any solutions might look like, so we will have to wait and see what they can propose. One thing that we do know is that the complexity and regulatory challenges present in the healthcare industry in unlike any marketplace these companies have seen before, and this will certainly take some getting used to.
Also of note in this partnership is the focus on patient-centered care. Many groups, including our Center for Healthcare Innovation, have recognized that the key to containing the costs in healthcare is to give more autonomy to patients and physicians in making healthcare decisions. Technology can certainly assist patients in making more informed and cost-effective choices, as well as assist hospital systems in reducing spending but utilizing artificial intelligence and information management platforms. These are things that Amazon, Berkshire, and JP Morgan will likely focus upon.
The healthcare industry has been primed for change for some time. Amazon, Berkshire Hathaway, and JP Morgan have announced a partnership to cut health care costs and improve services for their employees, who number over 1 million. However, what they think up could have ramifications that affect all Americans. The name recognition of these players and the highly qualified executives heading the project have boosted optimism that a positive disruption to the healthcare marketplace is on the horizon.
CNBC; “Amazon, Berkshire Hathaway, and JPMorgan Chase to partner on US employee health care.”