The healthcare industry is in need of a shakeup. It’s why Captiva Benefit Solutions and the Health Rosetta community exists, and it’s why even some corporate giants are saying “enough is enough” and taking matters into their own hands.
In January, online retailing mammoths Amazon, Warren Buffett’s diversified corporation Berkshire Hathaway and megabankers JP Morgan announced they are teaming up to create a new, disruptive healthcare venture that will have significant impacts on their companies’ employees and their overall bottom lines.
We’ve talked a bit about how Starbucks and GM spend more on healthcare than coffee beans and cars, so it’s no wonder that these titans of industry are looking to turn the tide when it comes to out-of-control benefit costs.
Healthcare writer Glenn Luk says the three corporations have, combined, nearly a million employees worldwide with an estimated 750,000 in the U.S. That equates to about $7.5 billion per year in healthcare spending. They have every reason to be motivated.
Although the initial announcement of the joint venture was short on details, JPMorgan CEO Jamie Dimon shared additional information in April when he said the companies had begun hiring employees.
The new venture will work to align incentives–giving patients, providers and the employers a “win”–by using big data and virtual technology, Dimon said. Other focuses will include the high costs of end-of-life care and specialized medicine, as well as wellness programs, telemedicine access, customer engagement and additional improvements.
Carolyn Y. Johnson of The Washington Post interviewed a source familiar with the venture, who said that “the joint venture is not currently expected to be a new health insurance company or a hospital or a pharmaceutical company, but a company that can bring technology tools to bear on making health care more transparent, affordable and simple. The person warned that could change.”
“The ballooning costs of healthcare act as a hungry tapeworm on the American economy,” the billionaire Buffett was quoted as saying. “Our group does not come to this problem with answers. But we also do not accept it as inevitable.”
Amazon CEO Jeff Bezos famously said, “Your margin is my opportunity.” With plenty of inefficiencies in today’s healthcare industry, there’s great margins and great opportunities.
The industry is scared, and the stocks reflected it as soon as the companies announced their venture. Express Scripts Holding Co., a massive pharmacy benefit manager, saw an 11 percent drop, CVS Health Corp. dropped up to 6.4 percent, insurers Anthem Inc. and Aetna saw stock losses of 6.5 percent and 4.3 percent, respectively.
CareAndCost.com writer Brian Klepper had this to say about the Wall Street impact:
“[Y]ou could interpret the drops as reflections of the perceived fragility of health care companies’ dominance, and traders’ confidence in the potential power of Amazon’s newly announced entity. Legacy health care firms, with their well-earned reputations for relentlessly opaque arrangements and egregious pricing, are vulnerable, especially to proven disruptors who believe that taming health care’s excesses is achievable.”
Before you go throwing a parade for Buffett, Bezos and Dimon, consider this: The new venture is designed to benefit the employees of the three aligned corporations. And while the triumvirate has said there could be widespread implications to the solutions they create, it’s gonna be a long wait. Dimon said they’re at the very start of this effort and will be reporting progress over the coming years.
You don’t have to wait for disruption that fights against the opaque, overpriced, inefficient healthcare norms. Call Captiva Benefit Solutions to use tools and innovations that exist today for your company to take back its benefit dollars and give out better care than ever to employees.