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Amazon's Push Into Healthcare Just Cost the Industry $30 Billion In Market Cap (qz.com)
Today, Amazon, along with Berkshire Hathaway and JPMorgan, announced a plan to launch an independent company that will offer healthcare services to the companies' employees at a lower cost. The venture, which will be managed by executives from the firms, will be run more like a non-profit, than a for-profit entity. Even though the plans are vague, the news caused the market value of 10 large, listed health insurance and pharmacy stocks to drop by a combined $30 billion in the first two hours of trading. Quartz reports: "The healthcare system is complex, and we enter into this challenge open-eyed about the degree of difficulty," said Amazon's Jeff Bezos in a statement. "Hard as it might be, reducing healthcare's burden on the economy while improving outcomes for employees and their families would be worth the effort. Success is going to require talented experts, a beginner's mind, and a long-term orientation." Warren Buffett, the CEO of Berkshire Hathaway, likened America's mushrooming healthcare costs to "a hungry tapeworm on the American economy." How the venture will provide less pricy healthcare to the 1.2 million employees of the participating companies isn't yet clear. The new company will leverage "technology solutions" that provide "simplified, high-quality and transparent healthcare at a reasonable cost." Not much else, including the name of the company, is known.
The NHS costs rather less than half the percentage of GDP that the US system does and produces better health outcomes, with 100% free coverage for citizens.
I am skeptical that Amazon et al will be successful in this, but I wish them well. If the politicians can't fix healthcare, many nerds can.
This has been done before, Kaiser about 80 years ago. They created their own medical care for on the job heavy construction site injuries, doctors with modern and sufficient equipment to stabilize the injured so they could be transported to a "big city" hospital. This quickly expanded to cover health care in general. Then it expanded to cover the worker's families too. And now we have a major non-profit healthcare provider covering the western US.