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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.
Let the "for profit" blood suckers get rocked on their heels a little. After all of the reasons that they have found to deny people care that need it, fuck those big boys.
Let me restate that... Insurance companies got caught in the market day.. Not by Amazon's roll your own insurance thing.
The overall market fell by about 1%, mostly because of the fall of the health industry, which represents about 18% of the American economy. Some health companies fell nearly 9%. If you take health out, the rest of the market barely fell at all.
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.
Oh yeah right. The NHS is widely known as the most efficient. Give me a break...
The rest of the modern world looks at the USAs health system and just shakes their head.
Every other modern western country uses government run primary health care, usually overlaid with a smaller private system.
The private system gets used for those who want a specific surgeon, less wait time, or elective procedures.
but, in the land of the free, home of the brave, god forbid if someone who made poor health choices got treatment from my tax dollar: let the loser die or least be a debt slave for life.
Bezos should be advocating for government funded primary health care: not yet another private system.
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How do health care 'er' cough, cough, make money. They charge more in premiums than they allow in payouts. Hmm, compulsory health care for company employees, how do you reduce cost, deny payouts. I doubt very strongly that if my healthcare was dependent upon a company who first and only goal were returns for shareholders and they were deciding whether they would pay out or not, that I would be willing to work for that company.
Think about euthanasia laws, how many corporations would put you down, if there return on your future employment was lower than the cost of health services, if they could get away with it (just remember all it takes is a tiny handful of them to bring in those laws, couple of hundred control freaks and no matter what tens of millions say, it happens).
Single payer sounds a whole lot better, than allowing my employer decide whether I live or die, especially when their publicly declared number one priority is returns to shareholders and their desire is ZERO payouts.
Chaos - everything, everywhere, everywhen
Unnecessary tests and pharmaceuticals. Doctors use unnecessary tests to protect themselves from lawsuits. Then there's the medication problem.
the-myth-of-drug-expiration-dates
The government needs an independent lab to determine the expiry dates, not big pharma.
drug-firms-shipped-208-million-pain-pills-to-west-virginia-town
drug-company-payments-mirror-doctors-brand-name-prescribing
I also have to wonder if doctors prescribe drugs as the easy solution instead telling the patient to make lifestyle choices.
These are big companies with lots of employees, they are already bleeding huge amounts of cash to fund health programs for their employees in a broken healthcare system. They're going to pool their resources together to create a new company, not with the goal of making money out of the venture, but with the goal of reducing the costs they already have within their existing companies. Due to their size they'll receive immediate benefits by having the clout to bargain with the big pharmas and that clout will only increase as they offer this to the rest of corporate america.
It's another game changer from Amazon.
"Oh yeah right. The NHS is widely known as the most efficient. Give me a break..." compared to the US model, with the outcomes it has right now, the total cost , and the coverage ? Yes it is far more efficient than the US model.
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You say that like it's their fault. Think of the stock market as a big grid on the ground and a million chickens. Occasionally someone tosses in a handful of corn and occasionally someone blows and air horn. The chickens respond as chickens will.
You pick a square or two on the grid. At the end of the day, if your square has the most chickens on it, you win a prize.
It's a bit like no limits cow patty bingo for city folks. If you don't believe me, how come 3 guys making noise in the corner caused such a change in the market?
Periodically, the SEC makes a move to keep the market moving. The decision making process can be a bit confusing. Here's a helpful video.
with fairly healthy people. My bro worked for a small company that tried the same. He had some health problems so he was politely told if he signed up for the insurance he'd be fired.
The best way to do insurance of any kind is to have as many people chip in as possible. Buying power gets rates down, and that's what's got the health care industry worried. As more and more companies consolidate an buy each other out we've got fewer and fewer employers, but that also means that if a few of them get together they can exert enormous pressure.
Of course, if you take this to it's logical conclusion the largest pool of insurable people is everybody; e.g. single payer health care. But once you've got a for profit insurance industry it's almost impossible to do away with it since they'll spend every penny they have to make sure folks don't realize they don't want or need yet another middle man.
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We don't have to nationalize anything, but the government should be allowed to compete. Then we can have more clout in determining prices and services. The law you speak of was specifically set up to benefit the insurance industry. Through a much older law, the government is specifically prohibited from negotiating for better pharma prices. These are the things, among others, that make medicine expensive in the US.
“He’s not deformed, he’s just drunk!”
Err...if you didn't allow anyone to make money (a profit) with healthcare, why would anyone go into that industry for a lively hood?
I doubt seriously there are that many altruistic people out there.
I mean, if you're a Dr...why would you sacrifice 4 years of medical school, plus internship years, plus extra years if you are specializing...on top of college, if you didn't see a payoff in the end that was worth your sacrifice up front?
Why would anyone develop medical equipment if they weren't going to be rewarded for it?
Hell, why does anyone do anything if they couldn't make money at it?
Seriously, where is this mythical Shangri-La that you are referring to where people work healthcare, the long hours, research etc.....and don't count on making money at it...?
Light travels faster than sound. This is why some people appear bright until you hear them speak.........
Nice miss-interpretation, make a lot of money in the industry do you?
As I am *sure* you know, your example is BS.
There is plenty of competition at the staff level, so income is in general sensible.
There is practically NO competition at the insurer/provider level. This has been remove from the system through regulatory capture and other techniques for a lot time now, and the price is being paid.
If there is no competition, then the consumer suffers, and 'suffers' in the context of health is, eventually, dies early.
So, the cost of the high profits of insurers and providers is the deaths of consumers.
Care to try and defend that?
The only two solutions are enforced REAL competition (which does not mean two 'friendly' huge providers colluding), or state regulation of prices.
It might do better if it was allowed to negotiate drug prices. Beyond that, I made clear I was speaking of OTHER COUNTRIES that have single payer. Does medicaid fit that description?
If as a consumer you want to save your hard-earned dollars (e.g, you have an HSA) when you need healthcare in the US, tough luck - you can't. The US health care system is not set up to enable anything like the usual way we shop. It's like being forced to buy things on recommendation from a stranger without knowing the prices for anything until you get your credit card statement. And then experiencing utter sticker shock at the cost!
Case in point: I went to the doctor for a check up. The doctor had no idea how much it would cost me for the checkup or how much any of the recommendations she made to me would cost me. So I asked the insurance system. They couldn't give me a price or even a quote, and only pointed me to a web-based useless "calculator" that gave rough numbers. It's not surprising, because the actual cost had been negotiated by some unseen, unknown entity (my employer? the company my employer contracts with?) and it certainly wasn't ever to be shared with a lowly patient/employee. The only time I could find out how much it cost was when I received the bill. And it was outrageous! Over $200 for a simple look-see. The doctor had claimed it was the "annual checkup", which was much more expensive. Apparently, there are multiple types of check up, with the cheapest being $60, but there's no way to request that, or know what you are getting in advance. Other procedures are completely opaque too and often involve bills from multiple entities. My wife received bills from approximately 6 different entities after an ER visit for concussion, including the individual doctors, the MRI, the CT staff along with billing for various bits and pieces (tubes, packs, etc.) that apparently were used. What a load of crap.
Another area that the health care system needs to address is their methodology of tracking the status of health issues. Currently, they run completely on the squeaky-wheel system. If the wheel don't squeak, it's not an issue any more. (Doesn't matter if the wheel has crumbled into dust or not!). As engineers, if we find an issue we usually have a process to track progress to resolution. Not in the health care system! It's completely random and ad hoc. You as a patient have to manage your own "bug tracking" because no one else will. They seem to be pretty good in tactical situations, but anything that isn't an easy fix, or takes a long time isn't handled well at all.
I'm glad that this is happening. The system needs a really big kick up the butt.
Actually, you can by looking at comparable economies and/or by judging in terms of the country's GDP.
Note how those other countries spend less of their GDP on healthcare and how their populations last longer. Before you claim it's better eating habits, have a look at the U.K.
Honestly, no sane person honestly thinks any Western nation spends more on healthcare than the U.S. and no sane person honestly thinks health outcomes in the U.S. are even in the top ten.
it's just no one with the authority to do so has the spine to make the decisions necessary to make it happen.
Well, that and *campaign donations* tend to ensure the status quo remains the status quo.
"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."
The only thing you need to do is take away the health care and Big Pharma industries ability to charge whatever they want for their products or services and you'll stop this problem stone cold.
You need only speak the words that shall not be spoken ( Regulation ) within earshot of said industries and watch how quickly they'll be willing to compromise on what they charge. They do for a while until the latest scandal becomes a fleeting memory, then it's right back to business as usual.
Quit threatening it and just do it.
When a single trip to the hospital is capable of bankrupting all but the insanely rich, it's time to burn it down and rethink the issue.
I don't want, nor need, vouchers, coupons or reduced insurance premiums that do nothing but increase over the long term. Fix the problem at its source and you fix the " economic burden " it has become.
When people have more money in their pockets to spend on something other than ludicrously priced healthcare, the economy tends to benefit from it.
So it's just a coincidence that EVERY country with a single payer system spends less than the U.S. on healthcare per capita than the U.S.?
When you pull the door and it doesn't open, do you keep pulling or do you try pushing?
I see that health care costs are going up all over, but looking at Canada for example, the rise flattened out for a while when single payer came into effect. So even as costs went up, they went up slower with single payer. Of course, with an increasing population, increase in expendature is to be expected. The U.S. could use slower increases in expenditure for a while.
So let's look at a larger sample. Indeed, it's going up for everyone, but nowhere is it going up faster than the U.S. and nowhere is it as expensive as the U.S. Can you explain why the U.S. would be a special case other than we are the one without a single payer system?
They say you get what you pay for, so the U.S. should be at the top of the charts for healthcare. OOOOps, or not.
Well, Americans must live longer and so cost more. Dang, wrong again.
Looks more like a fool and his money are soon parted.
My understanding is that the main opposition political right has to national health care plan is that it will significantly raise taxes on everyone, while lowering the quality for the top payers.
Which is true. That is how socialized medicine works. To most of us across Europe, that is an acceptable deal. US has a much more "free do succeed or fail" spirit, which makes it unacceptable.
Even here in Finland, if you want high quality care in many fields, you have to go to private sector. We're considered what, top 3 of the most efficient medical system in the world, and right now, it's quite grim. I had to book an appointment for dentist to check my teeth for my once-every-two-years dentist check (they won't allow you to have them more often, and yearly check is done by a hygienist, not a doctor). They couldn't even give me a date when it would happen. Six months wait minimum I was told, and they'll tell me some time in the future when my place in queue is up which of the local private providers I will have to go to to get my teeth checked and when.
Or I can just go pay a lot of money at a private clinic. Being healthy and never really having had any significant teeth problems throughout my life, I don't need to bother. Most people, not so much. So they pay an arm and a leg for private care. Care quality will be the same, because guess what? It's a "purchased service", which is the phrase used for "regional government (which has to provide universal healthcare) buys the service from private sector".
Situation is better for GP, where I only had to wait about a month for my yearly appointment to get a basic health check. Specialist care? Same thing as with teeth checks. Expect three to six months wait, where you can't even ask for specific date for an appointment. You're just given one at some point, and if you don't like it, back in the end of the queue you go. For this reason, private health insurance for children has skyrocketed. You can wait to get medical care for yourself, but your child? Not so much.
And if you're employed at a sizable company, guess what? You get private healthcare because it's mandated by law, to be paid by your employer. Which doesn't have those queue times.
So to pretend that there aren't pros to private-only system is folly. You need to understand that there are pros and cons to each system, and when you misrepresent this in an attempt to sell universal health care, you'll get overwhelming rejection when people notice that they have been fooled. Not a good long term strategy, as people are discovering with "you get to keep your doctor" and other Obamacare debacles in US. Be honest, inform people of pros and cons of each system, and put it to a national vote. I imagine you could probably win that one on universal healthcare. Time seems to be ripe for that in US.
Because in the end, the best system is to have public system that ensures that everyone is provided with minimum healthcare level that lets people stay productive.