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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.
Medical care is free in the UK? Physicians, nurses, and medical technicians work for no salary? Power companies provide electricity to hospitals for free?
No, nothing is free in life. There are very real costs that the NHS pays for, and they pay for those costs with very real money. Revenue that comes in via taxes. Taxes paid for.... by citizens of the UK. No, it is not 100% free coverage for citizens.
If you want to make a fair and reasonable comparison, you need to include the full cost for both models. What is the full revenue in both countries taken in by providers and pharmaceutical companies? How much of that is paid for by the people receiving care, whether directly (copay, deductible) or indirectly (taxes)? This must include private insurance as well as government-sponsored plans (NHS, Medicare, Medicaid). What is the overhead siphoned off by government and insurance? How efficient are both models? This is a complex issue and dismissing it out of hand as "UK has free medical care" is a huge oversimplification.