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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.
Amazon got hit in the overall down day in the market, not this roll your own insurance company thing.
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
Their intentions aren't so honorable. They're just trying to break up the demand for real universal health care.
“He’s not deformed, he’s just drunk!”
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.
It certainly provides more potential than dealing the current insurance "provider" they use.
The UK's system is widely recognised as the most efficient, so the basic model - of single payer contracting with controlled hospitals - has a lot of efficiencies to offer in the American context. In the light of the news that the arrival of an Amazon distribution centre LOWERS the wages of warehouse workers, perhaps we will see this happen to doctors...
https://www.economist.com/news...
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.
46137
Three of the most richest men in the World... sat together for a talk about something that doesn't concern me... and it cost my life savings $5K within just one day. What the phuck? I don't even know these men, yet they manage to take money out of my pockets and there's not a damn thing I can do about it.
IIRC, the german public health insurance companies are basically companies who are competing with each other, but may not turn a profit.
It would be quite ironic if some billionaires will manage to basically set up socialized healthcare in the US this way, and out-compete the current HMOs!
I do IT for a small grocery store chain and we went self insured a few years back now and we've saved a ton of money doing it.
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How the venture will provide less pricy healthcare isn't yet clear
Unclear whether this is a typo for less pricey or less privacy. Knowing Amazon it might be both...
And that would be capitalism. The FUD campaign waged by medallion cab drivers against Big Bad Uber is a child's sandbox fight compared to Amazon going up against America's most monopolistic industry.
It used to be a shipyard, remember ... this has been done before, and it worked then too.
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.
C. Sagan : A demon haunted world:
http://www.amazon.com/gp/product/0345409469/
visit randi.org
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.
Apart from a charge for each prescription of about $12, there are NO other copayments for most conditions. There are charges for dental and optician care, but that's pretty much it. It's not perfect; there are queues and delays, but in terms of bang for your buck, it's massively better than the US system.
health care. You can't have a for profit system built around something complex, expensive and life or death. Because people can just keep raising the price and you'll pay it or you'll die. Hell, our for profit system of agriculture only barely works with a _lot_ of government interference and subsidies and even then it relies heavily on borderline slave labor. This is why America spends more and gets worse outcomes to take care of less people. It's also why it costs $32k to give birth here and we still have the highest maternal mortality rates in the developed world.
Anyway, Single Payer Now. Medicare for All.
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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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I wonder what else the USA is going to "invent" by copying off other countries.
True single payer health
The metric system
Gun Control
And if your risk pool is large enough and broad enough, you can save a SUBSTANTIAL amount of money.
"We receive as friendly that which agrees with, we resist with dislike that which opposes us" - Faraday
Lower cost means lower care. Doctors know what insurance patients have and how much it pays them. The difference is you get two minutes in the exam room if you are poor or thirty minutes and a referral to a specialist if you are wealthy. Money talks.
The majority of the health insurance companies in the country are led by CEOs who are either billionaires on their own or will be by the time they cash in their retirements. Many of them decline $30B worth of claims - or tell providers to eat $30B worth of billable service - in a week without thinking twice about it.
On top of that, the health insurance industry bought Washington DC years ago. They got most of their ROI in the form of the ACA back when Obama was president; they know where to turn if they need another bailout.
Damn_registrars has no butt-hole. Damn_registrars has no use for a butt-hole.
Seriously: our health care "system" (in quotes for a damned good reason!) is a complete and total clusterfuck. Yeah, if you have squillions of dollars and/or the most super-ultimate health insurance (at the moment...), you can get pretty damned decent care. Fall off of THAT island, though, and you land in a swamp of uniaginable, Rube Goldberg-like complexity that is designed to do one thing and one thing only: separate you from as much of your money as possible. Period. End of fucking story! I once spent 9 years working for a company that provided IT systems to hospitals for billing. We had the most technology in the hospital....for billing. The scope of change needed is vast and while I'm a tad skeptical, Warren Buffett's involvement gives me more hope. He's a Good Capitalist.
Amazing! An amalgam of successful capitalist thinks a nonprofit is better than capitalism for "reducing health care's burden on the economy while improving outcomes ". They should know.
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.
...pro healthcare and think the US system is a little crazy and full of absolutely insane defences for financial practices that would never be acceptable anywhere else...
Isn't this a vertical monopoly that allows Amazon to fully control these peoples' lives?
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.
and raise you an NPR Article and a BBC one too.
Our health care sucks, particularly in rural areas. And you can't blame that on the US being spread out. Look at Canada. Better outcomes and just as if not more spread out population centers.
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It really is, at least up until the 50s and 60s. There were several times when single payer was put on the table in our history and each time it was shot down because the progressives insisted it cover everybody and the racists insisted they shouldn't have to pay for minorities. At this point the private insurance companies have so much money they can just buy elections; and if there's ever a threat of single payer passing is life or death for them to kill it. So even without racism playing it's part it's damn near impossible to get it through.
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single payer healthcare, just like the rest of the civilized world.
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Next step is for Amazon to open up their insurance to Amazon Prime subscribers and become the largest health insurer in the U.S.
Losing market cap isn't a cost.
Market cap and a company's viability and produce are unrelated.
Sorry, no story here.
My buddies an I often sit in front of the fire and solve the worlds problems. Healthcare is one of my favorites. We like to look at what exactly causes the high costs and address them one at a time... (Completely ignoring things that work or don't in other countries, because those are saved for discussions like "what works and doesn't in other countries") Here are some of our ideas relating to healthcare.....
Tax rebates for high cost medical equipment. This addresses the high costs of medical equipment at least a little, and helps maintain profitability in creation/manufacture/research of said tech.
Transparent pricing, no hidden fees, like every damn thing else traded for American dollars. That $.03 asprin is only $25.00 because you can't just say "no thanks, I can't afford that today.", so the market will bear any price. If it's painful, good, get your shit together healthcare. It's damn sad that I can check the costs of airfare across nearly an entire industry run mostly by brain-dead customer service people (which is also bogged down with massive regulation hoops and legal liabilities) in two minutes, but an industry run by over-schooled and highly paid professionals who are often smarter than I am can't seem to write a complete legible sentence or count past $100.00 without the insurance mans help.
Free government funded tuition for in demand medical field studies, paid for by taxes paid on medical practitioners earnings. (much like the industrial taxes I pay now pretend to cover industrial overhead) This addresses the licensed doctor shortages... For profit schools will love this shit, and the socialized education camp gets a win. Free doctor/nurse/med-tech/ect... training!
Immunity to malpractice accusations and court nonsense on all non-trivial procedures. People are going to die under the knife. You can choose to just die, or ask for help. With transparent pricing and lower overall prices, it's on the consumer to do their research when seeking a "family doctor". This all but eliminates the insurance against insurance bullshit driving costs through the roof. Personal responsibility time folks. Buyer beware. I know a LOT of people that travel to other countries to have medical procedures done and take a vacation while there- for half the price of half the care in America. They do their research before they buy a ticket. Seems to work.
State level cooperatives negotiating pharma prices, which are allowed to shop outside of the country. This addresses 500% increase games on life-saving drugs due to the captive market, and ends the market for smuggling life saving drugs that is fueling organized crime. This is so fucked up by the way... and also leads to the next one....
University and government funded research CAN NOT BE PRIVATE. Breakthroughs and moonshots in the medical field should be shared if funded on the public dime, and works and studies encouraged. Patents never granted on medicines derived from government (citizen) funded research. I've never understood how breakthroughs achieved and sciences explained/attained at state universities is not public by default. Who in the hell came up with the current system and how can they sleep at night?
I'm just another nerd pissed off about 15k emergency room visits and $30000 stillborns. I have no idea how these things would pan out, but nobody else ever seems to put forward any ideas addressing what seems to me to be the sources of the high costs of care that require the money sucking insurance companies to begin with. You gotta do more than creative accounting to fix this, and lives are at stake.
I imagine Amazon will drive costs down by sheer volume, access to data, simplicity, reliability, and scope of options. (Based on your shopping habits, you might also like.... a colonoscopy! available from these practitioners...)
The only thing more fun to discuss than American healthcare is American law enforcement. Hooo-boy do the tempers flare on that one.
You are being ripped off every second of every day, so that advertisers can help rip you off even more tomorrow.
Billing codes. The body mutilator!
Really though, One of the things I've said about health care is that we could easily care for patients without all that overhead. Thing is, just like Brawndo, the economy sort of depends on it. Until the plants actually start growing again, this is going to hurt.
For all intensive purposes, "whom" is no longer a word. That begs the question, "who cares"?
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.
I hope Amazon et al shake up the "health care" industry. Making money on providing medical care should be illegal.
Amazon et all seem to just be replicating Kaiser which created not-for-profit hospitals to provide their employees and their families with healthcare about 80 years ago. Today Kaiser is a major healthcare provider for the general public in western states.
Various churches also offer not-for-profit hospitals. Locally we have Loma Linda University Medical Center, a full service and level I trauma center for the county.
Not-for-profit hospitals aren't really anything new. And companies providing medical facilities for employees and their families isn't exactly anything new either. Besides the large scale like Kaiser there are also small clinics on various corporate campuses, some with capabilities on par with small urgent care facilities. Best of luck to Amazon, perhaps they can help modernize these sort of efforts.
And neither are you, so stop prescribing your snake oil for me.
The main motivation here is profit. When a company is able to know cancer is a problem with their employees quickly, it is easier to plan for it and potentially cause some attrition. This is about access to medical records for more corporate profits, nothing more.
My dad financially ruined himself with *JUST* healthcare premiums between ~2000 and ~2010. His medical insurance for the past 40 years kept jacking rates up on him after he retired from corporate life to find a more fulfilling personal job.
From ~150/mo per person for a 4 person family up to 750 each for two of them and 350/mo for the other two. At once point it was based on age, at another it was based on 'pre-existing conditions'. Needless to say blowing over 2 grand a month just on medical insurance sent him from having a nice comfortable retirement next egg to basically destitute before he reached 'official' retirement age. And subpar coverage that entire time. Now all of a sudden when there is medicare to suck off, they started providing him all the tests they'd been denying him for the past 15 years. He switched providers ASAP once he had medicare supported options, but the pre-existing conditions axe weighed heavy on his choice not to change providers.
I personally haven't had medical coverage since my 20s and haven't been to a doctor since, knock on wood. At this point in time I'd sooner die than trust my life to another random health insurance doctor, and in my region that is all we have out here, unless you can pay top dollar for a private doctor (which aren't necessarily any more competent or lifesaving than the aforementioned.)
That 1.2 million includes me, and though we just got a new plan option that saved me a boatload, I'm looking forward to the possibility of saving even more.
...cosplay as the other sex? A man who chops off his his dick and wears a dress is still a man, albeit dickless.
One of the features of being an EU citizen is that you get equal access to other EU countries' health systems - but need to apply for a card to obtain it. I applied on line, and it arrived within days. You were obviously unlucky. And remember, you wouldn't have needed the card to get medical care; turn up, explain the situation and you would have got treated.
Amazon.com looked at their bottom line, and they saw one very large expenditure that they had zero control over, and no ability to optimize. What do you think that was?
Employee healthcare costs!
Now, I recently had to get an albuterol inhaler. Albuterol is cheap, it was created in 1966. But inhalers, where they put a tiny bit of albuterol into an aerosol spray run like $65 after insurance contracted discount. That is INSANE!!!!
I'd be surprised if those inhalers cost more than a $1 to manufacture. So imagine, AmazonBasicsHealth offering a similar inhaler for $4. This monstrous price hike is extremely common. CPAPS are basically over-glorified aquarium air pumps. Yet, they cost around $2,000. And many who have utilized, will attest to the fact that the designs are often poorly thought out and build quality lacking. But hey, that plastic tubing is FDA approved, so you get billed $20-$80 for a hose that probably cost 79 cents.
So Amazon looking at this, can easily be like,....well we don't need to make a profit. Because, if we simply sell RX and services at cost, we can reduce our employee overhead by around 10%-15%. For Amazon, a 15% reduction of employee costs is a huge profit margin increase. And Amazon.com is big enough, that once they get it on the ball, can be very disruptive. They can go, and say to a manufacturer, we want a good CPAP for $500. If they don't relent. They design and build their own, and then sell it for $200. The companies will either have to come to the table or face eradication.
But the big thing is services....the doctors and nurses themselves. I've thought that the solution to this problem is to actually fund free medical school - with the catch being that half of a doctors time for the first 20 years or so is obligated back to either the company or community.
Three of the world's biggest capitalists have decided that capitalism doesn't work in the healthcare industry.
They are all too big which is why I won't do business with any of them.
profits come out of Amazon pockets. To lower healthcare cost you have to remove the profit and the overhead. They need to create a nonprofit healthcare service company that will own hospitals and clients and that has doctors that work for them. They can then offer this as an health care option to their employees at zero out of pocket cost.
You're just arguing to argue then. Nobody here is so stupid they don't recognize a finite resource. You're just so stupid you can't recognize artificial scarcities.
What the fuck are you talking about?
Obama may have wanted to foray into socialized healthcare but he got smacked down and it died just like it did in the 1990s. He ended up signing a bill that mainly just served to make people have to do business with private insurance companies (as opposed to, say, government instead). Republicans were ok with most of that and had been pushing for such a bill for a couple decades, but then the conservative party (Democrats) slipped a "you have to pay your bills" part in.
That one part, mandatory coverage, is what ended up being so divisive and controversial.
The hippies (Republicans) were super-pissed about the having-to-pay-their bills part, so their goal in 2017 was to remove it. That (going back to publicly subsidized healthcare by means of Emergency Rooms) is the biggest step we ever took toward socialized medicine, but more as a symbolic statement (things should be free; you shouldn't have to get a haircut or a job) than an actually government-run healthcare system like UK has.
If there is some part of ACA that reminds you of socialized medicine, please tell us about it. I totally understand you hated that your bills went up, and I'm not mocking you for that, because you damn well do have plenty of reason to be angry and discouraged. I'm just saying that you aren't paying very close attention to whom you giving all that money, and more shockingly (I can't understand how you fucked this part up), you totally missed where the actual medical services are coming from.
Next time you're with a doctor, please look more carefully around the room and please, please try to point at the person who is working for the government. I bet you can't.
ACA was classical government corruption, except with a weird conscientious "no more freebies" slipped in by conservatives, that the hippies have been furious about ever since, and finally won the 2016 election over,
The biggest problem with US Healthcare is the games they play with pricing.
If they would charge reasonable rates, a LOT more people could afford health care, even without insurance.
Example? Thought you'd never ask
Ten years ago, I had a heart problem fixed. Amount billed? A bit over $483K. Amount settled for? A bit under $75K.
So - without insurance, I'd be dead - no way I could come up with nearly half a million dollars.
But $75K? Of which I provided &6.5K, BTW - I could get a loan, take out a second mortgage. I could do it.
But I wasn't offered $75K.
Stop playing games with the cost, and people will be able to afford getting healthcare.
Yeah, no.
I'm more convinced by the McKinsey analysis that RCA begins with than the rest of that article. And the Stiglitz report it links to doesn't prove what is claimed, at all.
In other words, "I don't have any substantive objections and my sole contribution here is to blithely paste links to widely cited documents that just about everyone has already seen". Why even bother?
I'll take science over expertise any day. I am especially wary when the so-called expert analysis is a little more than the rudimentary analysis of a bunch of kids fresh out of school with only a skin-deep exposure to these topics (I have known many such people, including peers of these authors, and while most of them are reasonably intelligent people, their bluster far exceeds their subject matter expertise).
As for Stiglitz, he has not published anything on healthcare and shared any sort of rigorous analysis, so far as I can tell, so I see no reason to defer to his professed (left wing) preferences. He has, however, published stuff closer to his knitting with Amartya Sen, Jean-Paul Fitouss, and others that pertains to the discussion. Indeed, they recommend AIC and AHDI over and above GDP as an indicator of material living conditions.
Here are just a few instructive quotes:
As a source? No, I don't think you don't understand. These services, of which Legatum is just one, have helpfully aggregated a wide variety of indicators from various 3rd parties that measure the sorts of lives that people live (health, happiness, material conditions, etc) and these indicators are overwhelmingly better predicted by household measures like AIC, the same measures that Stiglitz et al recommend, than GDP.
For instance:
Social Progress Index:
So, in Bezos version of health care, do you have to meet some bare minimum of worthiness to get health care?
Cull the bottom 10%? Only allow the rockstar, superhero, Alpha, bar-raisers to get treatment?
Amazon's culture of arrogance isn't likely going to result in a good outcome for patients.
What is Bernie Sander's take on this?
Self-importance and self-indulgence is the root of ALL evil.