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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 me restate that, you got caught responding to a headline after parsing it incorrectly and failing to read TFS or understand WTF you were talking about.
Then you replied to yourself trying to sweep your failure under the rug.
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.
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...
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.
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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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.
I ignore Anonymous Coward posts. If you want to discuss something, that's awesome. Log in.
Although with how Amazon works if they can make it work for their employees you can bet there will be public offerings as well.
Indeed. AWS started as an internal service. Today, Amazon is primarily a Cloud Provider, that just happens to do online retailing on the side. AWS makes 3 times the profit of their retail operations.
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.
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.
C. Sagan : A demon haunted world:
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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.
Nope. Obama failing to hold out for single payer and settling for Romneycare is what cost you. Countries with actual single payer systems spend half or less per capita with better outcomes for all.
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.
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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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.
Canada has a set of per-province plans that originally covered just major injury, then were upgraded to include proactive doctor visits. The doctors are private, the hospitals are typically from bond drives in the cities and the payments are collected by employers, separate from taxes.
Works reasonably well, and backstops low-cost benefits plans the employers offer, like dental and drug plans.
For example, as a kid my parents paid into the Ontario Hospital Insurance Plan, and dad campaigned door to door on a bond drive for the Chatham General Hospital. When I broke my heel, it got fixed in that same hospital, and OHIP paid for it.
davecb@spamcop.net
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.
Profit != income. I'm like, wtf is this guy talking about? Does he think everyone working at a nonprofit is volunteering with no salary? Surely, he's not that dumb. People become doctors for several reasons. It could be for money and prestige, it could be to fucking help people, like firemen and cops aren't in it for the money. I know several of both kinds of doctors.
I find this argument hilarious given Democrats had both Congress and the Presidency and when it was passed nobody said anything about keeping costs down.
It's only hilarious because the Democrats let the Republicans have a seat at the table. So how come the Republicans couldn't repeal it with both houses and the presidency?
Health care is the Gordian Knot of US economy and society. The left struggles to involve the government selectively in order to bend the cost-curve downwards. And the right tries to fix the problem by opening up the private sector. Obamacare was a herculean attempt to join those two propositions, and it just made it past the post, with the barely-required 60 votes in the senate. Republicans discovered that moving in the other direction was just as difficult, and failed repeatedly to change anything. (Except for repealing the individual mandate, which amounts to sabotage rather than reform.)
Meanwhile, all other industrialized nations have realized what the US may never realize: you need a national health-care plan to ensure that everyone gets care at a reasonable cost. The left would love to see that happen. The right sees it as fire-breathing Marxism, and fights with all it has to keep it from happening.
If it weren't for deadlines, nothing would be late.
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.
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.
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.
Speaking as a native Dutch person who recently moved to Germany, I call complete BS to this. Since they privatised the Dutch healthcare system it has completely gone downhill. Worse care, and skyrocketing costs with reduced coverage.
The German system is dual: with both private insurance and public. Not ideal, but at least it pretty much always functions, without the horrors of privatisation.
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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.
Top payers in medical care are not a mythical one percent. It's closet to universal 20/80 distribution. Weatlhiest people paying most into the system tend to also be healthiest, and vice versa.
This is something we tend to discover in countries with universal health care. Wealthy and healthy people get annoyed that they pay a lot of taxes, and they still have to sit five hours in ER queue with all the junkies and alcoholics. It's a real problem. So they end up paying extra on top of the high taxes paying for universal health care. And then they wonder why is it that they have to pay for public healthcare which they don't use.
Which provides them with incentives to vote for the parties that essentially push to defund public sector in favour of private one. Which is now the most popular party in my country, in some part due to this. It's a genuine problem in long term, and your denials of this will create problem on your end, because while you can refuse to address reality, you cannot refuse to address consequences of your denial of reality.
That is why your desperate attempt to build a caricature out of my arguments so you can easily debunk them is not constructive. You're the one who needs to win hearts and minds to get universal healthcare to pass in US. I already have it and I wholeheartedly support it for US, so strawmanning my points on the negatives of the system will not convince anyone who isn't already on your side, and will most certainly alienate those that aren't, because they can actually read my points, and see that you're not actually addressing them.
And by the way. US is not a "private only" system. Emergency care is still universal. Child healthcare is still universal. Elderly care is still universal.
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.