In January, three major corporations- Amazon, Berkshire Hathaway, and JPMorgan Chase, announced they will join forces to form an independent healthcare company for their employees. They are offering a “not-for-profit” system for their own employees, with the potential to be extended to all Americans. They are hoping this will lead to lower healthcare costs and better medical outcomes for their employees.
Why The Alliance?
The alliance between these companies is due to the frustration of businesses with the nation’s healthcare system and costs for medical treatment. In an interview with Business Insider, JPMorgan CEO Jamie Dimon said “Look, America has an issue, OK? We spend 17% of our GDP in healthcare. You know we have the best of all worlds, some of the best healthcare in the world. And the worst of all worlds. We don’t do very good preventive medicine. It costs too much.”
The companies are self-insured employers. This means that when an employee goes to the doctor, the employer is paying the bill instead of a health insurance. The goal is to help make their employees healthier, therefore reducing healthcare costs. JPMorgan has lowered deductibles for employees making less than $60,000 a year, and even lower depending on how healthy their lifestyles are. “If you do your wellness stuff now, if you take care of yourself, if you don’t smoke, we give you benefits and the deductible effectively goes to zero,” he said. “So we’ve kind of really made it easier for folks to get proper medical care.”
“We said, we know we can do more. We know we can do more just thinking through every single part of it,” Dimon continued. “Whether that be giving employers more information on their phones, which could in turn help with their overall wellness. Keeping employees healthier for longer in turn, could cut down on healthcare spending by preventing patients from getting sicker.
What This Could Mean
The three companies will no doubt make a big impact on healthcare coverage. Giving incentives for employees to become healthier will not only lower the costs for them but essentially be beneficial for the employees. Lower deductibles and healthier, happier lifestyles would be the outcome.
Amazon has begun making its way into the medical world by launching an exclusive line of over-the-counter health products to hospitals and doctors’ offices.
“Some of the ways Amazon could use its know-how to make a dent in prices: Negotiate rates directly with health care providers and drug manufacturers, use technology to ease consumers’ ability to make appointments or consult with doctors outside of the office and improve access to price and quality information about physicians, procedures and prescriptions to allow consumers to shop around,” said Frederick Isasi, executive director of FamiliesUSA, a health care advocacy group.
If these three corporations succeed in the model they are proposing in order to lower medical costs, hopefully it will be adapted and extended to the rest of the country. This would mean Americans can receive affordable healthcare, which is appealing because the future of healthcare is unsure right now with government reforms taking place. This model may work and it will be interesting to see it unfold in the near future.