Rethinking health care from a corporate position

A press release published yesterday sent shockwaves throughout the US healthcare industry: Amazon, JPMorgan Chase and Berkshire Hathaway, with a combined total of more than one million employees, have proposed a joint initiative to improve healthcare for their employees and family members, increasing satisfaction and peace of mind while at the same time reducing costs.

The news, which explains some of Amazon’s earlier moves in this regard, is being posited as health care disruption and hit the share value of health insurers hard: the main change the initiative proposes is to lower costs by acting as a non-profit company to improve service and eliminate the anxiety and problems many employees currently experience. This means moving from a model where everything is about making profit for insurers to focusing instead on the health of workers and their ability to generate value for their employers. What might be the consequences on privacy or the relationship between workers and their employers when the latter is not only providing health insurance but peace of mind? Does it make sense for your employer to take care of your health and that of your family? Would employees agree to share their medical data with their employers if it brought them more efficient and better health care?

Healthcare costs are one of the main concerns of workers in the United States. An industry equivalent to 17.9% of GDP, and that is rising steadily (4.3% in 2016, to reach $ 3.3 billion, or $10,348 per person), and that causes enormous anxiety: faced with any illness that may require hospitalization, a surgical procedure or a specific course of treatment, Americans enter panic mode as they turn to insurers if they can afford to, and try to understand what percentage of the treatment will be covered by the company and to what extent they can cope with what is not included. Donald Trump’s efforts to eliminate Obama’s reforms aimed at reducing the cost of health insurance and extending cover to more people has only increased uncertainty.

So what are Amazon, JPMorgan Chase and Berkshire Hathaway proposing? The idea is to use technology to provide easy-to-understand, high-quality, transparent, and reasonably priced health care, which seems to suggest a more focused approach to monitoring and prevention that could create opportunities in the healthtech sector. Some analysts say what the three companies are proposing is not as radical as it might seem, and is aimed more at working with existing parts of the industry value chain that work and replacing or improving those that do not.

Among the ideas on offer are home diagnostics using Amazon Echo, accessing Whole Foods resources for nutritional support, personalized diets or primary care, dispensing medicines and treatments through Amazon’s logistics, and using devices that may not be totally accurate but that are widely available (and traditionally rejected by traditional health care providers) as a way to improve prevention. With a simple device the size of a credit card I can get a complete and remarkably accurate electrocardiogram as many times as I want throughout the day, a diagnostic test for which an insurer would expect to bill me at considerable cost, and the same increasingly applies to measuring temperature, blood pressure, blood sugar levels or physical activity. The traditional healthcare providers have been slow to take advantage of the increasing digitalization of medicine using simple and widely available tools. Could a tech company’s approach drive change in the sector?

Would the initiative improve life for the employees of these companies and their families? A proposal that is not based on profits but instead on sustainability is a good start: the economic sustainability of the initiative is based on providing people with peace of mind and better health. As things stand, insurance companies charge on the basis age, sex, life habits, etc. Their resources could be coordinated more efficiently if the was to increase worker satisfaction rather than simply turn a profit. This would increase the capacity of these companies to attract and retain talent, and the initiative would probably be copied by other companies. From an economic point of view, this is about integration and disintermediation: instead of a company negotiating health insurance for its employees with an insurer, it becomes the insurer, absorbing its margins and reducing inefficiencies.

The US health sector desperately needs a total overhaul. Starting with an initiative of this kind would create a segment of employees with advantageous access to health care, but who would also likely be more productive, healthier and more committed to companies they see as concerned about their health and that of their families. What Amazon and its partners is proposing could be limited to their employees, or it could usher in major disruption to the US healthcare system.

(En espa?ol, aquí)