Amazon-Berkshire-JPMorgan Upending Health Care?
The idea is to build an autonomous health care enterprise "that is free from profit-making incentives and constraints."
Yesterday, three major corporations — Amazon, Berkshire Hathaway Inc. and JPMorgan Chase & Co. — unveiled an interesting health care project that could, at least in theory, reverberate across America. Bloomberg reports that these three entities alone employ one million people whom the companies hope will eventually have access to more affordable health care. According to a joint statement, the idea is to build an autonomous health care enterprise “that is free from profit-making incentives and constraints.”
Bloomberg notes, “The plan, while in early stages and focused solely on the three giants’ staff for now, seems almost certain to set its sights on disrupting the broader industry. It’s the first big move by Amazon in the sector after months of speculation that the internet behemoth might make an entry. The Amazon-Berkshire-JPMorgan collaboration will likely pressure profits for middlemen in the health-care supply chain.”
To date, these are the most influential companies to blink. Given Congress’ continued failure to reform health care, this is one way companies — and their leaders who have made public their frustration with health care costs — can take matters into their own hands. For example, Warren Buffett, owner of Berkshire Hathaway, penned a New York Times op-ed last year in which he pointed out that health care comprised 5% of GDP in 1960 but has risen substantially to 17% today. His takeaway? “Medical costs are the tapeworm of American economic competitiveness.”
Of course, Buffett is a single-payer fanboy, but his main consternation is on point. This no doubt explains his willingness to dabble with in-house alternatives. Investor’s Business Daily has some interesting commentary on these companies’ undertaking, including “the question of what [they] can do that businesses haven’t already tried.” That said, the experiment underscores how striving for health care affordability mustn’t involve government intervention.
“The reason this announcement is disruptive isn’t because it will dramatically alter the health care landscape any time soon, but because it shows how health care reform should work in this country,” IBD writes. “You don’t need government calling the shots to bring meaningful reforms, and you certainly don’t need the government taking over health care the way Warren Buffett says he’d prefer. What you need are private companies experimenting with solutions, competing for consumer dollars, and reaping the rewards when they succeed, or paying the price if they fail.” Their whimsy single-payer yearnings aside, the Amazon-Berkshire-JPMorgan endeavor is a truly healthy prescription.