How Could the New Amazon Health Care Company Affect Specialty Pharmacy?


Health-care premiums are split between employers and employees and have been growing much faster than wages.

Putting it bluntly: Regardless of who's paying the bill (and how), health care has become expensive. In June 2013, before Obamacare took effect, 70.8 percent of workers between 18 and 64 had employer-sponsored coverage.

Why would Amazon, Berkshire Hathaway and JPMorgan Chase form their own independent company to handle employee healthcare? The trio just announced a joint venture meant to "check the rise in health costs while concurrently enhancing patient satisfaction and outcomes". They have provided few details beyond that. In statements about the new health venture, JPMorgan Chase CEO Jamie Dimon said their efforts could be used as a template for all Americans. This is a huge problem in American healthcare. But, hey, good luck to them! It would not be a new heal1th insurance company or a hospital or a pharmaceutical company, but a company that can bring technology tools to bear on making health care more transparent, affordable and simple.

"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", he maintained.

Warren Buffett, CEO of Berkshire Hathaway, said the plan, now in its early stages, is to reduce the impact ballooning healthcare costs have on the economy.

"Our group does not come to this problem with answers", he continued, "but we also do not accept it as inevitable". We've also learned most consumers do not touch the health care delivery system with enough frequency to ever be a sophisticated consumer.

"That's a group we've really been trying to reach out to", Handke said. Though it's still unclear exactly how the new plan would drop prices, Canton believes Amazon will do much to streamline what's widely seen as an outdated process for obtaining information about one's health.

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The secondary driver would be, depending on where you are in the country, your healthcare provider network may not be as responsive to your employee population. The entire health care sector in the stock market swooned on this announcement. Those fears haven't panned out, however, as the changes also helped attract more people to the service and convince existing users to choose PayPal more frequently.

"If we compare the USA systems' costs to the more affordable costs in other industrialized nations, the glaring difference is price not utilization (Uwe was right fifteen years ago, 'It's the Prices, Stupid')", declares Laszewski.

If the new entity does throw the weight of its employee base around, it could hurt the balance sheets of others in the market, noted Paddy Padmanabhan, CEO of Damo Consulting.

Those looking for a deep dive into what Laszewski thinks will actually work can check out the complete post, but for non-wonks, his bottom line seems to be this: to fix healthcare we need to control costs overall, and to do that the industry as a whole must be forced to stay within a set budget rather than gobbling up more and more of the nation's money. Cantor Fitzgerald health services analyst Steven Halper says the announcement has "more bark than bite at this point". As long as health care is subservient to corporate interests, any cost-cutting will be to the benefit of the rich, not the sick. Some see the biggest health-care deal in years - a merger between CVS and Aetna announced last year - as partially fueled by the threat that Amazon could start selling drugs. It's not just about selling drugs, however.

A visit to a primary care physician, for example, comes with an average co-pay between $15 and $25. Amazon has taught everyone how to shop far better online than in stores and JPMorgan has had extensive experience with Health Savings Accounts, which are tax-sheltered savings accounts paired with high-deductible insurance polices that eligible people can use to pay for health care costs.

And one thing Amazon knows better than just about anyone else is how to wield data about customers.