Amazon, Berkshire Hathaway, and JPMorgan Chase & Co. just announced they are forming a new company to reduce the healthcare costs for several hundred thousand of their employees in the United States.
When making the announcement, Berkshire Hathaway Chairman and CEO Warren Buffett stated “The ballooning costs of healthcare act as a hungry tapeworm on the American economy.” Strong words on parasitic intestinal dwellers from the Oracle of Omaha, but this rather harsh indictment will undoubtedly ring true with executives and board members concerned with the P&L impact of escalating healthcare expenditures.
Amazon was long rumored to be entering the healthcare sector, but an employee health play in concert with two other heavy hitters was somewhat unexpected and had an immediate negative effect on the shares of many healthcare companies.
For those of us who work in the employee health space, this news is perhaps less surprising. As a player in the occupational health IT arena, I have witnessed our large employer clients rethink and expand their occupational health clinics — moving beyond the treatment of worksite injuries and illnesses and compliance with OSHA regulations to offer primary care, wellness programs, and chronic disease management initiatives.
Medical surveillance programs created to make sure those exposed to noise, chemicals, and other on-the-job risks have the required tests and exams are now being re-engineered to ensure employees with diabetes have regular foot and eye exams and A1c tests. The same clinic that treats workers who slip and fall at work is now taking care of employees with strep throat.
While traditional healthcare providers struggle to operate in a world where reimbursements are increasingly tied to quality outcomes, businesses who understand quality, innovation, payment for performance, and value creation are well positioned to change the game. Technology surely plays a major role, and the effort announced by these new entrants will focus initially on technology to enable “simplified, high-quality and transparent healthcare” for their employees.
When the diagnosis reveals a tapeworm, most patients will no doubt want to rid themselves of the offending interloper as quickly as possible. Amazon, Berkshire Hathaway, and JPMorgan have their work cut out for them, but they and other employers are tired of putting bandages on the bottom line — and their combined resources and wherewithal put them in an ideal position to disrupt the status quo.