AmazonBerkshireJP Healthcare: Think About Kaiser

By Clive Riddle, February 1, 2018 After Amazon, Berkshire Hathaway and JPMorgan Chase issued their press release this week regarding their employer based healthcare partnership, healthcare stock portfolios went into a tailspin and a lot of smart people have had something to say about what this venture might become. But where there is consensus is that what we do know is what we don’t know, as right know the venture is a dot to dot healthcare coloring book where no lines have been connected yet and we haven’t even been issued our crayons. The press release, while void of details, espouses technology solutions. Learned speculation surrounds their replacing PBMs, going whole hog into self-insurance, promoting telemedicine and much more. The New York Times quotes Segal Group’s Ed Kaplan: “Those are three big players, and I think if they get into health care insurance or the health care coverage space they are going to make a big impact.” Paul Demko in Politico writes that Amazon's new health care business could shake up industry after others have failed. But while citing some optimism, he also reports that ““ ‘We’ve seen these deals before,’ said Sam Glick, a partner in the health and life sciences division at Oliver Wyman. He cited Walmart and Intel as two companies that have sought to provide health care for employees while cutting out the insurance middleman. ‘It’s not news that jumbo employers are frustrated with escalating costs and lousy experiences in the health care system.’ “ A great tweet from Yale Health Economist Zach Cooper tells us "I do hope Amazon, JP Morgan, & Berkshire succeed. Health care is wildly inefficient However, it’s a bit like Mayo Clinic, Cleveland Clinic, and Partners Health coming out and saying they don’t like their computers so they’re going to form a new IT company." An Axios post by Sam Baker cautions “A new health care behemoth? Not so fast.” He reminds us “We don't know what they're even trying to do” and that “other big companies have tried something similar.” While like Sam Glick, we can point to less than stellar results from a number of other corporate forays into this arena, if we peek further back into time, we can also point to Kaiser, whom Sam Baker mentions in his post. Let’s take the wayback machine to 80 years ago: In 1933, Sidney Garfield MD establishes prepaid plan to fund care for his Contractors General Hospital and clinic providing care to workers on the Los Angeles Aqueduct. In 1938 Henry J Kaiser recruits Dr. Garfield to establish prepaid clinic and hospital care for his Grand Coulee Dam project in Washington. In 1942, at the request of Henry Kaiser, Dr. Garfield expands program to Kaiser-managed shipyards and Kaiser’s steel mill. In 1945, Permanente Health Plans opens to the public in California, in addition to serving Kaiser employees. Kaiser and their clinically integrated health care is often cited now as an example of a better system than much of the rest of American healthcare. Perhaps Amazon et al should take a long look at the Kaiser experience, and consider directly providing some levels of care enhanced by technology, instead of just relying on technology alone.