3 ways Amazon's mysterious healthcare project could impact all of us

Amazon, Berkshire Hathaway and JP Morgan Chase join forces to tackle employees' health-care costs

The leaders of the companies-Amazon's Jeff Bezos, Berkshire Hathaway's Warren Buffett and JPMorgan's Jamie Dimon-are among the wealthiest and most prominent business executives in the world.

"The three of our companies have extraordinary resources, and our goal is to create solutions that benefit our US employees, their families and, potentially, all Americans", he said.

Amazon, Berkshire Hathaway and JPMorgan Chase have announced a plan to establish a separate company that will focus on offering health care to their employees "free from profit-making incentives and constraints". The rapidly spiraling cost of medical treatment, along with an inefficient web of doctors, hospitals, insurers, and pharmaceutical companies, have made health care a nightmare for many Americans. And its payments system could be used to automate payments with healthcare providers. It's not really big enough for that.

'The initial focus of the new company will be on technology solutions that will provide U.S. employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost, ' the statement read. The partners need to start from scratch. It could bring that same tracking to health care.

Redirect Health, a pioneer in health plan redesign and cost redirection, offers small and midsized businesses across the country a similar healthcare model focused on eliminating waste, administration and unnecessary costs rampant in today's healthcare system. "You're talking about a whole distributed health care system [Amazon] will play a role in". France does fine, and has a higher life expectancy than the US, with 2.8 nurses per doctor. "Our health costs have gone up incredibly and will go up a lot more". A primary care physician makes $217,000 a year, nearly five times the US average wage; according to OECD data, the average general practitioner's pay is higher than the average wage by a factor of four in Germany, three in France and two in Israel.

Dr Saloner says it is seen as one of the most innovative insurance programs in the country, and could be an analogue for what Amazon, JP Morgan Chase and Berkshire Hathaway might do. "But there is 20 to 25 percent wastage there", he says.

"This move by Amazon, Berkshire Hathaway and JPMorgan is affirming that we are reaching a tipping point with healthcare", said Redirect Health Co-founder David Berg.

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I'm expecting they'll probably have some sort of self-funded mechanism that still leaves room for a stop-loss carrier, but not for a fully insured health insurance carrier.

Although it remains to be seen if this new venture partially address those problems, it certainly seems like the time is right for a new player on the health care market that can - hopefully - prioritize patients over profits.

"Medical costs - which are borne to a great extent by business - have gone from 5 percent to 17 percent" of the economy since 1960, Buffett said.

The company is one of America's largest conglomerates, and its concentrated leadership-that is, Buffett's strong personality and unparalleled track record-made it hard to document a succession plan that would be perceived as positive. Even Swiss hospitals are, on average, cheaper than USA ones.

The bottom line is that the US spends almost twice as much on health care as a percentage of the economy as do other industrialized countries - while its people use about the same amount of health care. Of course, the new venture would need to help employees get passports, too. What about retired people or people with pre-existing conditions?

While there were no answers describing what the new entity will actually do, its stated mission is to provide "simplified, high quality and transparent healthcare at a reasonable cost".

In other words, it's possible for a pool of big, multinational US employers with a relatively sophisticated workforce to go nearly entirely outside the existing USA system and shake off the layers of useless regulation and bad practice that make it up.

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