health insurance
Home  »  Community News  »  health insurance
Sandeep Singh Dhillon
If Amazon And Buffett Lift Veil On Health Prices, Insurers Are In Trouble – Forbes Healthcare
Pharma Extra, Pharma Notables
, , , , ,

By Bruce Japsen , CONTRIBUTOR

Jeff Bezos’ Amazon and Warren Buffett’s Berkshire Hathaway are forming their own healthcare company with JPMorgan Chase to increase transparency for their employees, and that could be bad news for insurers and pharmacy benefit managers.

Health insurance companies and PBMs have long said they want to bring more transparency to the U.S. healthcare system, yet consumers often don’t know the true cost of healthcare. Prices are negotiated in secret and doctors don’t often know what their own services cost or what their patients will be charged.

Details of the new company the three corporate giants want to create remain sketchy, but the idea that they want to bring more transparency is one of the disclosed goals. “Our people want transparency, knowledge and control when it comes to managing their healthcare,” said Jamie Dimon, Chairman and CEO of JPMorgan Chase.

Those who’ve been engaged in the struggle to find the true cost of healthcare have been working for years with limited success. Often times, they have difficulty getting data from health plans or medical care providers.

“Resistance to transparency in healthcare remains high,” says Network for Regional Healthcare Improvement CEO Elizabeth Mitchell, who welcomes Amazon, Berkshire and JPMorgan’s new company. “Employers who pay for this care still don’t have insight into the relative value of what they are buying. They are looking for a way to have assurance that they are paying a fair price for a high quality service.”

The Network for Regional Healthcare Improvement has long said any health reform effort needs to look closely at transparency because data that reveals the total and true cost of care is difficult to find. In a report last year, NRHI said health spending by U.S. commercial insurers can vary by $1,000 or more per year per patient, depending on where enrollees live.

The potential for the Amazon-Berkshire healthcare company to disrupt the way health plans do business is one reason shares of many healthcare companies tumbled Tuesday after the partnership was announced.

Shares of insurers like Aetna, Anthem and UnitedHealth Group lost 5% to 10% of their value while pharmacy chains CVS Health, Walgreens Boots Alliance and drug makers with expensive medicines like Abbvie also took a hit on Wall Street. And the big PBM, Express Scripts, also lost more than 2% of its value Tuesday.

Nobody knows for sure what Amazon, Berkshire and JPMorgan have in mind because they said their effort is in its “early planning stages.” The trio tapped three executives to get the company off the ground: Todd Combs, an investment officer of Berkshire Hathaway; Marvelle Sullivan Berchtold, a Managing Director of JPMorgan Chase; and Beth Galetti, a Senior Vice President at Amazon. No further details were disclosed, including where the company would be located.

Some think Amazon could leverage its technology platform to make a dent in the healthcare cost curve and improve transparency.

“Amazon may spur new technology innovations” such as artificial intelligence or information sharing platforms that “can increase the efficiency of healthcare delivery,” said Idris Adjerid, a management IT professor in the University of Notre Dame’s Mendoza College of Business. “Our research substantiates this potential value. We find that technology initiatives, which facilitated information sharing between disconnected hospitals resulted in significant reductions in healthcare spending.”

Studies show 30% of the money spent on healthcare is waste. Amazon, Berkshire and JPMorgan said the initial focus 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.”

But given Amazon’s popularity among consumers and the decades of success Buffett has built with his businesses, the executives say improving patient experience and customer service will also be a target of the new company.

“These businesses understand customer service,” Mitchell of the Network for Regional Healthcare Improvement said of Amazon, Berkshire and JPMorgan. “Reorienting healthcare to being customer focused is exactly what is needed and will require massive and overdue change.”

This article originally appeared at

Sandeep Singh Dhillon
Insurance companies have made it crystal clear how Trump could send Americans’ healthcare costs soaring – BusinessInsider Malaysia
Pharma Notables

We may be roughly halfway through 2017, but insurance companies are already showing just how much President Donald Trump’s policies could rock the Obamacare market.

Insurers have submitted their 2018 plans in seven states and Washington DC for the Obamacare individual insurance exchanges, giving us the first glimpse of how they are digesting the outlook for the healthcare industry under Trump.

Over the past two weeks, two insurers have made it clear just how Trump’s policies could cause healthcare costs for average Americans in these exchanges to increase by more than they would otherwise.

In Pennsylvania, Insurance Commissioner Teresa Miller announced on Thursday that the premium for a baseline Obamacare exchange plan would increase by an average of only 8.8% for 2018 compared to this year. This is lower than the 10.5% increase between 2016 and 2017.

But Miller warned that premiums could go much higher if Trump makes just a few policy changes. According to Miller, if Trump announces he will stop enforcing the individual mandate that compels people to buy coverage, premium requests from insurance companies would increase by an average jump of 23.3%.

Additionally, if Trump stops making cost sharing reduction (CSR) payments, insurers would ask for a 20.3% increase on average. CSR payments offset the cost for insurers of providing lower out-of-pocket costs to poorer Americans. Health policy experts have said the payments are critical and without them, Trump’s predictions of a “collapse” in the market could come true.

If both changes are made, insurers would ask for a 36.3% increase, according to Miller.

“I sincerely hope that Congress and the Trump Administration do not take action that could negatively impact the progress we have made in Pennsylvania,” Miller said in a statement announcing the rates.

Similarly, in North Carolina, Brad Wilson, the CEO of Blue Cross Blue Shield North Carolina (BCBS NC), said that the company was forced to jack up their requested premium due to the uncertainty over the CSR payments and other changes form the Trump administration.

Due to uncertainty over the CSRs, the company requested an increase of 22.9% for the 2018 plan year. BCBS NC said they would have requested a 8.8% raise if not for the payments’ murky future.

“The failure of the administration and the House to bring certainty and clarity by funding CSRs has caused our company to file a 22.9 percent premium increase, rather than one that is materially lower,” Wilson told The Washington Post. ‘That will impact hundreds of thousands of North Carolinians.”

In fact, Wilson said that the market in 2017 was looking solid.

“It’s still early and our numbers for the year run about 30 to 45 days behind. But the analysis underway so far in 2017 appears to show stability in the market in terms of price, utilization, and the customer base,” the CEO told Vox.

Many health policy experts projected that the large jump in premiums for 2017 was a one-off issue as insurers adjusted their plan costs to the relative health of the market and the exchanges became fully phased-in.

It appears in Pennsylvania and North Carolina the exchange markets were close to being stabilized, if not for the uncertainty from the Trump administration.