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Feb
1
Sandeep Singh Dhillon
If Amazon And Buffett Lift Veil On Health Prices, Insurers Are In Trouble – Forbes Healthcare
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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 https://www.forbes.com/sites/brucejapsen/2018/01/31/if-amazon-and-buffett-lift-veil-on-health-prices-insurers-are-in-trouble/#6a8a085141c0

May
19
Sandeep Singh Dhillon
Jeff Bezos’s Amazon Wants a Slice of the Multi billion-Dollar Pharmacy Market – INC.com
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Jeff Bezos’s company is reportedly looking to expand its portfolio to the multibillion-dollar pharmacy market.

Over the past few years, Amazon has held “at least one annual meeting” to evaluate whether it should jump into the pharmacy space, according to CNBC citing sources familiar with the matter. Two weeks ago, Amazon posted a new job looking for a “PHC [Primary Home Care] Licensing Program Manager” to support its “Professional Healthcare Program.” Responsibilities include submitting state license applications and maintaining “documents and databases for state board of pharmacy licensing requirements,” according to the job description. The company didn’t immediately respond to a request for comment.

Amazon also recently announced its plans to hire 5,000 home-based workers to join its customer service teams. The majority of those jobs will come with benefits like health insurance, sick and vacation time, and tuition.

Jeff Bezos’s Amazon empire has expanded into food retail (Amazon Fresh), video streaming services (Amazon Prime), web hosting (Amazon Web Services). It’s also jumped into the rocket ship race with Blue Origins. Last month, Amazon announced its plan to roll out operations in Australia, where online sales are expected to account for more than a third of the country’s retailers’ sales. At last count, the company has invested or acquired more than 128 companies in the last few years.