New health care initiative by Amazon, Berkshire and JPM-C

[bobandsherry]

That is exact that. In the end, it will be all for show. It may save the three companies money, but not the workers. Odds are, the employees have a highly subsidized plan already.

I can't speak for A or B, but J certainly does, especially for lower paid workers (under $60K).

 

[athena53]

I can't speak for A or B, but J certainly does, especially for lower paid workers (under $60K).

I think that the Berkshire companies operate independently so maybe it depends on the entity. My brother ER'd a couple of years ago from a company that Berkshire bought prior to his retirement. He's 61 and had a generous DB pension and paid retiree health insurance. The paid retiree health insurance just went away as of 1/1/18 and he and DSIL are paying $22K/year for private health insurance coverage. AFAIK, they don't qualify for subsidies.

Fortunately they've always been LBYM and should be OK- but it was a shock.

 

[Chuckanut]

If the "toys" are instrumental in saving lives, well, then maybe. But when I see hospitals spend a fortune to make the place "look nice" including glass walls with view of their outdoor atrium, wood paneling, wood and chrome accents, etc, well, that's just spending money to spend money. Hospital I went to previously had fresh flowers throughout their lobbies (they had two) and other public areas, replaced on a daily basis. And these were not small arrangements, no joke they were easily 30" high in expensive looking vase. That's just silly to spend money on crap like that.

The local public hospital near me is pretty good overall, but I have to say that it is definitely a huge monument to over spending. The lobby is multi-storied with a fancy piano and all sort of elegant touches one would expect in a luxury hotel - flower displays, fancy artwork, a grand piano, etc. etc. etc. Granted, I don't want my hospital to look like the inside of a Borg cube, but I have to wonder if this is money well spent.

 

[CaptTom]

If they can disrupt the current system, I wish them well.

I thought most Megacorps were already largely self-insured, just paying the insurance companies to administer the plans for them. If that's all this is, clearly it's not the answer.

The whole point of insurance is to spread risk over a large pool, on the assumption few will need to draw on it. Routine health care seems ill-suited to this model.

We all need regular check-ups and minor procedures on an ongoing basis. There's some logic to the effort by many companies to push high-deductible plans. You're basically insured only for those rare, high-cost problems. Even then, most people will eventually need something expensive.

I don't have the answers. I think there are a lot of components to this problem, which have already been covered here. What's needed is a breakthrough; a disruption; a new model.

 

[bobandsherry]

I think that the Berkshire companies operate independently so maybe it depends on the entity. My brother ER'd a couple of years ago from a company that Berkshire bought prior to his retirement. He's 61 and had a generous DB pension and paid retiree health insurance. The paid retiree health insurance just went away as of 1/1/18 and he and DSIL are paying $22K/year for private health insurance coverage. AFAIK, they don't qualify for subsidies.

Fortunately they've always been LBYM and should be OK- but it was a shock.

Subsidy is for workers, not retired. Some retiree's from JPM have subsidized health benefits (depending on when acquired), but JPM did away with providing retirement health benefits many years ago.

 

[brokrken]

The journalist’s Three Take Aways to consider for improving US healthcare were:
1. Universal Coverage
2. Mandatory Sign-Up
3. Standard Pricing

——————

Huston,

The issue I have with comparing like this is the scale is not the same. The combined population of those 5 countries doesn't even equal the population of the US. It's not a like for like comparison. I agree our cost per person is way too high, but that doesn't mean something that works in a country that has a fraction of our population will work.

 

[bobandsherry]

The local public hospital near me is pretty good overall, but I have to say that it is definitely a huge monument to over spending. The lobby is multi-storied with a fancy piano and all sort of elegant touches one would expect in a luxury hotel - flower displays, fancy artwork, a grand piano, etc. etc. etc. Granted, I don't want my hospital to look like the inside of a Borg cube, but I have to wonder if this is money well spent.

Yup, I'd be curious as to how much is wasted on these extravagances. Hospital administration seems to feel they need to have a shrine in their honor and are definitely not running it like a true for profit business. We all know we are all paying for it in premiums and health costs. There's a happy medium between having a sterile and luxury feel to a hospital, it is after all designed for short term stays and recuperation from procedures. People shouldn't feel like they are better off in a hospital than they are at home.

 

[aja8888]

What's needed is a breakthrough; a disruption; a new model.

Yes, maybe one without insurance companies and a focus on medical provider cost control/pricing.

 

[bobandsherry]

Examples where hospitals have gone overboard on their furnishings. Probably find some that aren't a match, but blame Google

 

[Hermit]

The local public hospital near me is pretty good overall, but I have to say that it is definitely a huge monument to over spending. The lobby is multi-storied with a fancy piano and all sort of elegant touches one would expect in a luxury hotel - flower displays, fancy artwork, a grand piano, etc. etc. etc. Granted, I don't want my hospital to look like the inside of a Borg cube, but I have to wonder if this is money well spent.

Would you choose that hospital or the one down the street that is 50 years old and has two patients to a room? When people choose the hospital they use and price is not part of the equation, they take the nicest with the latest [-]toys[/-] equipment and finest doctors. The grand new hospital is exactly what people will choose. As I noted in an earlier post this is the same thing that has happened in education where the kids are not concerned with costs because the Government has made tuition loans very easy and the kids do not think there is anything wrong with having a mountain of debt upon graduation so they pick the college with the nicest facilities and best teachers.

As an example of this in the healthcare industry, there have been many threads on this board about not using Medicare Advantage because you don't get to choose the finest doctors and finest hospitals.

I think the new hospitals are making the exactly right business decision with the grand appointments and spacious private rooms because that is what people want and those people are not footing their bill. I was one of those that had to pay over $12k/yr/person before Medicare, but that group is a very small minority. BTW, I really don't want the government choosing what medical services I get or don't get.

 

[athena53]

Subsidy is for workers, not retired. Some retiree's from JPM have subsidized health benefits (depending on when acquired), but JPM did away with providing retirement health benefits many years ago.

I meant that they aren't able to get Obamacare subsidies when buying through healthcare.gov- apparently their income is too high.

 

[MichaelB]

Yes, maybe one without insurance companies and a focus on medical provider cost control/pricing.

Yes, insurance companies are probably not going to be part of whatever ends up being implemented by this new initiative.

 

[bobandsherry]

Subsidy is for workers, not retired. Some retiree's from JPM have subsidized health benefits (depending on when acquired), but JPM did away with providing retirement health benefits many years ago.

Ah, OK, got it. They may have been able to do better with putting money aside in taxable accounts and living off that until they were old enough for Medicare and then tap into retirement funds. Many people have been tuned that 401K/IRA's are the way to comfortable retirement, which is fine if you plan to work to 65. But for early retirement having ability to tap into taxable accounts and capital gains is a different path that still allows for comfortable living and still getting the subsidies. But that's getting OT.

A/B/J is probably just the tip of the iceberg as to what the future could hold as a real disruption to health care. My wife was in the medical field, if you look at the number of acquisitions and consolidations of practices underway with medical groups, it's telling that they are preparing for a different future.

 

[Brat]

In Oregon a needs assessment and state approval is required to construct a new hospital. I do not know if additions to existing facilities are similarly subject to review. It seems to me that interior appointments is one way hospitals are competing. I wish that every hospital was required to advertise their infection control and similar effectiveness reviews. The problem with cost marketing is that there are so many components to a hospital bill.

To the best of my knowledge no needs assessment is required for expensive equipment and if not there should be.

 

[MRG]

Yes, insurance companies are probably not going to be part of whatever ends up being implemented by this new initiative.

+1

They like things the way they are.

I recall a technology guy explaining how he got a bunch of insurance companies to chip in millions for a technology solution that he couldn't deliver. I wanted no part of it, honestly it was so far fetched it should have been criminal. Twenty years later you can't get close to what he promised to deliver.

Complete boondoggle that folks with an understanding of the underlying technologies knew would fail. It did, but he or someone just like him is still out there milking a cash cow.

 

[Huston55]

The journalist’s Three Take Aways to consider for improving US healthcare were:
1. Universal Coverage
2. Mandatory Sign-Up
3. Standard Pricing

——————

Huston,

The issue I have with comparing like this is the scale is not the same. The combined population of those 5 countries doesn't even equal the population of the US. It's not a like for like comparison. I agree our cost per person is way too high, but that doesn't mean something that works in a country that has a fraction of our population will work.

I don’t understand why you think “population” differences make this analysis invalid. It seems to me there are several more relevant factors like:
1. Are they all capitalist economies
2. Are they all democracies
3. Do they provide the individual freedoms that facilitate a person’s choices (ie: healthcare), and so on...

Note that Switzerland (9M) & Taiwan (24M), which both implemented their current successful healthcare systems in the 1990s, evaluated many countries they considered similar (including the USA [325M]) and chose what they thought were the best aspects from each. This proves that we can do the same thing, population differences aside...if we so choose. BTW, the total population of these five countries is 309M, although I don’t think it’s really relevant.

 

[Pilot2013]

I will hold off complete judgement, but these guys didn't get to be mega-wealthy by accident. What I see, is some very smart guys that have identified a VERY lucrative area of the economy, that also have the financial ability to overcome the extremely high entry barriers....

 

[Freedom56]

If they are really serious about lowering the cost of healthcare, they need to address:

1- High prescription drug prices (get them in line with prices in Canada and elsewhere)

2- High provider fees (get them in line with the rest of the developed world)

3- Fighting the obesity epidemic (get people into a more healthy lifestyle)

The insurance companies are just passing the high costs to the consumer and employers.

 

[6miths]

That is not all the insurance companies are doing.

 

[brokrken]

I don’t understand why you think “population” differences make this analysis invalid. It seems to me there are several more relevant factors like:

1. Are they all capitalist economies

2. Are they all democracies

3. Do they provide the individual freedoms that facilitate a person’s choices (ie: healthcare), and so on...



Note that Switzerland (9M) & Taiwan (24M), which both implemented their current successful healthcare systems in the 1990s, evaluated many countries they considered similar (including the USA [325M]) and chose what they thought were the best aspects from each. This proves that we can do the same thing, population differences aside...if we so choose. BTW, the total population of these five countries is 309M, although I don’t think it’s really relevant.

Population absolutely matters. What works for a country of 25 million might not be scalable to a country of 325 million. It's the same reason a successful plant trial sometimes doesn't work in full scale production.

 

[USGrant1962]

Population absolutely matters. What works for a country of 25 million might not be scalable to a country of 325 million. It's the same reason a successful plant trial sometimes doesn't work in full scale production.

Agree. Health care in NJ, NY, or CA is never going to cost the same as most of the country. So the "standard pricing" concept is nonsense for a country the size of U.S.A. And I don't know about the others but I do know that the UK is into health care rationing, which is a non-starter in the U.S.

 

[Brat]

I wonder if the consortium would offer a basic plan along the lines of CN, England, maybe Denmark or Norway, for free and and two levels of upgrade at a premium.

I once met a Kaiser med buyer who told me they buy drugs by the pallet. If I were that consortium I would buy a generic drug manufacturer and build on that manufacturer's product line.

The consortium likely won't have the elderly as their insured as they will likely be retired and covered by Medicare A & B. That said, perhaps insured with likely terminal illnesses be required to obtain a second opinion before embarking on treatment not likely to significantly prolong the quality of their life. Hidden behind this thought is that I wonder if some treatments are for the benefit of the health care providers or the patient.

FWIW I wouldn't call Kaiser insurance cheap.

 

[USGrant1962]

I wonder if the consortium would offer a basic plan along the lines of CN, England, maybe Denmark or Norway, for free and and two levels of upgrade at a premium.

I believe "basic plans" are not allowed under ACA. I wish they were. Remember when health insurance was called Major Medical?

 

[athena53]

I believe "basic plans" are not allowed under ACA. I wish they were. Remember when health insurance was called Major Medical?

"Basic" as in "lacking some required provisions" is not permitted. Perfectly legal, however, to offer more expensive plans with higher reimbursement rates to physicians or a better network.

in the UK, at least 10 years ago (not sure now) companies would buy supplemental health insurance for their executives. My London-based boss told me his son had some kind of issue they wanted checked out and when his wife called the doctor they couldn't get him in for a week, When she mentioned the plan they had, same-day appointments were suddenly available.

 

[MichaelB]

Part of the announcement highlighted technology.

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

This is interesting, and possibly one source of disruption. That is, the ability to deliver high quality health care at a much lower price.

Technology in health care has been applied much differently than other industries. It is much more proprietary and directed toward generating revenue for the patent-holder, rather than focused on efficiency and business growth, as seen in other industries. In other words, over a long period it does not enable the provider to provide more service at the same (or lower) cost, but it does enable the provider to generate more revenue, even when there is no compelling evidence of better health outcomes.

The use of knowledge based systems in medicine has great potential, but is critically limited by state regulatory systems designed to preserve and reinforce the traditional role of physician and pharmacist. If this venture can find a way to get around that, the potential is compelling.