What Amazon can’t do

February 13, 2018
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Now that Amazon and its partners JP Morgan Chase and Berkshire Hathaway have decided to tackle healthcare for their employees, everyone  is tossing out ideas for what they might do to solve the system’s myriad problems.  I count myself among those lobbing in suggestions, with my emphasis on making the system more patient-oriented.

Two letter writers in the Wall Street Journal have interesting ideas about what the partnership should do, but ultimately they are misguided.

Fred Hyde, MD, JD, MBA thinks the team should take advantage of association health plan (AHP) rules to beat up providers over pricing, pointing the finger at “monopoly pricing by larger health systems” and prescribing reference pricing or a Dutch auction for the procurement of hospital care. He points to ERISA as a great liberator for larger companies and thinks  AHPs could be the answer for smaller businesses.

Well, all three partners already can take advantage of ERISA and that hasn’t really helped them. There’s also no particular reason to think providers are going to give the companies lower prices just for the heck of it.

Robert E. Mittelstaedt Jr., Emeritus Dean from Arizona State University, thinks full price transparency is going to be the answer, “forcing patients to make economic decisions” and pushing government to allow providers to compete on price. In my experience providers don’t want to compete on price and sick patients and their families are not well positioned to shop for most healthcare, especially the expensive and emergency stuff like cancer treatment and trauma care.

The writer says the partnership is “no different” than the history of Kaiser Permanente. In that case why not have all employees join Kaiser? After all there is already Kaiser Permanente Washington, based near Amazon’s headquarters, the former Group Health Cooperative. These plans are no panacea.

I’ve heard people quip that the best thing this group of companies could do for their employees is advocate for a single payer system in the US. I think they can do better than that, but it’s actually a better idea than a lot of what’s being discussed.


By healthcare business consultant David E. Williams, president of Health Business Group.

2 thoughts on “What Amazon can’t do”

  1. I just read an article on “Step Therapy” as part of Obamacare regulations that you support. That is totally opposite of being a “patient-oriented’ system that you say you support here. I’m very angry and frustrated over this step therapy regulation as it’s hindered my ability to keep my daughter on T1D medication that ACTUALLY works for her…regardless of the cost, as there is very little difference in the cost. If we want to be TRULY “patient-oriented (which also means “Doctor” oriented, NOT insurance company oriented, as they are the ones who helped draft Obamacare!), then we NEED to get rid of Step Therapy, and ALL OBAMACARE regulations altogether. It seems only $0 copay patients on Medicaid are getting the best of care now. I know. I know some of them! And THAT’s the reason I’ve not had a decent raise in the last few years…Obamacare!

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