Corporate Coalition Could Finally Kill Crumbling Healthcare
When it acquired Whole Foods (and, significantly, the company’s pharmaceutical licence), Amazon’s advances into healthcare became more than speculation. In another provocative move, the ecommerce leader is in the process of forming its very own healthcare company. This time, however, it isn’t acting alone. Alongside Berkshire Hathaway, the holding company led by billionaire investor Warren E. Buffett, and JP Morgan, the US’s largest bank by assets, Amazon wants to improve the personal health of its employees. In future, the initiative could help to overcome the track of healthcare hurdles that have long been on the minds of major companies.
Feeding ‘the hungry tapeworm’
There can be no doubt that the global healthcare industry is changing. Medical facilities and procedures have benefited massively from the introduction of innovative and disruptive technology, and this has appeared to have impacted policy too. The Affordable Care Act, more commonly referred to as Obamacare, is predicted to expand over the coming year after President Trump’s failure to repeal it. However, according to a survey carried out by the Kaiser Family Foundation, 73 per cent of US citizens report cutting back on basic household necessities to afford their medical bills. The cost of treatments and medicines is increasing, but wages are not. When the three companies announced the creation of an independent healthcare company, the stocks of insurers and major health companies plummeted. What this will actually entail, though, is anyone’s guess. The companies have stated that the company will be accessible to their employees and, in Buffet’s words, tackle ‘the hungry tapeworm’ – his metaphor for the existing system. JP Morgan’s Jamie Dimon has teased that it could come to benefit all Americans. While there is a strong emphasis on fixing the US healthcare sector, America’s sneezes often lead to a global cold. How will healthcare change in the face of this new challenge?
How will big business initiatives disrupt healthcare?
The entrance of powerful companies into the healthcare sector has clearly sent a shiver down the spines of industry incumbents. As new players enter the scene, the existing infrastructure will have to evolve to accommodate them. For the most part, these startups want to complement the system rather than overhaul it. Amazon, Berkshire Hathaway and JP Morgan have expressed much the same view. Even so, this doesn’t take away the potential for new healthcare initiatives to undercut insurers. National health services like the UK’s tumultuous NHS could be in danger of losing out on resources and personnel as new options gain popularity. On the one hand, any healthcare service provided by Amazon’s coalition may well be an improvement on the failing system already in place. Amazon has vast expertise in logistics, deliveries and demand, and both Berkshire Hathaway and JP Morgan have exhaustive resources and contacts. They also have a huge number of employees on which to test out their ideas. But on the other hand, it’s worth questioning the ballooning influence of big corporations. They want to collect as much personal information about consumers as possible. This is all well and good when it leads to better products and services, and is stored securely. Taking care of vast swathes of data is notoriously difficult, and could be seen as an intrusive into people’s lives. Data debates aside, the enthusiasm of the coalition could represent yet another example of private sector developments driving public sector growth. It’s not just business that traditional providers have to watch out for either. In the US, some states are now bringing in their own health insurance mandates.
Healthcare has been ripe for disruption, and a surge of companies have answered the call. But when it comes down to the hard cost of medical services, not a lot seems to has changed for struggling consumers. Using innovative technology to tackle the incumbent issues of the healthcare industry has certainly made an impact, but perhaps the attention of major corporations is the next stage in the process of enacting lasting change. Admittedly, other big firms like Walmart and Caterpillar have had little luck so far. There’s clearly a level of scepticism about how much power Amazon, Berkshire Hathaway and JP Morgan really have to revolutionise healthcare provision. That being said, underestimating Amazon would be a fool’s move – and that’s without the clout of two giant asset firms behind them.
What has prevented the healthcare industry from achieving tangible change? Could big corporations hold the answers to these problems? Will other major companies look to join the coalition? Share your thoughts and experiences.