Author Topic: BRK/JPM/AMZN healthcare tie up  (Read 17514 times)

Jurgis

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Re: BRK/JPM/AMZN healthcare tie up
« Reply #30 on: February 14, 2018, 04:36:39 PM »
I thought other tech companies also self-insure on the money basis, but still contract with healthcare companies (United/Aetna/Cigna/etc.) for actual handling/benefits/accounting/etc. So that would be no different from Amazon and would have the same two points.

Amazon/JPM/Berkshire project IMO is interesting only if it does more than above: does not contract with healthcare companies for service?

But perhaps tech self-insure is something that comes and goes. I can't quote how many companies do this year to year.
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Cigarbutt

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Re: BRK/JPM/AMZN healthcare tie up
« Reply #31 on: February 15, 2018, 04:59:19 AM »
Good points.

Employee turnover appears to be high at Amazon but I'm not sure about the age profile.
Amazon is apparently even encouraging workers to quit with a 5000$ "offer".
https://www.theatlantic.com/business/archive/2018/02/amazon-offer-pay-quit/553202/?utm_source=feed
"Officially called ďThe Offer,Ē this proposition is, according to Amazon, a way to encourage unhappy employees to move on."
The jobs are physically demanding and many stay on the job for the health insurance coverage.

Concerning self-insured firms and the captive market, a practical experience (read from the scientific journal USA Today):
"As the founder and CEO of a mid-sized company that employs 180 people in the United States, I know this well. In 2018, we will pay $2.8 million to insure our workers and their families. Year after year, we have wrestled with the costs of our health care plans. And despite trying every trick in the book, our per-employee costs have tripled over the past 14 years. A family plan in 2018 will cost us $27,000, which is higher than the annual salary of one-third of all working Americans. To put it another way, we are paying $13.50 per hour per employee just to cover the health care benefit. Itís a model thatís completely unsustainable, and needs to change."

Employers, self-insured or not, (and the government) want to pay less.
Patients are not satisfied with the value proposition.
Providers are looking for more efficient processes and technology.
Insurers (who now connect all these actors) don't see ingredients for meaningful change.

Still early in the game and a lot of resistance expected but a potential for change.
Example:
https://www.apple.com/newsroom/2018/01/apple-announces-effortless-solution-bringing-health-records-to-iPhone/
« Last Edit: February 15, 2018, 05:07:46 AM by Cigarbutt »

Cigarbutt

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Re: BRK/JPM/AMZN healthcare tie up
« Reply #32 on: February 27, 2018, 01:35:57 PM »

DeepSouth

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Re: BRK/JPM/AMZN healthcare tie up
« Reply #33 on: February 28, 2018, 02:05:34 PM »
I was at a startup conference last week and the head of a new healthcare insurer was commenting on the announcement.  Take the source for what you will....but he raised a couple of good points.

He first questioned whether this would actually turn into anything meaningful.  Apparently the average Amazon employee stays there less than 2 years.  As the market shifts from fee-for-service to value-based-care that makes it a very difficult population to structure and price for long term coverage given you have 50% turnover in the underlying every year.  Also tough to apply pre-emptive health services that many insurers are focusing on.

The other point was that this is hugely beneficial for Amazon but he thought probably negative for everyone else.  The vast majority of Amazon's employees are under 40 years old.  This is the most desirable target group for insurers because they use very little healthcare and end us subsidizing the chronic care and older patients that account for over 80% of healthcare costs.  By pulling it's "cheap to insure" population out of the broader insurance environment and self insuring, Amazon is both saving cost for itself and increasing cost for the rest of the insured population. 

I have to assume JPM and Berkshire employee bases have much broader age ranges and less turnover but it was an interesting observation.

Amazon is not paying a blended average American rate for their employees. They are paying for insurance based on the risk of their employee pool.

Cigarbutt

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Re: BRK/JPM/AMZN healthcare tie up
« Reply #34 on: March 01, 2018, 06:51:22 AM »
For those who wonder if less is more in healthcare:
http://www.nejm.org/doi/full/10.1056/NEJMms1713248#t=article
https://www.medscape.com/viewarticle/891091?src=WNL_infoc_180301_MSCPEDIT_ONC&uac=15207AZ&impID=1569981&faf=1

Relevant because the outcome of this debate will impact some players more than others.

The two articles are written by respected authors who, despite conflicting views, elevate the debate and help to find the way.
Perhaps not inappropriate in an era where people have never been more inundated by data (of unequal quality) often leading to the triumph of ignorance.
Need humble guiding lights in order to "see" the data-driven answers and filter out the hype-driven and purely profit-driven promises.
At the risk of raising the ire of zealots, I'll disclose that I subscribe to a sensible less is more approach but remain open to other ideas as there are no perfect answers in this difficult "market".

For those interested, an important contributor to the the field is Atul Gawande who got praise from Mr. Charlie Munger after "The Cost Conundrum" article.

Dynamic

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Re: BRK/JPM/AMZN healthcare tie up
« Reply #35 on: June 21, 2018, 04:57:08 AM »
https://www.businesswire.com/news/home/20180620005747/en/Amazon-Berkshire-Hathaway-JPMorgan-Chase-appoint-Dr.

Amazon, Berkshire Hathaway and JPMorgan Chase appoint Dr. Atul Gawande as Chief Executive Officer of their newly-formed company to address U.S. employee healthcare

The new company to operate independently and be based in Boston

If you're interested he has 2012 TED talk and presented the 2014 Reith Lectures on BBC Radio 4, both of which seem to revolve around fixing healthcare systems, and both of which should still be available to listen to.
« Last Edit: June 21, 2018, 05:14:07 AM by Dynamic »

CorpRaider

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Re: BRK/JPM/AMZN healthcare tie up
« Reply #36 on: June 21, 2018, 05:57:00 AM »
For any who haven't read his books, especially the Checklist Manifesto, get on it.  What an incredible polymath!
« Last Edit: June 21, 2018, 06:21:55 AM by CorpRaider »

Dynamic

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Re: BRK/JPM/AMZN healthcare tie up
« Reply #37 on: June 21, 2018, 05:58:39 AM »
I remember that from his Reith lecture and various other podcasts from a few years ago. Amazingly smart idea.

sleepydragon

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Re: BRK/JPM/AMZN healthcare tie up
« Reply #38 on: June 21, 2018, 06:45:39 AM »

wow, I wonder if Buffett or Bezo was reading this

For those who wonder if less is more in healthcare:
http://www.nejm.org/doi/full/10.1056/NEJMms1713248#t=article
https://www.medscape.com/viewarticle/891091?src=WNL_infoc_180301_MSCPEDIT_ONC&uac=15207AZ&impID=1569981&faf=1

Relevant because the outcome of this debate will impact some players more than others.

The two articles are written by respected authors who, despite conflicting views, elevate the debate and help to find the way.
Perhaps not inappropriate in an era where people have never been more inundated by data (of unequal quality) often leading to the triumph of ignorance.
Need humble guiding lights in order to "see" the data-driven answers and filter out the hype-driven and purely profit-driven promises.
At the risk of raising the ire of zealots, I'll disclose that I subscribe to a sensible less is more approach but remain open to other ideas as there are no perfect answers in this difficult "market".

For those interested, an important contributor to the the field is Atul Gawande who got praise from Mr. Charlie Munger after "The Cost Conundrum" article.

DTEJD1997

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Re: BRK/JPM/AMZN healthcare tie up
« Reply #39 on: June 21, 2018, 06:46:46 AM »
Good points.

Concerning self-insured firms and the captive market, a practical experience (read from the scientific journal USA Today):
"As the founder and CEO of a mid-sized company that employs 180 people in the United States, I know this well. In 2018, we will pay $2.8 million to insure our workers and their families. Year after year, we have wrestled with the costs of our health care plans. And despite trying every trick in the book, our per-employee costs have tripled over the past 14 years. A family plan in 2018 will cost us $27,000, which is higher than the annual salary of one-third of all working Americans. To put it another way, we are paying $13.50 per hour per employee just to cover the health care benefit. Itís a model thatís completely unsustainable, and needs to change."

A family insurance plan costs $27k per year? 

That could almost be the wage for an employee per year!  When I was working as an attorney a couple years ago, the pay rate was $21/hour.  Something has gotten seriously, seriously out of whack.  A lot of people in America (not just fast food workers & clerks) just simply can't afford to pay that...not even close.