Author Topic: BRK/JPM/AMZN healthcare tie up  (Read 12618 times)

Cigarbutt

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Re: BRK/JPM/AMZN healthcare tie up
« Reply #50 on: October 30, 2018, 03:05:50 PM »
Not sure where to link this, but Warren did an event sponsored by newly acquired MLMIC, New York's largest medical malpractice insurer - where he had a public conversation with Dr. James Reed, CEO of St. Peter's Health Partners.  (if you've reached your 'free limit' for reading the article, open the link in private or incognito mode to read)

https://www.bizjournals.com/albany/news/2018/10/18/warren-buffett-health-care-st-peters-reed.html
Thank you for the link which I just reviewed.
Also led me to the following conversation:
https://www.mlmic.com/blog/physicians/warren-buffett-on-protecting-physicians

On the expectations about the joint venture (It feels like Columbus looking for a continent... and we don't really know where we're going...expect failures) I find that it's the good 'ole way to manage expectations. It feels the same when one reads the early partnership letters concerning investment return expectations...

Atul Gawande also shares this capacity to hide the drive behind humility. But it's there.

Also interesting because, during the interview, Mr. Buffett clearly said that the cash cushion at BH was still 20B. Something I had not heard for some time and expected to be higher as insurance operations have grown somewhat in the last few years.


Gamecock-YT

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Re: BRK/JPM/AMZN healthcare tie up
« Reply #51 on: November 06, 2018, 04:42:53 PM »

John Hjorth

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Re: BRK/JPM/AMZN healthcare tie up
« Reply #52 on: November 06, 2018, 08:47:44 PM »
Posted by dcollon a few days ago in the "Buffett/Berkshire - general news" topic :

Discussion about Health Care and Malpractice

https://www.valuewalk.com/2018/11/malpractice-insurance-warren-buffett/
”In the race of excellence … there is no finish line.”
-HH Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai

DooDiligence

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Re: BRK/JPM/AMZN healthcare tie up
« Reply #53 on: November 07, 2018, 04:10:38 AM »
Posted by dcollon a few days ago in the "Buffett/Berkshire - general news" topic :

Discussion about Health Care and Malpractice

https://www.valuewalk.com/2018/11/malpractice-insurance-warren-buffett/

What a great resource to identify physicians that they do & DON'T want in the BRK/JPM/AZN system.
Are they only operating in NY?

Seems like insurance, in general, is a great business to own, for identifying risky businesses to avoid.
Healthcare 40.8% - ABC BBH CVS DVA EW NVO // BRK.B - 14.7% // Media & Communication 12.7% - CHTR CMCSA DIS

Drinkers & Smokers 13.5% - ABEV MO // Auto's & Oil 13.8% - CLB GPC VDE // Tech & Comms 4.4% - AAPL SFTBY

%'s held @ MV 11/23/2018 minus $$$ 4 skool

ready 2 wait

https://twitter.com/tunawish

Cigarbutt

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Re: BRK/JPM/AMZN healthcare tie up
« Reply #54 on: November 07, 2018, 05:44:34 AM »
Posted by dcollon a few days ago in the "Buffett/Berkshire - general news" topic :

Discussion about Health Care and Malpractice

https://www.valuewalk.com/2018/11/malpractice-insurance-warren-buffett/

What a great resource to identify physicians that they do & DON'T want in the BRK/JPM/AZN system.
Are they only operating in NY?

Seems like insurance, in general, is a great business to own, for identifying risky businesses to avoid.
Even if the emphasis was on the positives and the synergies, the point you make is interesting because the stick component may be just as important as the carrot (in the UK, there is a car insurer named Carrot Insurance that rewards "good" drivers).

-comment on the presence in NY State
New York State appears to be the largest market for malpractice insurance in the US.
https://www.diederichhealthcare.com/the-standard/2018-medical-malpractice-payout-analysis/
MLMIC is AFAIK only writing business in the NY State and, in 2008, had 40% market share (in 2017, 26% and MedPro, another BRK sub, 10%). The MLMIC transaction is a classic Buffett one because the NY market has been challenged by new players, including some risk rentention groups, that have clearly shown less than ideal discipline. In this market, the typical delay for payout is about 7 years which may give an unusually long and apparent period of growth and profitability before hitting the wall (see Oceanus Insurance recent liquidating experience that happens with surplus depletion and the tide going out). When looking at the incredibly instructive cycle of reserve releases in this specific market, it seems that shit is about to hit the fan and, as usual, BRK businesses will be there to pick up the pieces and continue to build the masterpiece.

-comment on the opportunity to share knowledge with the venture
Healthcare liability insurers want to keep premiums low and the incentives behind that aim correlates well with an improved quality of care to cost ratio. They have built a huge database and tools that help to identify "deviant" outcomes. In the positive sense, they can identify groups or areas that have somehow put together a format of care giving superior results. They can also spot relative negative outcomes and are ideally placed to define strategies to improve results (constructive feedback, education but also other "unpleasant" measures).

Just in case you have time, here's an example of "cooperation" between the liability insurer and the clinical world:
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2725304/

Take-home message: companies like MLMIC can identify areas of unusual costs, can help define the costs and their causes and can help define a cost effective way to improve the quality to cost ratio. Sponges left inside a cavity is an extremely rare event (about 0,01%) but when it's you, it's a 100%. This study and others have shown that there are simple and cost-effective strategies (including a systematic method and a checklist) that can reduce the risk of "forgotten" items in human cavities. With this mindset, imagine the potential for people going to the emergency room with a heart attack or even for more mundane conditions as people going to primary care for eye styes.
« Last Edit: November 07, 2018, 06:29:11 AM by Cigarbutt »

Cigarbutt

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Re: BRK/JPM/AMZN healthcare tie up
« Reply #55 on: November 20, 2018, 08:43:03 PM »
The project is taking form with one more addition.
https://www.healthcareitnews.com/news/amazon-berkshire-jpmorgan-venture-hires-bcbs-it-exec-dana-safran-data-driven-position
https://aboutus.bluecrossma.com/affordability-quality/alternative-quality-contract-aqc
https://nam.edu/wp-content/uploads/2018/07/5.3-Safran.pdf

Her title could have been chief of incentives alignment and she could be seen as capitation with a smile.
Her task will be to try to tackle the price/value proposition.