Warren Buffett, Jeff Bezos and Jamie Dimon Team Up Big on Healthcare
Healthcare disruption may demand more MDs with MBAs
Rising costs for healthcare are prompting more and more companies to make employee wellness a priority—and a core business.
Amazon, Berkshire Hathaway and JPMorgan Chase have designs to occupy and develop the space. In late January, this triad announced plans to enter the healthcare market for their employees. The following day, healthcare stocks dropped. The valuation of Express Script, CVS Health, Walgreens Boot Alliance, United Health Group, Cigna and Anthem fell by more than $30 billion.
Physicians operating in this space will need to understand business operations.
The “Amazon effect” gave investors pause. Could outside entrants into healthcare deliver better outcomes than established healthcare companies? Can these three companies disrupt the way health insurance benefits are delivered to employees and help manage the costs? Because these companies are self-insured, will they be able to circumvent the middle, on both the payer and pharmaceutical sides?
Health insurance accounts for approximately 8 to 11 percent of employer compensation. Additionally, employee absenteeism and presenteeism cost the U.S. economy an estimated $344 billion per year. Much of the costs are related to chronic conditions, such as obesity, diabetes, pain and depression. This regressive return on investment has prompted employers to consider different strategies regarding employee health. Recently, Apple launched Wellness AC, a group of healthcare clinics, to meet the healthcare needs of its employees.
Providing care for employees for much of their primary concerns may end up saving employers money, adding to their bottom line.
It may necessitate a new medical specialty—where the combined MD-MBA is essential.
Companies now view employee health as an integral component of their core business, and essential to recruit and retain talent. Using outside vendors does not meet their needs. Rather than outsourcing this key factor of operations, businesses are designing in-house solutions. They recognize that traditional healthcare providers have no insight into the workflow of their patients.
Traditional healthcare is administered in chunks of 15 to 20 minutes every 3 to 12 months. In-house systems can evaluate ergonomics, movement patterns and influence meal choices on a daily basis. At the workplace, individual care can be augmented with group therapy. Time will be saved by reducing or eliminating travel to outside providers.
Can these three companies disrupt the way health insurance benefits are delivered?
Physicians operating in this space will need to understand business operations and how team dynamics affect health. They will have to expand their expertise from patient education to health messaging. These skills are not taught in medical schools or residencies.
Employer-based healthcare services may necessitate the recognition of a new medical specialty—where the combined MD-MBA credential is essential.
It will be interesting to see what the future holds for healthcare in the U.S.