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Analysis

Can Amazon and Its Partners Solve Healthcare’s ‘Tapeworm’ Effect?

By Philip Betbeze  
   January 30, 2018

Most of the efforts I referenced above start with grand goals that ultimately devolve into programs that, while successful in a narrow, company-focused way, just nibble at the margins of a still-disjointed healthcare system that remains difficult for patients to navigate and judge value.

In covering healthcare services for nearly 18 years, I have witnessed a complex industry with many well-meaning leaders gradually coming to terms with the following:

  • Healthcare is technologically backward compared to other industries
  • It’s opaque
  • It has more than its share of fraud and abuse
  • It costs too much

The industry has also come, rightly or wrongly, to the following conclusions:

  • The propensity of individuals to consume healthcare services is nearly infinitely elastic
  • Government intervention has not worked
  • Value-based reimbursement is still spotty
  • These issues are beyond any one organization to solve

To use a healthcare-themed analogy, ever since Amazon managed to put traditional retail on life support, pundits have wondered when it might take on its biggest potential challenge—solving healthcare’s cost and quality conundrum. That the effort includes partners in a nonprofit company has to come as something of a surprise, and perhaps that makes it less scary to healthcare leaders.

However, no one should doubt its resolve, and starting with allies like JPMorgan Chase and Berkshire Hathaway’s variety of companies adds even more heft to the effort.

But here’s what healthcare leaders already know: This one effort will have as tough a time as any predecessor in changing the algorithm that makes fixing healthcare’s problems with cost and quality so diabolical. Buffett acknowledges as much.

“Our group does not come to this problem with answers. But we also do not accept it as inevitable,” he says in the release. “Rather, we share the belief that putting our collective resources behind the country’s best talent can, in time, check the rise in health costs while concurrently enhancing patient satisfaction and outcomes.”

We’re all patients at one point or another, and we all pay for healthcare too. So for that reason alone, we should all hope the effort succeeds. 

Philip Betbeze is the senior leadership editor at HealthLeaders.


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