Healthcare has been screaming for a disruptor. Someone heard. The announcement that Amazon is joining with market-savvy Berkshire Hathaway and JPMorgan Chase to create an insurance joint venture that will initially cover the domestic employees of these three entities was thin on details. However, the goals presented, that they would use data and bargaining power to bring transparency into the system to lower costs and improve outcomes, are certainly the key to improving the healthcare experience.

Rumors have been swirling for a while that Amazon, the market status-quo killer, was setting its sights on healthcare — one of the least transparent and most inefficient markets — which accounts for almost 20% of U.S. GDP. I am intrigued by the assertion that the venture would remove profits from the system, as all three entities have a long-term profits focus. No doubt that they mean to squeeze excess profits and areas where little value is added.

Bloomberg

Areas of improvement
There is a lot of low-hanging fruit that would achieve these objectives. Here are four examples:

1) Improve drug price transparency
2) Focus on the healthcare gateway to ensure that efficient care is delivered
3) Incentivize healthy behavior and disincentivize inattention to health status
4) Expand electronic medical records

Also see:Amazon, Berkshire, JPMorgan to target healthcare ‘tapeworm.’”

I believe a lot can be learned from the healthcare startup Oscar, that had similar objectives but went astray by focusing on the individual public exchange and small-group markets, which are too influenced by the legislative process.

As self-insured employers, Amazon, Berkshire Hathaway and JPMorgan can avoid many of Oscar’s missteps.

Judging by the stock market’s reaction, the announcement has resonated on Wall Street. This will take a while, but they are on the right track.

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