A Private VA?
With 1,243 healthcare facilities, The Veterans Administration operates the largest hospital system in the United States. The system is a fully integrated healthcare system—meaning that it does not rely on a health insurance middle man. No patient is asked for an insurance card.
Reading between the lines of the press announcement, it sounds as though this partnership of three of this country’s most influential companies could potentially result in a similarly integrated healthcare system serving 1 million employees—also no insurance required.
“It could be big,” Ed Kaplan, who negotiates health coverage on behalf of large employers as the national health practice leader for the Segal Group, said of the announcement.
Mr. Kaplan said larger insurers were frustratingly inefficient when it came to fixing problems like people visiting the emergency room when they did not need to, or requiring a doctor’s visit for routine tasks like refilling a prescription.
“The health care system is complex, and we enter into this challenge open-eyed about the degree of difficulty,” Jeff Bezos, Amazon’s founder and chief executive, said in a statement. “Hard as it might be reducing health care’s burden on the economy while improving outcomes for employees and their families would be worth the effort. Success is going to require talented experts, a beginner’s mind, and a long-term orientation.”
“The ballooning costs of health care act as a hungry tapeworm on the American economy,” Mr. Buffett said in the statement. “Our group does not come to this problem with answers. But we also do not accept it as inevitable. 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.”
Investors sold health insurer stocks on the day of the Amazon/Buffet and JPM announcement.
What’s in it for Orthopedics?
Orthopedics is the largest healthcare sector in terms of procedures and patients requiring treatment. Eliminating the health insurer middle man could mean fewer pre-authorizations, irrational insurer decisions, and significant paperwork reduction and, perhaps, a greater openness to new technologies.
It is also noteworthy that Amazon, an information and logistics company, could disintermediate healthcare system in much the same way it cut out various middle men between suppliers and consumers in the retail goods sector.
It also worth remembering that both retail and healthcare are, essentially, consumer industries.
