I'm neutral on the particulars of this venture (it's probably positive). But how can anyone argue that the market is efficient when it is possible for companies that "is free from profit-making incentives" to exist? Just curious. How does this example fit into that framework?
Amazon, Berkshire, JPMorgan to Create Healthcare Company
21–30 of 540 posts
Re: Amazon, Berkshire, JPMorgan to Create Healthcare Company
#22> The three companies said they plan to set up a new independent company "that is free from profit-making incentives and constraints." I wonder if they will be setting it up as a health insurance cooperative, an organizational structure in which the primary goal is to serve its members, rather than to generate value for external shareholders: https://en.wikipedia.org/wiki/Health_insurance_cooperative It's not at all…
One of the benefits a profit motive brings to insurance companies is pushing back on improper billing by providers (doctors/hospitals) and negotiating lowest possible care and drug rates. Tech-focused insurers like Oscar also invest heavily to help guide members toward better care paths, which if done well lead to better care at less expense (for both the member and insurer). Unrelated: one of the worst parts of insu…
A non-profit ensurer staffs itself to have high quality customer service by pushing back on improper billing by providers and instead of returning that savings to its members investing it into higher quality employees, more training, and better systems to ensure that hospitality is a paramount concern.
Re: Amazon, Berkshire, JPMorgan to Create Healthcare Company
#23Earlier quoted context omitted.
One of the benefits a profit motive brings to insurance companies is pushing back on improper billing by providers (doctors/hospitals) and negotiating lowest possible care and drug rates. Tech-focused insurers like Oscar also invest heavily to help guide members toward better care paths, which if done well lead to better care at less expense (for both the member and insurer). Unrelated: one of the worst parts of insu…
You're correct that a profit motive leads for-profit health insurance companies to push back on improper billing and negotiate prices, because whatever profit they are able to eek out goes to its shareholders. But the same motive applies to co-ops. The member-owners of a co-op don't want their costs to be inflated by improper billing or inflated prices, because if they are able to reduce their expenses, then the memb…
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Re: Amazon, Berkshire, JPMorgan to Create Healthcare Company
#24Earlier quoted context omitted.
Blue Cross Blue Shield is a 501(c)(4) nonprofit. Doesn’t seem to help.
Some regional BCBS are nonprofit; Anthem BCBS isn't. Even so, your main point is taken. There's a broad directorship problem with many non-profits, higher eduction, and mutuals. General users of these public services either have no say -or- have no reasonable way to exercise their limited authority. For example, State Farm Mutual permits its subscribers to show up in person on a particular day once per year in order…
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Re: Amazon, Berkshire, JPMorgan to Create Healthcare Company
#25I'm neutral on the particulars of this venture (it's probably positive). But how can anyone argue that the market is efficient when it is possible for companies that "is free from profit-making incentives" to exist? Just curious. How does this example fit into that framework?
There is plenty of profit to be made... lower insurance premiums result in higher profits for Amazon, JP Morgan and BH
Re: Amazon, Berkshire, JPMorgan to Create Healthcare Company
#26> The three companies said they plan to set up a new independent company "that is free from profit-making incentives and constraints." I wonder if they will be setting it up as a health insurance cooperative, an organizational structure in which the primary goal is to serve its members, rather than to generate value for external shareholders: https://en.wikipedia.org/wiki/Health_insurance_cooperative It's not at all…
One of the benefits a profit motive brings to insurance companies is pushing back on improper billing by providers (doctors/hospitals) and negotiating lowest possible care and drug rates. Tech-focused insurers like Oscar also invest heavily to help guide members toward better care paths, which if done well lead to better care at less expense (for both the member and insurer). Unrelated: one of the worst parts of insu…
> One of the benefits a profit motive brings to insurance companies is pushing back on improper billing by providers (doctors/hospitals) and negotiating lowest possible care and drug rates.
The ACA requires insurers to spend 80% of the premiums they take in on direct healthcare costs for their members. Inflated billing and high drug costs are actually helpful if they want to make a nice big profit. To a point, at least - they've gotta find the right balance between profit and people being unable to pay their premiums.
Re: Amazon, Berkshire, JPMorgan to Create Healthcare Company
#27I've always wondered what's stopping someone from creating a non-profit and just having people join it in order to give the non-profit ability to negotiate lower prices. I imagine there's a cost to set this up, but is that cost less than the marginal cost of each employee and the savings they would (presumably) receive if enough people joined?
Kaiser Foundation Health Plans & the Kaiser hospitals are non-profits.
Re: Amazon, Berkshire, JPMorgan to Create Healthcare Company
#28I've always wondered what's stopping someone from creating a non-profit and just having people join it in order to give the non-profit ability to negotiate lower prices. I imagine there's a cost to set this up, but is that cost less than the marginal cost of each employee and the savings they would (presumably) receive if enough people joined?
The US healthcare system worked for the majority of people until roughly the last 15 years, and then it began failing gradually up the income ladder. So if you look more recently, the last ten years in particular, that would be the window where something like this would especially begin to matter. It wasn't done before, because it didn't make sense for large entities to bother; things have gotten bad enough that now…
> Today it's closer to $18,000.
Do you happen to know the sources of inflation? Are we consuming a lot more services? Are healthcare providers being paid more? Are healthcare companies getting rich?
Re: Amazon, Berkshire, JPMorgan to Create Healthcare Company
#29Earlier quoted context omitted.
One of the benefits a profit motive brings to insurance companies is pushing back on improper billing by providers (doctors/hospitals) and negotiating lowest possible care and drug rates. Tech-focused insurers like Oscar also invest heavily to help guide members toward better care paths, which if done well lead to better care at less expense (for both the member and insurer). Unrelated: one of the worst parts of insu…
You're correct that a profit motive leads for-profit health insurance companies to push back on improper billing and negotiate prices, because whatever profit they are able to eek out goes to its shareholders. But the same motive applies to co-ops. The member-owners of a co-op don't want their costs to be inflated by improper billing or inflated prices, because if they are able to reduce their expenses, then the memb…
For companies like Amazon, JP Morgan, Berkshire, it's blatantly clear they have a massive financial incentive to beat down the run-away cost of healthcare. They've got a million employees all up and down the economic tiers. It's a very big boon to their business, to have a smaller share of cost going into healthcare, where they can instead redirect that money into eg competing for labor with higher wages (especially relevant with the U3 at 4.1%).
Healthcare costs are so bad they're now a large, direct competitor to the Amazons and Berkshires and JP Morgans in a business well-being sense, as resources are finite. I like having these giants stepping up to the plate and targeting the healthcare system on cost. They tend to get their way; if a political rock (eg insurance companies) gets in the way, it'll get moved out of the way.
It reminds me of the 450 hospitals getting together to set up a not-for-profit generic drug company recently -
https://www.cnbc.com/2018/01/18/hospitals-plan-to-create-the...
Re: Amazon, Berkshire, JPMorgan to Create Healthcare Company
#30> they plan to collaborate on a way to offer health-care services to their U.S. employees. Is it clear that they will be offering these services to outside clients? Or is this just a way to keep down Healthcare costs across their organizations?
I don’t know. But a quick Google search indicates that these 3 companies have over 1 million employees. But that’s world wide. Still that’s an impressive number.