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Healthcare Cost

The State of the Union topics about tax reform, jobs, immigration, and infrastructure are all important, but what about healthcare? Healthcare represents nearly 20% of our economy, people are going bankrupt or dying because of the cost of drugs, basic healthcare is unaffordable for millions, and we are the only developed country in the world which allows direct to consumer drug TV advertising and does not have some form of health insurance for all its citizens.

The last six Presidents of the United States have wanted some variation of universal healthcare for all citizens, but none have succeeded. The pharmaceutical, hospital, health insurance, and related lobbies are spending roughly a billion dollars per year to ensure our Congress does not get any ideas of trying to break the status quo and solve the problems. 

Maybe alternate approaches can help. My friend Steve Klasko, an author and leader of healthcare reform, and President and Chief Executive Officer of Thomas Jefferson University and Jefferson Health in Philadelphia, has a profound thought about this. He says, “Healthcare has to stop waiting for the government to come up with the answers.” On Tuesday, Amazon, Berkshire Hathaway, and JPMorgan announced they are forming a new healthcare company to deliver healthcare to their roughly one million employees.

When the largest retailer, the largest bank, and Warren Buffett decide to take action, the rest of American business leaders will take note and hopefully copy the effort. Warren Buffett said, “The ballooning costs of health care act as a hungry tapeworm on the American economy.” Jeff Bezos was modest in acknowledging how complex healthcare is and how difficult the new approach will be. Offering two-day guaranteed delivery of 100 million products is pretty complex too. I have a lot of confidence the disruption of the new move will be a game changer. Jeff is a profound thinker but is also incredible at keeping his eye on the future. About the new venture, he said, “Success is going to require talented experts, a beginner’s mind, and a long-term orientation.” Brilliant.

I have no doubt the three companies will find a way to create technology to provide simplified, high-quality healthcare for their huge number of employees. On Amazon, one click and you get what you want. In healthcare, there is no place to click. The electronic health records, which should help, are actually making things worse. Amazon has acquired dozens of companies since it began. The new healthcare company will likely do the same, making key acquisitions from among the large number of innovative healthcare startups.

Imagine a healthcare company that ignores the lobbyists, and is not motivated by financial incentives, but rather is motivated to  find the country’s best talent and stop the rise in healthcare costs and, at the same time, improve patient satisfaction and outcomes. I am sure CEOs of many large U.S. companies read about the Amazon move and asked themselves why they didn’t think of this.

One last comment. Although I am optimistic about the news of what the three companies are planning, we must not forget there are millions of people who do not work for one of the three and have no healthcare insurance. If we want a healthy economy, we need to have a healthy workforce.

More on the announcement: Amazon, Berkshire Hathaway and JPMorgan Team Up to Disrupt Health Care