“News that Jeff Bezos’ Amazon and Warren Buffett’s Berkshire Hathaway are forming their own healthcare company with JPMorgan Chase to increase transparency for their employees could be bad news for insurers and pharmacy benefit managers,” Bruce Japsen writes for Forbes. “Health insurance companies and PBMs have long said they want to bring more transparency to the U.S. healthcare system, yet consumers often don’t know the true cost of healthcare. Prices are negotiated in secret and doctors don’t often know what their own services cost or what their patients will be charged.”
“Details of the new company Amazon, Berkshire and JPMorgan want to create remain sketchy, but the idea that they want to bring more transparency is one of the disclosed goals. ‘Our people want transparency, knowledge and control when it comes to managing their healthcare,’ said Jamie Dimon, Chairman and CEO of JPMorgan Chase,” Japsen writes. “‘Resistance to transparency in healthcare remains high,’ says Network for Regional Healthcare Improvement CEO Elizabeth Mitchell, who welcomes Amazon, Berkshire and JPMorgan’s new company. ‘Employers who pay for this care still don’t have insight into the relative value of what they are buying. They are looking for a way to have assurance that they are paying a fair price for a high quality service.'”
“The Network for Regional Healthcare Improvement has long said any health reform effort needs to look closely at transparency because data that reveals the total and true cost of care is difficult to find. In a report last year, NRHI said health spending by U.S. commercial insurers can vary by $1,000 or more per year per patient, depending on where enrollees live,” Japsen writes. “Shares of health insurers like Aetna, Anthem and UnitedHealth Group lost 5% to 10% of their value while pharmacy chains CVS Health, Walgreens Boots Alliance and drug makers with expensive medicines like Abbvie also took a hit on Wall Street. And the big PBM, Express Scripts, also lost more than 2% of its value Tuesday.”
Read more in the full article here.
MacDailyNews Take: Yup. ‘Bout time, too!
Obviously the health insurance system in the United States of America is FUBAR and an unspeakably massive drag on the economy overall.
The basic problem is that the prices of healthcare are not defined. They are elastic. What else do you buy without seeing the price upfront? Without knowing the hourly rate upfront? Or the cost of typical procedures? You go to a garage and it says on a board the labor cost per hour. It shows the cost of an oil change, brake services, a tune-up, etc. You go into Target and the price is on the product. You can compare that price with Amazon’s and Walfart’s and then decide where to buy. Not so with medical services, tests, and procedures.
Ever wonder why a new doctor asks what your insurance plan is upfront? It’s not just to determine that you have insurance, it also determines how much you’ll pay. The prices change based on the insurance company/plan. Ever wonder why, when you have “good insurance,” the doctor’s office seems excited to hear it? Or how well you’re treated over others with lesser (read: less profitable) insurance companies/plans? They want to keep you happy. You’re a high-value patient. If you’ve ever gone from crappy insurance to good insurance or vice versa, you know what we mean.
Until the medical costs are displayed upfront and everybody is charged that rate, regardless of their plan, this mess will continue. You can’t have real competition that drives down costs until the actual costs are clearly known by all parties and uniform per person regardless of their insurance or even lack thereof. — MacDailyNews, March 7, 2017