Berkshire, Amazon, JPMorgan

[Mugwump]

Excitement and skepticism as Berkshire, Amazon, JPMorgan announce plan to tackle American health care problems

Setting three prominent businesses – Berkshire Hathaway, Amazon and J.P. Morgan Chase – on course to tackle the problems of American health care drew excitement and skepticism Tuesday.

"I'm kind of excited," said Steve Martin, chief executive of Blue Cross Blue Shield of Nebraska. "We can't continue to let our health care system be this fragmented and inefficient."

But Chuck Olson, chief executive of the Omaha insurance brokerage OCi Insurance and Financial Services, said Tuesday's announcement by Warren Buffett and CEOs of the other two companies is "great PR. In the long run, they're not going to change anything unless you can control the guy that's providing the care.

"The question's going to be, 'What can they do differently than everybody else isn't already doing?' You can have all the money in the world, but you've got to pay the doctor, the provider who decides how much they're going to charge."

In a joint press release, Amazon CEO Jeff Bezos, J.P. Morgan CEO Jamie Dimon and Buffett, chief executive of Berkshire Hathaway, said their three businesses would form a nonprofit company to seek "ways to address healthcare for their U.S. employees, with the aim of improving employee satisfaction and reducing costs."

Beyond that, Dimon said, "Our goal is to create solutions that benefit our U.S. employees, their families and, potentially, all Americans."

The venture is in its early planning stages, they said, with the initial formation "spearheaded" by Berkshire investment officer Todd Combs, J.P. Morgan managing director Marvelle Sullivan Berchtold and Beth Galetti, a senior vice president at Amazon.

The new company will focus first on "technology solutions that will provide U.S. employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost." The press release said a long-term management team, headquarters location and other details would be made public later.

Martin, of Nebraska's Blue Cross, said his hope is that the Berkshire-Amazon-J.P. Morgan effort would lead the way to broad improvements in health care, including ways for consumers to find the best, lowest-cost care; changes in how hospitals and doctors are paid; ways to control medical errors; and even new laws.

Martin said Blue Cross has talked with Berkshire companies about ways to improve health care.

He said he thinks the message is: "We're going to help our employees cut through the paperwork and the multiple players, consolidate partners who are willing to be transparent with profit, get the best care for employees, build new tools that can help employees figure it out."

Finding nationwide solutions would require changing the rules, he said, and if the three companies are successful, they could influence Congress, too. "They could let Obamacare evolve into something that both sides can accept."

In the press release, the three CEOs talked about health care problems.

"The ballooning costs of healthcare act as a hungry tapeworm on the American economy," Buffett said. "Our group does not come to this problem with answers. But we also do not accept it as inevitable."

Putting their resources behind "the country's best talent can, in time, check the rise in health costs while concurrently enhancing patient satisfaction and outcomes," Buffett said.

Bezos acknowledged that the health care system is complex. "We enter into this challenge open-eyed about the degree of difficulty. Hard as it might be, reducing healthcare's burden on the economy while improving outcomes for employees and their families would be worth the effort."

Dimon said said the three companies "have extraordinary resources," and people want "transparency, knowledge and control when it comes to managing their healthcare."

U.S. Sen. Ben Sasse (R-Neb), who campaigned on health care issues, said the new venture is "an exciting development.

"We need more health sector innovation," he said "More data and new technologies can empower patients and thereby disrupt our outdated system."

Paul Ginsburg, a health policy expert with the Brookings Institution, said Buffett's comment about health care being a tapeworm in the economy "is very much on the money."

But he said it's not clear that the companies' effort will be "a good investment that saves enough to be worth the time and capital they're putting into it, or is this going to be something that points the way that other employers can follow and thus becomes much more threatening to health-care providers? That's something we don't know.

"Hopefully, it will go beyond them and produce tools and strategies that others can use that will have a bigger effect on the health-care system."

It's possible, he said, "that both by putting brain power into it but also the sheer number of covered lives that they're involving in this, those two areas are a source of optimism that this could be successful."

Among them, the companies have more than a million employees.

Dr. Eric Schneider, senior vice president for policy and research at the Commonwealth Fund, a health care think tank, said a high-performing, affordable health-care system is crucial to the nation.

"To date, improving health care has been slow and difficult work," Schneider said in a prepared statement. "But if they develop a better health-care experience for patients, and that can be extended to all who need care, they could make a powerful contribution to American health care."

Buffett has used the "tapeworm" description before, saying health care cost costs are eating up the country's wealth from within. In 2010, Buffett said the health care system was "untenable over time" and hurts the U.S. economy in relation to other developed nations.

"So we have a health system that, in terms of costs, is really out of control," Buffett said then. "And if you take this line and you project what has been happening into the future, we will get less and less competitive. So we need something else."

In 2012 he said he favored a complete overhaul of the U.S. health care system. Buffett has supported the federal Affordable Care Act, saying in 2012 that the Supreme Court was correct in upholding the law. He added:

"The health-care problem is the No. 1 problem of America and of American business. ... In terms of cost, it's going to require a huge change."

Martin, who is retiring as CEO of Blue Cross in March, said the alliance of the three major businesses gives him hope that the major changes in health care are possible.

"These are smart people with really smart companies that are not tied to the health care economy," he said. "I think what they want to do is best for the workplace."

[BallAquatics]

It has to start somewhere.  The one thing I was in agreement with Hillary was her stance on the Affordable Health Care Act.  Sure it's not perfect, but you have to start somewhere.  If the politicians had put half the effort into improving the Act that they have put into trying to destroy it.....

Dennis

[Mugwump]

It has to start somewhere.  The one thing I was in agreement with Hillary was her stance on the Affordable Health Care Act.  Sure it's not perfect, but you have to start somewhere.  If the politicians had put half the effort into improving the Act that they have put into trying to destroy it.....

Dennis

...I know......I've wondered just how much lobbyist money was involved too.