Why Amazon-Berkshire-JPMorgan Health Venture has a chance to be successful?

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1). It has set out to disrupt healthcare as we knew it by making individual's well-being front and center of a healthcare ecosystem that optimizes clinical and business, science and technology, obsession with consumer experience and operational efficiency;
 
2) The founders expect it to be entrepreneurial and have strategic stamina and economic freedom to experiment with it through success and failure until it will get it right;.

3). The founders are motivated to scale up this employer-based experiment to fixing healthcare on a national scale,

4) The founders have strategic and economic incentive to scale this venture outside the US

5) The project will have broad and deep favorable access to Amazon's information technology infrastructure, services, and operations

6) The project will have broad and deep access to national scale economic analysis expertise and resources for business and economic modeling

7) The founders engaged Dr. Atul Gawande as the project's executive Thought Leader, 'Clinical Compass' (Thanks @Tony Benedict)

8) The project's COO and the Amazon team will figure out how to monitor and measure outcomes and other KPIs that can be quantified in a way that today's healthcare ecosystem does not do (Thanks @Tony Benedict)

9) With Amazon buying Pill Pack it puts a new twist on fulfilling, monitoring and and driving compliance for patient prescriptions. Medication adherence is low hanging fruit and Amazon will scale Pill Packs business model to compete with the major pharmacy providers (Thanks @Tony Benedict)

9) The project's COO and the Amazon team will figure out how to disrupt with technology (Thanks @Tony Benedict)

10) The project's scale as measured by the size of the target patient population (patient count) is small enough yet it is diverse enough for commodities age, gender, and geographic locations,

11) The founders' pursuit of Out-of-the-Box thinking unconstrained by legacy healthcare players' status quo thinking over 4+ decades (Thanks @Tony Benedict)


Other thoughts?

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Ron Ribitzky
67 months ago

5 answers

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It's a grand experiment backed by large corporations willing to fund it to success. The proof will be when they roll out their plan and execute it. The question is what problem will they solve first?

Tony Benedict
67 months ago
Tony Benedict -- a lot is unknown and yet TBD. Nevertheless, considering what we do know about the players and the venture, what other considerations play to the potential of this project to be successful? - Ron 67 months ago
Agree. - Dr. David E. 64 months ago
DEFINE - chance? - Dr. David E. 63 months ago
ABJ will soon learn that healthcare is not just SCM; humans are not widgets - Dr. David E. 63 months ago
#! - The Data security problem. I dont care to see Jeff Bezos' junk. - Dr. David E. 63 months ago
I would agree with David Brailer, he makes good points. (FYI, I went to click on link again and it doesn't connect - not sure if site is down or article was pullled). The link I posted yesterday RE: the 11 Legislative laws would be a good start to induce competitiion into the market, plus it would change the fundamental nature of the business model from government subsidized to market based. - Tony 62 months ago
Agree - well said - Dr. David E. 62 months ago
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Great question. The obvious is that none of the companies are constrained by 40 years of status quo thinking, so I would expect them to try new things and either fail fast or scale up if the ideas work.. Out of the box thinking is noticeably absent in healthcare. I think Dr. Atul Gawande will focus on those chronic illnesses that drive the highest rates of hospital admissions. Asthma, diabetes heart failure, etc. are chronic diseases that have some of the highest rates of hospital admissions and readmissions. Dr. Atul Gawande will be the clinical compass while the new COO and the Amazon team will figure out how to disrupt with technology to implement preventative measures and also how to monitor and measure outcomes that can be quantified in a way that hospital systems today are not. With Amazon buying Pill Pack, that puts a new twist on fulfilling, monitoring and and driving compliance for patient prescriptions. Medication adherence is low hanging fruit and Amazon will scale Pill Packs business model to compete with the major pharmacy providers. That's certainly a good start.

Tony Benedict
67 months ago
Thanks Tony Benedict. Added to the list - Ron 67 months ago
Well said. - Dr. David E. 64 months ago
PILLPAK - really? - Dr. David E. 63 months ago
FREE - but make copay which may be higher than the pills? - Dr. David E. 63 months ago
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Cost Transparency

Insurance re-imbursement to physicians and hospitals is a secret never to be revealed . Without revealing insurance payments, copays and out of pocket expenses costs and Value =outcomes/costs can’t be determined by ABJ; or others.

Any thoughts?

Dr. David E. M
63 months ago
True. This is a very contentious area to discuss because true cost of patient care and how hospitals price their services is somewhat of a protected monopoly. It almost seems intentional because of how it was setup. There's a long discussion here for sure. If you look at how Medicare was setup for reimbursement (volume based - do more, get paid more), The income producing asset base got too big - Tony 63 months ago
Cont'd: So they had to charge higher prices to sustain the asset base. When switch form volume to value hits full swing, that asset base is way to big and can no longer be supported by not only the lower payments, but less payments. ROA should become a metric for Finance to make decisions about scaling down some assets to get more in line with census and patient volumes. - Tony 63 months ago
Cont'd: Probably not happening yet. - Tony 63 months ago
Very well said; congrats - Dr. David E. 63 months ago
Cont'd: Assets not only being hospitals, ORs, Cath Labs, but equipment (imaging is big cost to maintain). Another thought on Amazon and PillPack. If they increase the Amazon Prime or create a new one for Healthcare, can they include prescriptions free for cetain generics as part of monthly Prime fee? - Tony 63 months ago
Actually, AP was just reduced for Medicaid patients. Loss Leader, no doubt. - Dr. David E. 63 months ago
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A-PRIME

The company offers a discount on its Prime membership program to the millions of recipients of Medicaid, the public health insurance program for low-income Americans.

They can receive the benefits of Prime — including free fast shipping and video streaming — for $5.99 a month, less than half the standard monthly fee of $12.99.

Any thoughts?

Dr. David E. M
63 months ago
Interesting. I'm wondering if Amazon is planting a seed to hook Medicaid recipients on their service so that they can offer up additional (healthcare related) services and have them subsidized by Uncle Sam? - Tony 63 months ago
No doubt the upsell? - to patients who can least afford it - Dr. David E. 63 months ago
I'm a little leary of individuals who consider themselves "strategists" when they have little if any healthcare experience. The post below the article outlines the major legistlative/regulatory problems with US style (IMHO) "government subsidized monopoly of healthcare. https://www.linkedin.com/pulse/10-legislative-acts-which-devastate-quality-health-care-green-md/ - Tony 62 months ago
That being said, true competition, rather than state controlled / subsidized capitalism would remedy a lot of the challenges, especially price transparency. Here's an interesting thought: Advocates of single payer government healthcare like in UK, still have not price transparency (to consumers) which is wny they have price controls in those type systems. The government knows the price, - Tony 62 months ago
The consumer doesn't. Still doesn't make it a great system because you don't know guarantees (outcomes) and can't shop around. - Tony 62 months ago
Let's hope that the ABC approach blows up the government subsidized monopoly. - Tony 62 months ago
Agreed - I practiced in Europe for a bit - thank you - Dr. David E. 62 months ago
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CMS

Federal law has made it illegal to provide pro-bono care to Medicaid or Medicare patients.

Any thoughts?

Dr. David E. M
63 months ago
U.S. launching program to spur investment in AI for health care - Dr. David E. 62 months ago

Have some input?