A partnership of Amazon.com Inc., Berkshire Hathaway Inc. and JPMorgan Chase & Co. is forming an independent company, \u201cfree from profit-making incentives and constraints\u201d to \u201cprovide U.S. employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost.\u201d<\/p><\/blockquote>\n
and, as you might suspect, I have something to say about that.<\/p>\n
Now, I should say that I\u2019m not a healthcare actuary, and my experience in that field is limited to the reading required for the subject-matter actuarial exam, attending training sessions, and being guinea pigs, since my employer, as a benefits consulting firm, in addition to advising its clients on pensions, also advises on employee benefits in general.<\/p>\n
Which means that, when I started, we had \u201cflexible benefits\u201d with a pool of money that was intended to be usable for healthcare, dental, vision, and so on.<\/p>\n
And we had HMOs, and \u201cwellness credits\u201d which we earned by pledging not to smoke, and getting our cholesterol checked.<\/p>\n
Which later on became high-deductible Consumer-Driven Health Plans and ever-more involved questionnaires on health habits.<\/p>\n
And now the wellness credits are gone, and we\u2019ve got \u201cprivate exchanges\u201d and \u201cdefined contribution\u201d benefits.<\/p>\n
And, mind you, this is all within the context of employers providing benefits to their employees on an administrative-services-only basis, in which they pay the benefits plus a small fee to the insurance company for administering the plan.\u00a0 There\u2019s no \u201cprofit\u201d in the system, in the form of hidden costs coming from how the insurers underwrite the benefits, because there is no underwriting, not in the way that premiums are set for individually-purchased policies, anyway.\u00a0 (What the level of ASO fees is, I couldn\u2019t say any longer, though I used to know this.)<\/p>\n
So Bezos, Buffet and co. are not doing something brand-new, in attempting, as an employer, to make another attempt at controlling healthcare costs.<\/p>\n
Maybe they\u2019ll be the ones to figure it out, as McArdle reports that they\u2019ll going to use all their technological prowess \u2014 but the portion of the overall healthcare dollar, when it comes to employer-sponsored plans, that\u2019s going to administration, is relatively small in the grand scheme of things, and I don\u2019t see how their tech prowess would be enough to bargain down rates at their employees\u2019 hospitals, especially when these corporations have employees spread across the country.\u00a0\u00a0One item where there is room for improvement is the fact that companies want us to act as \u201cconsumers\u201d and comparison-shop, but it\u2019s still very difficult to do that, except to a very limited degree for certain procedures.\u00a0 Even the websites that claim they\u2019ll help you do this, don\u2019t really help you find out what you need to know, in making a decision about where to have a test or elective procedure \u2014 but little of this is due to tech limitations; to a much greater degree it\u2019s a matter of the unwillingness of providers to provide this information.<\/p>\n
And, of course, my pet solution to healthcare costs<\/a>, the staff-model HMO in which insurer-provider entities compete to provide healthcare based on cost and quality, only work if individuals are buying health coverage as individuals, so that a local healthcare provider can get customers from the local area, rather than, at present, large companies contracting with national providers to cover their employees nationwide.<\/p>\nThe bottom line is that they\u2019re not the first employer that\u2019s tried to transform healthcare and they won\u2019t be the last.\u00a0 But, hey, good luck to them!\u00a0 Maybe they\u2019ll solve one piece of the puzzle.<\/p>\n
\u00a0<\/p>\n
Image:\u00a0\u00a0https:\/\/commons.wikimedia.org\/wiki\/File%3ADoctor_examines_patient_(1).jpg; By Unknown photographer [Public domain], via Wikimedia Commons<\/p>\n<\/body><\/html>\n","protected":false},"excerpt":{"rendered":"
So Megan McArdle reports today that A partnership of Amazon.com Inc., Berkshire Hathaway Inc. and JPMorgan Chase & Co. is forming an independent company, \u201cfree from profit-making incentives and constraints\u201d to \u201cprovide U.S. employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost.\u201d and, as you might suspect, I have something […]<\/p>\n","protected":false},"author":2209,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[194,356],"class_list":["post-8092","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-employer-healthcare","tag-health-insurance"],"yoast_head":"\n
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<\/p>\n