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Amazon, Berkshire Hathaway and JPMorgan Team Up to Disrupt Health Care
Amazon, Berkshire Hathaway and JPMorgan Chase announced on Tuesday that they would form an independent health care company to serve their employees in the United States. The three companies provided few details about the new entity, other than saying it would initially focus on technology to provide simplified, high-quality health care for their employees and their families, and at a reasonable cost. They said the initiative, which is in the early planning stages, would be a long-term effort "free from profit-making incentives and constraints."
The partnership brings together three of the country's most influential companies to try to improve a system that other companies have tried and failed to change: Amazon, the largest online retailer in the world; Berkshire Hathaway, the holding company led by the billionaire investor Warren E. Buffett; and JPMorgan Chase, the largest bank in the United States by assets.
Various health insurance and pharmacy companies were hit by the news:
The move sent shares of health-care stocks falling in early trading. Express Scripts Holding Co. and CVS Health Corp., which manage pharmacy benefits, slumped 6.7 percent and 5.5 percent, respectively. Health insurers Cigna Corp. and Anthem Inc. also dropped. The health-care industry has been nervously eyeing the prospect of competition from Amazon for months. While the new company created by Amazon, Berkshire and JPMorgan would be for their U.S. staff only, this is the first big move by Amazon into the industry. The new collaboration could pressure profits for middlemen in the U.S. health-care supply chain.
Related: $54 Billion Anthem-Cigna Health Insurer Merger Rejected by U.S. Judge
CVS Attempting $66 Billion Acquistion of Health Insurer Aetna
(Score: -1, Troll) by Anonymous Coward on Tuesday January 30 2018, @07:14PM (26 children)
A sufficiently complex system is not amenable to Intelligent Design; worse yet, any given shape for such a system is guaranteed to become misaligned with respect to the conditions for which it initially arose—the design is guaranteed to become sub-optimal.
The only way to keep the shape of such a system aligned with dynamic conditions is to subject that system to Evolution by variation and selection, which is a process that can be completely mindless.
The philosophy of resource management that most closely aligns with evolution by variation and selection is Capitalism, where variation takes the form of supplier competition, and selection takes the form of consumer choice.
In contrast, a single-payer system would inhibit both variation (supplier competition) and selection (consumer choice), and would therefore inhibit evolution, and would therefore be doomed to become unfit for the conditions of society.
In the broader case, this is why socialist regimes always decay back into black markets, which are the most primitive form of the necessary foundation of society: Capitalism.
(Score: 5, Insightful) by Immerman on Tuesday January 30 2018, @08:24PM (25 children)
What you claim might come to pass *if* we were talking about socialized medicine - i.e. single-supplier healthcare. But we're not, we're talking single payer healthcare. I.e. it will only kill competition in the *insurance* marketplace - but do so by eliminating the profit motive from it.
Healthcare will still be delivered by a multitude of private corporate entities in thriving competition. The only thing removed is the insurance companies - which are parasitic by their very nature. By definition, the expected value of any insurance you buy is less than you paid - any other arrangement costs the insurance company money. If you sell something material there's a chance for wealth generation - I make pans, you need a pan, so I sell you a pan for less than it would cost you to make it yourself. Because I've specialized and can make a pan cheaper than you can, the difference in that cost is real wealth generation, and we share the benefit of it depending on where exactly the sales price falls between our respective production prices.
With financial instruments like insurance though, there is no wealth generation - Lots of people pay in, lots of benefits get paid out, and the benefits MUST be less than the payments by enough to cover administrative overhead and profits. There can be no possibility of improvement except by lowering overhead, and eliminating profit. Contrast that to healthcare itself, where there's lots of possible ways to improve the amount and quality of healthcare that can be delivered per dollar, and hence plenty of room for competition to improve things.
Heck, all you need to do is look at the current benefits-per-dollar delivered by Medicaid/Medicare, VA, etc. and we can see that government-run insurance already outperforms private insurance by a substantial margin.
(Score: -1, Troll) by Anonymous Coward on Tuesday January 30 2018, @08:44PM (11 children)
There will always be risk, and managing that risk is a service known as "insurance".
Not everyone needs risk to be serviced in the same way; meeting the needs of various risk profiles is how insurance companies create wealth for society. Competing insurance providers create wealth by finding better ways to manage risk; as with all activities in the market, the competition between participants is actually cooperation to find the best ways to allocate resources.
Part of the problem with the insurance market of today is that governmental meddling has indeed forced insurance companies to act more like payment networks rather than risk managers. However, the problem that needs to be solved is not payment, but rather risk management, and the only way your single payer option handles that is through Tyranny, which—as already explained—will only provide a transient solution at best.
(Score: 0) by Anonymous Coward on Tuesday January 30 2018, @09:05PM
If it weren't for that darn government and their pesky dogs!! We'd all be living the good life in anarcho-capitalist utopia!@!
For someone who seems to be intelligent you sure do make me question the dictionary.
(Score: 5, Insightful) by Runaway1956 on Tuesday January 30 2018, @10:44PM (8 children)
I strongly disagree. Insurance creates nothing, and they produce no wealth, for society at large, nor for individuals. The insurance industry is nothing more than legalized gambling. And, as you should be aware, the house always wins. The odds are stacked in favor of the house, such that, they can afford to make a big payout on occasion, just to keep the suckers coming back for more. When GP referred to the insurance industry as parasitic, he was right on target.
(Score: 2, Informative) by Anonymous Coward on Wednesday January 31 2018, @12:43AM (7 children)
That goes for the entire FIRE sector: Finance, Insurance, Real Estate.
They are all extractive.
-- OriginalOwner_ [soylentnews.org]
(Score: 0) by Anonymous Coward on Wednesday January 31 2018, @01:16AM (5 children)
I just bought another house. It's a disaster; the previous owner used it up for all its worth and then some, and it's falling apart and filled with unspeakable things.
I'm the person who's going to cut out the rot, replace the plumbing, upgrade the flooring, rehang doors, re-do electrical, apply new decor, and clean out the pathogens in order to revive what is otherwise a dead and useless structure; I'm the person who is going to make a livable space for someone, and I'm doing it solely for profit.
I'm providing a service to society. It's not extractive. It's productive. And, it's voluntary for everyone involved.
(Score: 0) by Anonymous Coward on Wednesday January 31 2018, @01:30AM (4 children)
You are talking about the construction trade.
I'm talking about landlords who repeatedly increase rents without improving anything.
...and who simply BUY from builders; they add nothing.
I'm talking about people who make money when they are ASLEEP.
-- OriginalOwner_ [soylentnews.org]
(Score: 0) by Anonymous Coward on Wednesday January 31 2018, @02:38AM (3 children)
When a landlord buys from a builder, he's paying for that building—it only got built because he bought it!
What's wrong with you? How can you not perceive that?
If you're not making money while you sleep, you're a drag on society; you're wasting so much time.
Even slums are a matter of management. Many people who rent are total trash—they are worse than unruly children—and need at least a modicum of external structure. That is a service.
(Score: 2, Interesting) by Anonymous Coward on Wednesday January 31 2018, @02:58AM (2 children)
The landlord PERFORMS NO LABOR.
What he is doing is NOT productive; it is EXTRACTIVE.
He makes money WHILE HE IS ASLEEP.
In Poland, 27 percent of the residences are in housing cooperatives.
Those folks have no landlords.
In particular, no landlords who continually jack up rents while making no improvements, but instead letting things fall apart.
What -those- folks have is a superior system.
-- OriginalOwner_ [soylentnews.org]
(Score: -1, Flamebait) by Anonymous Coward on Wednesday January 31 2018, @06:37AM
Why are those dwellings falling apart?
Why don't those renters pool saved resources and buy out the landlord?
Do things right. Follow the rules of the game. Only engage in voluntary trade; that's all we ask.
When you socialists take over (again), you'll quickly find that most slumdwellers ain't your average Pole, my friend. So, being the anti-capitalists that you are, you'll try to make a New Man, like you always do, and when traditional education fails, you'll start labeling undesirables for later transport to the
gulags"re-education" centers, far out of the way of civilized people, where you'll later send those misguided fools who have dissenting opinions. Then your society will collapse under the weight of its Tyranny, and you'll beg us Capitalists to come back and save your sorry, starving asses (again).(Score: 0) by Anonymous Coward on Wednesday January 31 2018, @01:54PM
Why are those dwellings falling apart?
Why don't those renters pool saved resources and buy out the landlord?
Do things right. Follow the rules of the game. Only engage in voluntary trade; that's all we ask.
When you socialists take over (again), you'll quickly find that most slumdwellers ain't your average Pole, my friend. So, being the anti-capitalists that you are, you'll try to make a New Man, like you always do, and when traditional education fails, you'll start labeling undesirables for later transport to the
gulags"re-education" centers, far out of the way of civilized people, where you'll later send those misguided fools who have dissenting opinions. Then your society will collapse under the weight of its Tyranny, and you'll beg us Capitalists to come back and save your sorry, starving asses (again).(Score: 0) by Anonymous Coward on Wednesday January 31 2018, @12:27PM
I don't agree. Rental property does provide value to tenants. Landlords are responsible for maintenance. Landlords must deal with the hassle of making repairs or out sourcing them. In my area, if a property can't be used for its purpose, the landlord must pay the tenant the costs of not being able to use the property. Renting allows for flexibility. It is much easier to pack up and move when you don't have to worry about selling a property. Try selling a house in area where the main employer left town. Renting lowers startup costs for new businesses. Even renting retail space has merits. Suppose I own a chain of clothing stores. I want to open a store in an area with completely different demographics. I can buy or build a store and be on the hook for all the associated costs (interest, taxes, closing closts) and pay 2X dollars to test the market for a year or I can rent and pay 1X dollars. Buying property outright might not be the best return on capital for a growing business so renting can make sense. So with the clothing store example, by renting, I can open two new stores with a known cost of the property for the length of the lease, or open one new store with the potential for unexpected costs. Renting is great for contractors on the move a lot. Have a 6 month contract to build ABC corps ERP system? The costs of 2 real estate transactions would be more than 6 months rent; that is assuming you can sell the property the day you are done and you sell it for what you paid for it.
I agree on health insurance, but with property and auto, it protects me from being wiped out financially by a storm, mechanical failure, etc. I may never have to use that insurance, but I gladly pay less than 1% of my income to protect me from losing 10 years or more of income should I be hit with some bad luck.
Disagree with you on finance too. Paying 5 or 10 dollars to easily buy or sell securities is much better than signing over a stock certificate or traveling to an exchange. As far as advisors go, there are fee only advisors that will function as a fiduciary that are required by law to act in your best interest (not that self regulated "suitable" FINRA stuff). Banks provide me a convenient way to pay for things and transfer funds. My credit card is easily replaced if lost or stolen. Cash, not so much. Paying it off every month means I pay 0 interest. It takes me 1 minute to move $10k from my bank account to my brokerage account. Much better (and safer) than carrying a wad of hundreds to a stock exchange and signing a stack of certificates and then contacting the company I just bought to provide my contact information so they can send me reports, meeting invitations, and dividend checks by mail. Taking a loan to buy real estate can make a lot of sense when you can deduct the interest from your taxable income and invest in securities that pay a return higher than your interest rate (especially when considering the tax benefit). You benefit even more if the money goes into a tax sheltered account like an IRA.
gewg, you strike me as a an intelligent and passionate individual whose heart is in the right place. I am like that, just remember that uncontrolled passion can be blinding.
(Score: 2) by FatPhil on Thursday February 01 2018, @09:39AM
And writing shitty operating systems is how Microsoft creates wealth for society?
And creating shitty insecure voting machines and cash machines is how Diebold creates wealth for society?
And selling Daraprim for $750/pill is how Turing pharmaceuticals creates wealth for society?
Are you confusing "doing business, and making a profit doing it" with "creating wealth for society". Clue - a small number of shareholders is not "society".
Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves
(Score: 2, Informative) by pTamok on Tuesday January 30 2018, @08:55PM (1 child)
With financial instruments like insurance though, there is no wealth generation - Lots of people pay in, lots of benefits get paid out, and the benefits MUST be less than the payments by enough to cover administrative overhead and profits.
While I understand the sentiment, this is simply not true, because you are missing what the insurance company does with the premiums before they pay out claims.
They invest them.
Insurance companies are effectively mutual funds, and a proportion of their profit is made by investing the premiums received for the period before a claim is made that they pay out on. You pay your car insurance at the beginning of the coverage period. The same is true for health insurance. So all the time you don't make a claim is time the insurance company can invest the money. If insurance companies simply collected the premiums and put the cash in a big pile somewhere, and paid out claims from that pile, then what you say is true. They would simply be collectivising risk, which, while good, is not the most efficient thing they can do with the money. They use the money. They can make loans, they can buy shares, or government bonds. They can even buy revenue-generating companies, or buy commodities. Some of the money is used for administration, and some is used to buy re-insurance, to lay off their risk portfolio with other companies that specialise in this: the re-insurers [wikipedia.org], like Munich Re [wikipedia.org], Swiss-Re [wikipedia.org], Berkshire-Hathaway [wikipedia.org] (Owners of Gen Re [wikipedia.org]), and Lloyd's of London [wikipedia.org] - you may of heard of some of those.
So, your insurance premium collectivises risk, pays for administrative services, and is an investment. This is a good deal for insurance companies that calculate risk properly: they get oodles of money to invest for free. It is not for nothing that actuaries are both clever and well paid.
Bookmakers, on the other hand, don't get very much time to invest the bets that are made before they have to pay out on the winners.
(Score: 1, Touché) by Anonymous Coward on Wednesday January 31 2018, @12:52AM
...in dirty energy.
When they get out of the Let's Add To Climate Disruption business[1] entirely and stop buying fossil fuel stocks, we'll have a starting point for a discussion.
[1] For those companies who write coverage for seaside dwellings, it's a particularly stupid business.
-- OriginalOwner_ [soylentnews.org]
(Score: -1, Redundant) by Anonymous Coward on Tuesday January 30 2018, @09:46PM (1 child)
The above comment [soylentnews.org] was marked "Troll", so I'm taking the liberty of posting it again for the original AC, and I will keep doing so.
(Score: 0) by Anonymous Coward on Tuesday January 30 2018, @11:03PM
The bot is learning how to impersonate others to continue the spam! Stop teaching it!!
(Score: 2) by slinches on Tuesday January 30 2018, @11:49PM (7 children)
There is no price competition in health care. The patient who needs an emergency heart transplant can't go shop around for the best value on surgeons. Private, for profit, insurance should act as a check on prices, providing a strong negotiator on the patient's (and their own) behalf to counteract the natural monopoly present in health care. In a single payer system the government takes on that role, so the profit motive to minimize the costs isn't there. People will demand more coverage and private health care providers will gouge the government as far as the treasury allows. We'd be better off to make it all government controlled than the mix of public/private entities you are suggesting. And that's coming from someone who considers himself to be quite libertarian. I do think there's a solution that isn't a complete government takeover of healthcare, but I think that would be predominantly focused on addressing price equity and transparency with only minor modifications on insurance regulations to to help better align insurer and patient interests.
(Score: -1, Redundant) by Anonymous Coward on Wednesday January 31 2018, @01:29AM
Most people don't shop around for much of anything; they buy something, and then react.
Or, more likely, they react to the stories that other people tell them about past experiences.
This is the same with health care; there is still room for iteration.
Indeed, this is actually one of the services that an insurance company provides; it is in the self-interest of the insurance company to pay attention to these iterations, and strike deals or move resources accordingly—and you are paying the insurance company to do that research for you.
You're correct about one thing: There is no price competition.
The prices for various services are hidden, or obscured by convoluted calculations; in the U.S., figuring out the cost of even a flu shot is a bizarre experience through the bowels of the insurance system.
This is the result of governmental meddling, which has forced insurance companies to become payment networks rather than risk managers.
(Score: 3, Insightful) by Immerman on Wednesday January 31 2018, @02:48AM (4 children)
It could - but quite obviously it does not.
A big (probably huge) part of the problem is that in the US there is no transparent pricing structure. If you want to do something totally normal, like give birth by the book, it's basically impossible to comparison-shop among hospitals beforehand - nobody will show you any prices, and it's quite possible for the price to vary by a factor of 10 or more from one hospital tot he next.
You want to drive down prices - make medical providers list their prices up front, right on their web page and in pamphlets in the waiting area - exactly how much a typical procedure X will cost. And if they charge you more than that, they should be able to justify exactly what complications justified the increased price. Combine that with patients having to pay some small percentage of their bill out of pocket, and you can bet most will shop around.
(Score: 2) by slinches on Wednesday January 31 2018, @04:22PM (3 children)
I agree completely on price transparency. That should include "menus" for common products/procedures and defining standards of acceptable margins on monopolies like patented drugs and emergency services. Why our congresscritters don't see that (or intentionally ignore it), I really don't understand.
(Score: 2) by Immerman on Wednesday January 31 2018, @05:59PM (2 children)
Seems easy enough to understand to me - bribery. Ahem, sorry, I mean "lobbying".
(Score: 2) by captain normal on Wednesday January 31 2018, @06:48PM (1 child)
Don't forget "professional courtesy"---as in lawyers and sharks.
When life isn't going right, go left.
(Score: 2) by Immerman on Wednesday January 31 2018, @09:12PM
Ah, but does it flow both ways? I certainly wouldn't want to be the shark thrown into a lawyer tank to find out...
(Score: 0) by Anonymous Coward on Thursday February 01 2018, @01:20AM
Most people don't shop around for much of anything; they buy something, and then react.
Or, more likely, they react to the stories that other people tell them about past experiences.
This is the same with health care; there is still room for iteration.
Indeed, this is actually one of the services that an insurance company provides; it is in the self-interest of the insurance company to pay attention to these iterations, and strike deals or move resources accordingly—and you are paying the insurance company to do that research for you.
You're correct about one thing: There is no price competition.
The prices for various services are hidden, or obscured by convoluted calculations; in the U.S., figuring out the cost of even a flu shot is a bizarre experience through the bowels of the insurance system.
This is the result of governmental meddling, which has forced insurance companies to become payment networks rather than risk managers.
(Score: 0) by Anonymous Coward on Tuesday January 30 2018, @11:51PM
one if the major drivers for health care costs is hospitals etc. recouping costs incurred by those who can't pay by those who can pay.
Emergency rooms in the US are not allowed to refuse service. Yes there are hospitals that do discriminate admissions and transfers. but not in their emergency rooms. So they will naturally push the limits on the minimum for "stabilize the acute condition" before releasing (kicking out) the patient.
They can refuse to admit patients for further observation or care once the patient's current acute needs have been "met".