The United States has a healthcare problem. The country spends more per capita on healthcare than any other place in the world, about double the average amount for other developed countries.
The industry is becoming a huge money suck, and that effect is now hitting individuals. As people are paying more and more out-of-pocket for their healthcare, it’s not uncommon for a serious illness or chronic disease sending entire families deep into debt.
Enter Amazon, JPMorgan Chase and Berkshire Hathaway. The three giants of industry have teamed up to create a new healthcare company and take on this big, thorny problem, starting with their 1 million U.S. employees.
The companies recently chose surgeon and author Dr. Atul Gawande to lead the venture. He will now be tasked with “fixing” the healthcare system.
But can the system just be fixed? How? How could Amazon, Berkshire Hathaway and JPMorgan Chase use their expertise to change the system, and what would the result look like?
We explore answers to some of those questions in our most recent Health Tech podcast. Listen to this episode below or subscribe to the show in your favorite podcast app.
Theories on how to fix the healthcare system take a variety of different forms, from empowering patients to changing our definition of health entirely. But first, we need to understand how the system works today.
Maura Little, the executive director of Seattle-based healthcare innovation hub Cambia Grove, said in the episode that the healthcare system can be separated into five points: Patient, provider, purchaser, payer and policymaker.
Let’s say a hypothetical patient called Jeff goes for a doctor’s visit. Jeff is the patient and his doctor and health system are the provider. So far, so good.
But the insurance side of things is more complicated. Jeff gets his health insurance through his employer, so his employer is the purchaser because it purchased healthcare on Jeff’s behalf. Jeff’s insurance company is the payer because it ultimately reimburses his doctor for this visit. And finally, policymakers ranging from Jeff’s senator to the leader of his state’s healthcare authority impact almost every part of his healthcare experience.
Little said the Cambia Grove wanted to understand how these five parts of the system work, so it hosted a series of talks on the subject.
“We put all of them on stage together and we said, ‘how do you all work together?’ And by and large, the real conversation equated to: They don’t,” Little said. “We thought we were going to come up with something completely different, but then when we came out of the conference, we literally looked at a graphic recording of the conversation and we had five distinct silos.”
Little’s takeaway was that only one of these groups holds the power to change the system: Patients.
“That patient or that consumer does have the opportunity to make real sustainable changes in the healthcare system. But there’s a lot of barriers,” Little said.
Removing some of those barriers, like the lack of choice in insurance and healthcare providers, could give patients more power to influence companies. In other words, it would make healthcare more like a free market, where customers leverage their buying power to regulate companies. But that possibility is a long way off, and in the meantime, Little said technology can help fill the gap.
“Data is a big one. If we could unlock some of that data to help people customize their journey and be able to utilize data to help shape what they need out of the system, that’d be huge,” she said.
Technology will doubtlessly be an essential tool for healthcare in the coming years, regardless of other changes that may come. Chad Robins, the CEO of Seattle biotech company Adaptive Biotechnologies, said Amazon and its partners have a real opportunity to revolutionize health technology with this venture.
Part of his reasoning comes down to insurance. Amazon, Berkshire and JPMorgan will all become self-insured, meaning the companies can encourage their employees to embrace new technologies by making sure their insurance will reimburse them for doing so.
Robins pointed to precision medicine as a prime example of this dynamic at play.
“One of the key tenants of precision medicine is that we’re treating each patient based on their own molecular profile, which will provide the best care for the right patient at the right time,” Robins said. The approach is relatively new and relies on technology that sequences biometric data and artificial intelligence that matches the data to potential treatments.
“And that, ultimately, should be a value proposition to this consortium, and obviously more broadly the healthcare system, if done right,” Robins said. “Berkshire, Amazon, and JPMorgan could really put their stake in the ground and be a leader in these efforts.”
But as the U.S. grapples with its healthcare problem, it may not be enough to look just at the current system and future technologies. Ryan Schmid, the CEO of membership-based primary care company Vera Whole Health, said that getting Americans healthier actually starts outside the healthcare system altogether.
“In 1946, I believe, the World Health Organization defined health as not merely the absence of disease or infirmity, but a state of total social, mental and physical wellbeing,” Schmid said. “I have this visual image of whomever [those] folks are screaming from the mountaintop this definition and warning us all to leave room for the social [and] mental. And, of course, I don’t think that we did.”
Schmid argues that the best way to lower cost and improve outcomes in healthcare is actually to start in communities around the country, encouraging social, mental and physical health long before someone gets sick in the first place.
Those efforts would include things like “affordable produce and good food; safe streets for people to walk on and be outside and engage with one another; more money going into schools and supporting families that are struggling,” Schmid said.
He describes these community health efforts as a way to tackle “the things that are creating stress, anxiety, depression — that are then resulting, ultimately, [in] chronic conditions and high claims.”
Schmid said his argument is backed up by Vera’s experience with a similar effort. The company operates clinics on corporate campuses. The business model is dramatically different from traditional primary care: Employers pay a monthly membership fee for every employee, and employees can then use the Vera clinic as much as they need.
Schmid said that, by doubling their investment in up-front primary care, Vera’s clients can avoid costly health problems in the future and decrease their overall health costs by 25 percent. The same theory could be used on a huge scale to increase overall health in communities, heading off health problems years before they manifest.
As for new technologies and other innovations to the system, Schmid says he’s skeptical how well they will work without a component of public or community health.
“Most of that is really just rearranging the chairs on the deck of the Titanic if — as a whole, as a culture — we don’t start to think about health as being social, mental and physical,” Schmid said. He said we need “a system that is designed to treat the whole person, so that like we ultimately get less sick as a society. Which, I think, is not the direction that we’re currently heading.”