11 ms·

Amazon Health

284 points by joeyespo 9y ago

nissimk 9y ago
Once the infrastructure is in place to automate healthcare delivery they can lobby the government to implement a single payer solution and they will be the only service provider available to deliver the necessary services. It's a virtual gold mine. You heard it here first: death panels as a service. Triage by algorithm would remove one of the most disturbing responsibilities in medicine.
- dhimes 9y ago
  Your imagination's talent for dystopia is both startling and frightening.
- throaway394324 9y ago
  And with an advertising/product/consumer influence infrastructure in place they could just arbitrate that indirectly with getting you to consume certain products under certain circumstances to affect certain conditions in both individual and collective behavior towards a desired state.
- gaze 9y ago
  I’m imagining buying more red meat causing your premiums to rise.
- esfandia 9y ago
  They could then also force people to eat healthy (i.e., at Whole Foods) or else lose their health coverage! ;)
- AnimalMuppet 9y ago
  > Triage by algorithm would remove one of the most disturbing responsibilities in medicine. It would shift the responsibility - to the algorithm writers. It doesn't remove it.
thinkingkong 9y ago
I read the original announcement and also this analysis. Is it decided that Amazon will “own” the healthcare provider? As far as I can tell this is still a joint effort by several companies with the same philosophy on how to solve the problem. Presumably if other large companies were aligned they could create their own joint partnerships or discuss the possibility of joining this one.
- swalsh 9y ago
  It doesn't sound like Amazon would own providers, or try to become a payer. Instead, it becomes an aggregator of providers and payers, gaining negotiation power, which it can leverage to lower costs for healthcare "demand".
- amsilprotag 9y ago
  If we assume investors are omniscient, there is somewhere between a 3% and 11% chance Amazon Health will commoditize the market. Weigh those numbers a bit upward if you think Amazon can't do it instantaneously. CVS dropped by just over 4 percent by midday, UnitedHealth plunged a whopping 11.5 percent, Express Scripts was off by 3.6 percent, Cigna was down by just under 7 percent and Walgreens fell by 2.6 percent. https://techcrunch.com/2018/01/30/cvs-other-health-stocks-down-upon-amazon-jpmorgan-berkshire-healthcare-co-news/ https://techcrunch.com/2018/01/30/cvs-other-health-stocks-do...
- Thriptic 9y ago
  One avenue this entity could take is to offer itself as a non-profit third party administrator of a self-funded plan for other companies. Large companies typically put up the money for health insurance anyway combined with employee premiums and then pay a TPA company or health insurer to create the benefit plan and administer it for them. They don't actually buy insurance as a product from a health insurer for their employees. Alternatively, they could pool funds and create an actual insurer. The trouble with Amazon trying to become THE payer or TPA is that insurance is highly variable across the country. There are many different laws governing insurance in each state, and you need to strike business agreements with literally countless small practices, hospital systems, lab service providers, drug companies, outpatient clinics, etc. It would actually be a massive administrative feat for Amazon to provide solid coverage across the US.
aaavl2821 9y ago
The article makes the point that the companies have complementary business competencies that could help them deliver a better healthcare experience (tech, logistics and customer service at amazon; reinsurance at berkshire; capital at JPM), but there is another advantage to these three companies working together: scale. amazon and berkshire are in the top 10 employers, and JPM is in the top 25. while most of the talk around improving healthcare cost / quality in the US centers around technology, value based care, etc, the real economics, and company's strategies, are largely driven by scale. this collaboration is a way to immediately get a strong negotiating position in any discussion and to provide a sizable test bed for various initiatives
- rezashirazian 9y ago
  If these companies get together and create a not for profit, how can for-profit providers even begin to negotiate with them. Also given the scale of these companies, wouldn't this raise healthcare costs for all others who don't work for one of them?
  - gamblor956 9y ago
    Not necessarily. The largest driver of healthcare costs in the US is pharma profits. This venture, combined with the CVS/Aetna merger and the common drug factory venture, should place substantial downward pressure on pharmaceuticals to lower their prices or lose hundreds of millions in business...forever.
    - aaavl2821 9y ago
      The largest driver of cost in the US healthcare system is actually hospital care (30% of spend) while drug costs account for ~10% Not to say that drug prices aren't too high but they are just one piece of the puzzle
      - tdfx 9y ago
        Where could one find more sources for this kind of information?
watertom 9y ago
I think these 3 will no longer provide health insurance for their employees, they are going to create a new more affordable framework and they will allow any other large company to participate. The goal will be keep the cost of insurance the same for the employees, while eliminating the cost for the companies entirely, which is why this will take off. It’s crazy to have employers paying for healthcare, this I believe will be the beginning of the end of employer paid healthcare. It won’t happen overnight but it will go fast because every employer wants to drop that overhead cost.
- perseusprime11 9y ago
  Interesting idea. Do you know what is the current overhead for Amazon in terms of $$$?
  - ihsw2 9y ago
    It's about $19K for employer-provided family-coverage. Considering the three companies have about 1M stuff in total, that represents ~$20B in annual recurring costs. This effort combined with accelerating automation will lead to a much better capital:labor cost ratio (and, depending on who you ask, reduction in labor costs is massively bad for wealth equality).
    - yeukhon 9y ago
      Do you have a source backing on $19K?
      - vadym909 9y ago
        I've seen and paid employer health benefits bills- $15K-$24K is the range depending on the quality of healthplans. About 10-25% of this is what employees pay as their part of the premium normally, the rest is employer paid. Stingier companies cover 75% of the employee cost and 50% of dependents cost.
      - adventured 9y ago
lukateake 9y ago
Am I shadowbanned? https://news.ycombinator.com/item?id=16273567 https://news.ycombinator.com/item?id=16273567
- B-Con 9y ago
  It would seem not. You got 4 points on the other one.
perseusprime11 9y ago
I look at this as a first step towards understanding the complexity of Healthcare in US with the goal to ultimately make health care more affordable to them and their employees. This may end up being nothing which is why the tone in the announcement was a bit on the “let’s see what happens”. This could also be a cool move by Bezo to bolster up his image as lately the media is hyper focused on tech companies.
discodave 9y ago
The not for profit part and the fact that this entity won't be owned by any of the companies outright provides an interesting path to a single-payer system. 1. Amazon, Berksire, JP Morgan and others create a large "payer" of healthcare. 2. There are no shareholders or other parties interested in making a profit off of this payer because it is a cost center for the big (or small) companies using it. 3. Wait for the current iteration of the Republican party to lose influence and single-payer to gain more traction politically. 4. When politicians are looking for a way to create a single-payer system, Amazon and friends offer to hand over their large payer to join Medicare, Medicaid and VA systems to form one large government payer, effectively nationalizing the healthcare for Amazon and co.
- maxerickson 9y ago
  Many existing large insurers are non profits. With millions of members. BCBS Michigan isn't the biggest one and has 4.3 million members.
RyanUnited 9y ago
Fuck this and fuck Amazon. That's an overvalued company by magnitudes and just like Enron all of WS knows it they just don't care cause the bond market is in dire straits. Why doesn't anyone mention the ludicrous cost of becoming a doctor or funding FDA pharma research/trials. Dr in the US make twice as much as other advanced countries and the AMA has an iron grip.
deleted 9y ago
[deleted]
akuji1993 9y ago
I will not touch anything with a ten-foot-pole that J.P. Morgan Chase has touched tbh.
chatmasta 9y ago
> insurance operates best at more scale, not less: first and foremost, the larger the pool, the more risk can be spread, as well as obvious efficiency gains in administration. This may be true from the perspective of the insurance companies, but it does not mean that premiums will be lower with a larger risk pool. The global risk pool includes elderly and disabled people whose risk is paid for by healthy people. Smaller risk pools of more homogenous populations can result in lower overall premiums since they do not need to cover the highest risk individuals. For example, a corporation is comprised of employees almost entirely under retirement age, many age 20-30, and in relatively good health. This is why companies are able to offer HMO plans, because by isolating their risk pool they can more precisely model actuarial risk and thus save on premiums. It’s not how large a risk pool is that determines premiums, but rather the distribution of risk within that risk pool.
- curun1r 9y ago
  Partially true, but with size comes negotiating power. It's not like health care or prescriptions in this country have a fixed price. Insurers help set that price and the more lives they represent, the more they can dictate to providers and pharma what a procedure, prescription, etc will cost.
mxuribe 9y ago
Among the numerous neat statements, his last one - "There is no more patient company than Amazon." - is my favorite here.
Thinpad 9y ago
Stop telling such outlandish tales, Stop turning minnows into whales What a piece of bull c* article.. Amazon tax amazon this amazon that and I predicted that. Really you need to get back into your complete senses that there are limits to what can be achieved by any organization. Its for articles like this that paint a rosy picture and contribute to a bubble like stock price. Can you also predict the collapse if that happens. And to you all intelligent readers this is gonna take a long long time to change the current system. For heavens sake don't fall for this guys crap.

284 points by joeyespo 9y ago

Once the infrastructure is in place to automate healthcare delivery they can lobby the government to implement a single payer solution and they will be the only service provider available to deliver the necessary services. It's a virtual gold mine. You heard it here first: death panels as a service. Triage by algorithm would remove one of the most disturbing responsibilities in medicine.

dhimes 9y ago
Your imagination's talent for dystopia is both startling and frightening.
throaway394324 9y ago
And with an advertising/product/consumer influence infrastructure in place they could just arbitrate that indirectly with getting you to consume certain products under certain circumstances to affect certain conditions in both individual and collective behavior towards a desired state.
gaze 9y ago
I’m imagining buying more red meat causing your premiums to rise.
esfandia 9y ago
They could then also force people to eat healthy (i.e., at Whole Foods) or else lose their health coverage! ;)
AnimalMuppet 9y ago
> Triage by algorithm would remove one of the most disturbing responsibilities in medicine. It would shift the responsibility - to the algorithm writers. It doesn't remove it.

thinkingkong 9y ago

I read the original announcement and also this analysis. Is it decided that Amazon will “own” the healthcare provider? As far as I can tell this is still a joint effort by several companies with the same philosophy on how to solve the problem. Presumably if other large companies were aligned they could create their own joint partnerships or discuss the possibility of joining this one.

swalsh 9y ago
It doesn't sound like Amazon would own providers, or try to become a payer. Instead, it becomes an aggregator of providers and payers, gaining negotiation power, which it can leverage to lower costs for healthcare "demand".
amsilprotag 9y ago
If we assume investors are omniscient, there is somewhere between a 3% and 11% chance Amazon Health will commoditize the market. Weigh those numbers a bit upward if you think Amazon can't do it instantaneously. CVS dropped by just over 4 percent by midday, UnitedHealth plunged a whopping 11.5 percent, Express Scripts was off by 3.6 percent, Cigna was down by just under 7 percent and Walgreens fell by 2.6 percent. https://techcrunch.com/2018/01/30/cvs-other-health-stocks-down-upon-amazon-jpmorgan-berkshire-healthcare-co-news/ https://techcrunch.com/2018/01/30/cvs-other-health-stocks-do...
Thriptic 9y ago
One avenue this entity could take is to offer itself as a non-profit third party administrator of a self-funded plan for other companies. Large companies typically put up the money for health insurance anyway combined with employee premiums and then pay a TPA company or health insurer to create the benefit plan and administer it for them. They don't actually buy insurance as a product from a health insurer for their employees. Alternatively, they could pool funds and create an actual insurer. The trouble with Amazon trying to become THE payer or TPA is that insurance is highly variable across the country. There are many different laws governing insurance in each state, and you need to strike business agreements with literally countless small practices, hospital systems, lab service providers, drug companies, outpatient clinics, etc. It would actually be a massive administrative feat for Amazon to provide solid coverage across the US.

aaavl2821 9y ago

The article makes the point that the companies have complementary business competencies that could help them deliver a better healthcare experience (tech, logistics and customer service at amazon; reinsurance at berkshire; capital at JPM), but there is another advantage to these three companies working together: scale. amazon and berkshire are in the top 10 employers, and JPM is in the top 25. while most of the talk around improving healthcare cost / quality in the US centers around technology, value based care, etc, the real economics, and company's strategies, are largely driven by scale. this collaboration is a way to immediately get a strong negotiating position in any discussion and to provide a sizable test bed for various initiatives

rezashirazian 9y ago
If these companies get together and create a not for profit, how can for-profit providers even begin to negotiate with them. Also given the scale of these companies, wouldn't this raise healthcare costs for all others who don't work for one of them?
- gamblor956 9y ago
  Not necessarily. The largest driver of healthcare costs in the US is pharma profits. This venture, combined with the CVS/Aetna merger and the common drug factory venture, should place substantial downward pressure on pharmaceuticals to lower their prices or lose hundreds of millions in business...forever.
  - aaavl2821 9y ago
    The largest driver of cost in the US healthcare system is actually hospital care (30% of spend) while drug costs account for ~10% Not to say that drug prices aren't too high but they are just one piece of the puzzle
    - tdfx 9y ago
      Where could one find more sources for this kind of information?

watertom 9y ago

I think these 3 will no longer provide health insurance for their employees, they are going to create a new more affordable framework and they will allow any other large company to participate. The goal will be keep the cost of insurance the same for the employees, while eliminating the cost for the companies entirely, which is why this will take off. It’s crazy to have employers paying for healthcare, this I believe will be the beginning of the end of employer paid healthcare. It won’t happen overnight but it will go fast because every employer wants to drop that overhead cost.

perseusprime11 9y ago
Interesting idea. Do you know what is the current overhead for Amazon in terms of $$$?
- ihsw2 9y ago
  It's about $19K for employer-provided family-coverage. Considering the three companies have about 1M stuff in total, that represents ~$20B in annual recurring costs. This effort combined with accelerating automation will lead to a much better capital:labor cost ratio (and, depending on who you ask, reduction in labor costs is massively bad for wealth equality).
  - yeukhon 9y ago
    Do you have a source backing on $19K?
    - vadym909 9y ago
      I've seen and paid employer health benefits bills- $15K-$24K is the range depending on the quality of healthplans. About 10-25% of this is what employees pay as their part of the premium normally, the rest is employer paid. Stingier companies cover 75% of the employee cost and 50% of dependents cost.
    - adventured 9y ago

lukateake 9y ago

Am I shadowbanned? https://news.ycombinator.com/item?id=16273567 https://news.ycombinator.com/item?id=16273567

B-Con 9y ago
It would seem not. You got 4 points on the other one.

perseusprime11 9y ago

I look at this as a first step towards understanding the complexity of Healthcare in US with the goal to ultimately make health care more affordable to them and their employees. This may end up being nothing which is why the tone in the announcement was a bit on the “let’s see what happens”. This could also be a cool move by Bezo to bolster up his image as lately the media is hyper focused on tech companies.

discodave 9y ago

The not for profit part and the fact that this entity won't be owned by any of the companies outright provides an interesting path to a single-payer system. 1. Amazon, Berksire, JP Morgan and others create a large "payer" of healthcare. 2. There are no shareholders or other parties interested in making a profit off of this payer because it is a cost center for the big (or small) companies using it. 3. Wait for the current iteration of the Republican party to lose influence and single-payer to gain more traction politically. 4. When politicians are looking for a way to create a single-payer system, Amazon and friends offer to hand over their large payer to join Medicare, Medicaid and VA systems to form one large government payer, effectively nationalizing the healthcare for Amazon and co.

maxerickson 9y ago
Many existing large insurers are non profits. With millions of members. BCBS Michigan isn't the biggest one and has 4.3 million members.

RyanUnited 9y ago

Fuck this and fuck Amazon. That's an overvalued company by magnitudes and just like Enron all of WS knows it they just don't care cause the bond market is in dire straits. Why doesn't anyone mention the ludicrous cost of becoming a doctor or funding FDA pharma research/trials. Dr in the US make twice as much as other advanced countries and the AMA has an iron grip.

deleted 9y ago

[deleted]

akuji1993 9y ago

I will not touch anything with a ten-foot-pole that J.P. Morgan Chase has touched tbh.

chatmasta 9y ago

> insurance operates best at more scale, not less: first and foremost, the larger the pool, the more risk can be spread, as well as obvious efficiency gains in administration. This may be true from the perspective of the insurance companies, but it does not mean that premiums will be lower with a larger risk pool. The global risk pool includes elderly and disabled people whose risk is paid for by healthy people. Smaller risk pools of more homogenous populations can result in lower overall premiums since they do not need to cover the highest risk individuals. For example, a corporation is comprised of employees almost entirely under retirement age, many age 20-30, and in relatively good health. This is why companies are able to offer HMO plans, because by isolating their risk pool they can more precisely model actuarial risk and thus save on premiums. It’s not how large a risk pool is that determines premiums, but rather the distribution of risk within that risk pool.

curun1r 9y ago
Partially true, but with size comes negotiating power. It's not like health care or prescriptions in this country have a fixed price. Insurers help set that price and the more lives they represent, the more they can dictate to providers and pharma what a procedure, prescription, etc will cost.

mxuribe 9y ago

Among the numerous neat statements, his last one - "There is no more patient company than Amazon." - is my favorite here.

Thinpad 9y ago

Stop telling such outlandish tales, Stop turning minnows into whales What a piece of bull c* article.. Amazon tax amazon this amazon that and I predicted that. Really you need to get back into your complete senses that there are limits to what can be achieved by any organization. Its for articles like this that paint a rosy picture and contribute to a bubble like stock price. Can you also predict the collapse if that happens. And to you all intelligent readers this is gonna take a long long time to change the current system. For heavens sake don't fall for this guys crap.