What the Amazon, JPMorgan, Berkshire partnership means for healthcare: 35 executives respond

When Amazon, JPMorgan Chase & Co. and Berkshire Hathaway launched their partnership in the healthcare space, they left more questions than answers about their new venture. The announcement shared few details on how the companies would partner, but ultimately shared the goal of providing high-quality, lower-cost healthcare to employees and their families.

All three companies are disruptors in their industries, but have little experience in healthcare. Here, 35 executives from across the healthcare industry share their reaction to the announcement and predictions for the future.

Note: Responses have been edited for length and clarity.

Question: What does this partnership mean for the healthcare industry?

Chuck Stokes. President and CEO of Memorial Hermann (Houston): "Today's announcement is precisely why health systems across the country, including Memorial Hermann, have been innovating from within. Our industry has a lot to learn from these three powerhouse institutions that have transformed their consumer experiences. Through their expertise, I firmly believe that our industry will accelerate the journey to become more affordable and convenient for everyone. Here in Houston, we understand the healthcare needs of our community better than anyone else and have launched several groundbreaking solutions to make healthcare more affordable and accessible to our neighbors."

Damian Becker. Manager of Public Relations at South Nassau Communities Hospital (Oceanside, N.Y.): "Their venture into the healthcare industry means one thing to me: disruption, with a singular focus on growth from the get-go. Accounting for the core strengths, roster of services and market share dominance of each organization and how they will innovate collaboratively, it is imperative as a healthcare organization to conceptualize and anticipate what they will bring to market as not just a national entity, but also a global entity that will either compete directly with or complement the services that your organization provides and/or specializes in. For example, health and medical care services delivered to the patients/customers wherever they are and whenever they need it, whether at the home or on the road or at work, through digital, delivery, informational and direct care services, at a lower cost and simplified payment model."

John Driscoll. CEO of CareCentrix (Hartford, Conn.): "Anyone with a high-cost, high-margin healthcare business should be scared. But healthcare is complicated, and I believe the most effective path for this dream team of disruptors is to share their goal — to provide better care at a lower cost to patients — with industry incumbents. Bending the cost curve and improving outcomes is going to require a team effort."

Michael Bittman. Partner at Broad and Cassel (Orlando, Fla.): "All industries are being disrupted to some extent by the new digital economy. It appears as if this will be one of the best-funded efforts to disrupt the traditional employer-sponsored health plan model. That said, it's important to remember you can't deliver healthcare without hospitals and physicians. The new model may involve groups of employers contracting directly with healthcare providers to decrease cost and enhance quality.

"What Amazon, JPMorgan and Berkshire Hathaway have presented could be a new national model. With their combined resources, technology and foresight, they could reduce reliance on insurers and avoid some of the related costs. It could show a new way for employers to provide good, affordable coverage, and increase wages with the savings."

Julia Cohen. Vice President of Commercial for Clarify Health Solutions (San Francisco): "Exciting announcements must become concrete information. Today, these companies say they'll focus on achieving the triple aim, leveraging technology, prioritizing their employees and their families — and without a profit imperative. Perhaps they'll create innovative enabling technologies to streamline care delivery and administrative bloat. Or, perhaps they will seek to create a more tech-enabled version of an integrated delivery network like Kaiser. Such business models are inherently challenging to scale in healthcare, and the business of healthcare providers and payers is complex. Plus, healthcare is inherently a risk-management culture that runs counter to tech culture, never mind regulation. Alternatively, perhaps the companies will pursue direct contracting with providers. Then they would be among many employers already bypassing insurers, such as Boeing, Walmart, GE and Lowe's.

"On the payer and provider side, I see M&A activity as being rationally driven for growth, rather than reactive to the moves of industry outsiders. I expect any transformative landscape changes to be driven by policy before business disruption. However, industry outsiders will increase competition and innovation, which will turn up the heat on industry incumbents. This will benefit everyone, as technology will increasingly infiltrate healthcare and modernize our approach. Partnering with our government, all players must collaborate to legislate and innovate in healthcare together."

Q: How should hospitals, health systems and other healthcare organizations respond?

Mike Long. Chairman and CEO of Lumeris (St. Louis): "The Amazon/Berkshire Hathaway/JPMorgan announcement is just the most recent, but powerful 'shot across the bow' of the healthcare industry. Corporate, government and individual buyers of healthcare want value, and they want it now. The current fee-for-service system has failed to deliver on promises of higher quality, lower costs, better service and easy access. The days of large annual increases in healthcare costs are over, and in a zero-sum-game world, where the market is capping the amount of dollars available for healthcare, only those that can deliver value will survive."

Gurpreet Singh. U.S. Partner and Health Services Sector Leader of PwC (New York City): "Many companies are trying to figure out whether they should be part of a larger 'greater good' organization as a result of this partnership; they're looking at how large institutions can participate and create better access to care as well as better prices. What this partnership doesn't do is affect the cost of care; what it does do is focus on providing a better understanding of patient populations and a better way to management risk across that population, and potentially narrow networks within the payer landscape."

Lynn Carroll. Chief of Healthcare Strategy & Operations of HSBlox (Atlanta): "With 2.4 million employees and their associated families, the JPMorgan-Amazon-Berkshire Hathaway partnership has as many covered lives as a top 10 U.S. insurer. Additionally, the partnership represents the aggregation of hundreds of millions of consumers in a connected ecosystem of financial and retail account holders, and a vast aggregation of data. Amazon has a track record of streamlining administrative processes to deliver business and consumer experiences that are easy to navigate, which is what patients, healthcare service providers and employers are demanding. Starting with their own employees, the partnership can combine financial, social and medical data to identify opportunities for improved care delivery and administrative cost reduction. By applying past successes in digital supply chain management, consumer retail experience and cloud computing, the partnership can connect healthcare stakeholders for real-time data aggregation and sharing at an unprecedented level, then quickly scale it both domestically and globally."

Jon Hernandez. CEO of PeakMed (Englewood, Colo.): "Our country strongly needs healthcare innovation. The team of Amazon, JPMorgan and Berkshire Hathaway is right to be looking at this as a way to not only save money and provide good healthcare, but also as an employee retention tool. The direct primary care model is one worth considering both as a cost-saving solution for employers by reducing prescription costs, expensive doctor appointments, and unnecessary ER and urgent care visits, but also one that improves health outcomes for employees. Its proactive approach with unequaled access to healthcare makes for a healthier work environment and strong employee productivity in the long run."

Susan Taylor. Vice President and Global General Manager of Health Care and Life Sciences at Pegasystems (Cambridge, Mass.): "This announcement also puts a fine point on a consumer-centric disruption that is taking place on the clinical/care delivery side of the house. While slow in coming, the recent emphasis on the social determinants of health has shed light on the reality of healthcare: Most healthcare happens outside a clinical setting and is not tracked in the EMR. Traditional technology vendors are rushing to integrate consumer health information into a clinical picture, but that's retrofitting most health information and decision-making into the model supporting the smallest, specialized component. Does that make sense? Leading health systems are taking a fresh look at their technology, staffing and approach to delivering a consumer experience. They are leveraging the same kinds of technology as Amazon to bring insights and value to the consumer experience. Whether shopping for care, scheduling care or managing their own care, these companies are using consumer experience technology as their primary engagement platform, not the EMR."

Ken Kaufman. Chair of Kaufman Hall (Skokie, Ill.): "The goal of the Amazon, JPMorgan and Berkshire Hathaway initiative is very clear: to use technology and system redesign to reduce costs. It's too early to tell whether they will succeed, but given their size and track record, they shouldn’t be underestimated."

Q: How do you think the partnership will develop?

Rosemarie Day. President of Day Health Strategies (Somerville, Mass.) and former COO of MassHealth (Boston): "First, it is important to put this partnership into perspective; these are big names and big companies, but this partnership will only cover the employees of these three businesses, which is a very small portion of the insured population — less than 1 percent. Because these are high-clout businesses and everyone is looking for a silver bullet for healthcare costs, this partnership is getting a lot of attention. However, in terms of actually moving the needle on overall healthcare cost, they may be able to do some innovative things, but they won't likely be hugely impactful in terms of healthcare costs at this stage.

"An overarching potential benefit of this partnership will be the talent that this partnership can attract. They will likely be able to bring in some of the best and brightest minds to propel technology further and develop better tools for their employees, including an employee choice/private exchange model, decision support tools and data transparency. Additionally, they could bring in people that have done innovative things in the clinical space.
"The bottom line is that this new partnership has the potential to introduce new innovative technology solutions that can help make employees smarter consumers and work with providers to streamline processes; however, this new partnership will not fundamentally change the health cost structure and the problem of high-cost healthcare."

Jamey Edwards. CEO of Cloudbreak (Los Angeles): "Hopefully this is more than just pooling employees for pricing power, but rather taking a fundamental look at a broken system and driving impactful change. I am not sure the announcement should have everyone in the industry on their heels, but we all should be watching their progress closely to figure out where the collaboration opportunities exist and in what form their efforts will take place. Will they be forming their own insurance company? Does that lead to developing their own integrated delivery system? Will they take advantage of all of their patient data to drive new population health models? As it's still in the concept stage, our imaginations can run wild and their initial concept as planned may be totally different by the time implementation comes around."

Dave Lareau. CEO of Medicomp Systems (Chantilly, Va.): "Berkshire Hathaway has deep expertise in risk management. In the upcoming era of outcomes-based reimbursement and risk sharing, it seems to be a natural fit for Amazon’s data and process capabilities. JPMorgan Chase has the financial resources and possibly patient investment capital outlook to see this project through to a place of real innovation, including the possibility of underwriting self-insurance in coordination with Berkshire Hathaway. Also, these three organizations combined have more than a million employees and, with their spouses, partners and children, have a potential group of more than 2 million people for whom they may be providing and managing care. This will provide a great foundation for testing and developing their platforms for care delivery."

Michael Hough. Executive Vice President and U.S. Founder of Advance Medical (Westwood, Mass.): "Our hope is that [Amazon, JPMorgan and Berkshire Hathaway] find that efficiency first and foremost comes from delivering the right treatment for the right diagnosis. Everything else — site of care, risk shifting, etc. — is a sideshow. If our caregivers had more time with patients, the overall quality improvement will drive down the cost. They also know how measurement is done, which is a perennial issue in healthcare. Not having a readmission or not having an infection is not how you measure a good outcome. I wish them the best of luck in shaking up our system."

Ted Chan. Founder and CEO of CareDash (Cambridge, Mass.): "These companies will be able to use their scale and leverage — 1.2 million combined employees — to get something off the ground from a purchasing perspective. Value-based care has been an ongoing transition across the health system, with insurers moving to the model. But insurers have always brought a ton of overhead and a cautious approach. This new venture should rapidly accelerate movement to this model, creating competition for services across the board. Hospitals and health systems should be ready to align tightly to bundled purchasing and capitated care models, with a focus on payer value."

Carolyn Long Engelhard. Director of the Health Policy Program at the University of Virginia School of Medicine (Charlottesville): "Amazon, Berkshire Hathaway and JPMorgan have yet to reveal what their new venture will be, but it no doubt will focus on engaging their employees using disruptive technologies like telehealth and phone-based applications to monitor health status and risks. Because of the leverage it can bring to the healthcare purchasing market, because it represents so many employees, hospitals, clinicians and health plans that serve them may see downward pricing pressure, particularly if other employees/employers are able to 'buy in' and join the coalition in the future."

Matthew Fisher. Partner and Chair of the Health Law Group at Mirick O'Connell (Worcester, Mass.): "Aside from a rush to respond and the corresponding market impact, it is very difficult to determine how healthcare companies should react. Any statements will be mere speculation until actual details are provided by the new proposed joint venturers. That being said, the announcement suggests efforts will be focused on controlling costs solely within the three organizations, which sounds no different than any third-party administrator or other benefits overseer. Further, impacting the three companies under one umbrella could have a negative ripple effect on others. For one party to do better, someone else likely needs to do worse."

Phyllis Whiteley. Partner at Wildcat Venture Partners (San Mateo, Calif.): "We have already started to see this in the self-insured employer market, which is desperately trying to save costs and improve the healthcare experience for their patients. This administrative burden is still high, and technology should help with that. Having big technical powerhouses and thought leaders solve these problems is great. One only has to look at what Walmart and Lowe's have done with Centers of Excellence to make way for companies like Carrum. The traditional third-party payers still focus on an administrative model and are less willing to invest in technologies. We still have a complicated regulatory and reimbursement challenge and an FDA that is slow to understand how to use new technologies. Initial changes may first be seen on reducing administrative costs and the care experience."

Timothy Hoff. D'Amore-McKim School of Business Professor of Management, Healthcare Systems and Health Policy at Northeastern University (Boston): "Healthcare is a human-to-human endeavor for the most part, despite how enamored some in the industry are with technology like EHR and artificial intelligence. What I have found in my own research is that patients want to relate on a personal level with those providing them care; they want the personal touch in many aspects of their care; and they want to experience high levels of interpersonal trust and things like empathy and mutual respect — things individual persons and not entire companies can provide best. Bringing in a retail-oriented model of buying and selling, which these three companies excel at, will run up against this fact that healthcare is a highly relational business, one in which the relationships forged are between professionals and patients, not big branded institutions and what they view as faceless consumers of their products and services."

Dennis Leonard. President of Delta Dental of Massachusetts (Boston): "It is great to see global organizations like these three transition from being healthcare consumers to healthcare incubators. The future of our health as individuals and as a nation relies on creative investment and ideas to tackle the complexities of our healthcare systems.

"Today, there is no single pathway to health. Companies like Amazon will bring a fresh perspective to tackling this issue for their employees. But we have to recognize that their solutions won't immediately impact everyone. Given the cloud of uncertainty that surrounds the ACA, many small businesses and individuals are left to wrestle with rising costs and an unknown healthcare future. As healthcare leaders, we can't sit back and wait for global giants like Amazon. We must continue to make changes from within that lead us to person-centered health.

"Nowhere is this need more relevant than in oral healthcare, which significantly impacts our overall health and yet is often left out of conversations like this."

Scott McFarland. President of HealthBI (Scottsdale, Ariz.): "Kudos to any venture that is attempting to rein in our nation's exorbitant healthcare bill, provided it doesn't punish patients or providers. And the only way to avoid that is — you guessed it — value-based care. So I would certainly hope that this partnership's objectives include closing care gaps and identifying patients — or in this case, employees — who are most at risk of a severe health event, and then see they get the appropriate care in time to prevent an expensive hospitalization."

Venkat Mocherla. Director of Business Development at Qventus (Los Altos, Calif.): "While it's promising to see Berkshire Hathaway, a company that understands the dynamics of the insurance markets; JPMorgan, a company that understands ecosystems at scale; and Amazon, a company that knows how to harness and analyze data, come together to see if they can fundamentally change how healthcare works in America, people should expect it to be several years before anything they do meaningfully transforms how our system works. Healthcare is always a long-term play. That said, these three companies are also known for their vision and long-term strategy. It's going to be exciting to watch what they do."

Calvin Knowlton. CEO and Co-Founder of Tabula Rasa HealthCare (Moorestown, N.J.): "Through this partnership, these three companies will empower their employees in accessing and managing their care, which must include safe and effective management of their medications. Healthcare costs caused by improper and unnecessary use of medicines in the U.S. have exceeded $600 billion. Moreover, preventable adverse drug events, including falls and ER visits, are a leading contributor to ballooning healthcare costs, and ADEs are the fourth leading cause of death in the U.S. It is critical that progressive approaches — like this new partnership — make safer and better prescribing in America the utmost priority."

Q: What types of partnerships and mergers do you expect to see in the future?

Steve Auerbach. CEO of Alegeus (Waltham, Mass.): "Continued mergers such as that of Aetna and CVS will create a convergence of funding, delivery and coverage that result in unprecedented integration and simplification within the healthcare industry. Better technology and more ways to buy will bring about new support capabilities, a broader cost structure and a greater number of care delivery options, as well as provide consumers with better access to decision-making information with the goal of driving down costs and quality up."

Jason Fortin. Senior Advisor of Impact Advisors (Naperville, Ill.): "I don’t think it would be unreasonable to expect similar types of announcements in the coming year, although maybe not quite on the same scale. I think we are seeing a trend of large, influential companies — whether it is employers, big tech firms or providers themselves — rejecting conventional approaches and trying to look for new ways to address long-standing problems in healthcare. Last week it was Apple and a number of prestigious provider organizations announcing an effort aimed at changing the way patients access their health information. A week earlier, four large health systems announced plans to create a not-for-profit generic drug company to try and make generic drugs more available and affordable. Not every one of these announcements will necessarily result in disruption, but I think it is clear that key stakeholders are not going to be idle and wait for change to happen."

Artem Petakov, Co-Founder of Noom (New York City): "[The partnership] means that there will be a tremendous amount of pressure on traditional health insurance companies to innovate. These three partners aren't going to reinvent the wheel — I suspect they'll invent a whole new form of transportation. However, insurance companies aren't particularly good at innovation, so I believe it will lead them to panic and look for other companies to partner with. Likely there will be vertical integration, much as we saw with CVS and Aetna. I could see Amazon purchasing an insurance company or another retail-insurance merger. Also, I believe that the insurance companies will want to bring expertise on digital therapeutics and telehealth in-house, so I expect we'll see a lot of M&A activity in that area as well."

Bob Waddell. Vice President of hippo (Leawood, Kan.): "Hopefully, this will drive other like-minded companies to consider collaboration, maybe on a smaller scale, in an effort to get a piece of the pie. The blend of finance, insurance and technology is one way to approach this challenge, but the addition and innovation of other sectors will only bolster the odds of improving the current state of healthcare in the U.S. This is already happening on a daily basis. But when you have the likes of Amazon, Berkshire Hathaway and JPMorgan coming to the table, it adds a whole new dimension and hopefully pushes others to step up their game or risk being left behind."

Nick Vennaro. Co-Founder of Capto Consulting (Denver): "Healthcare providers stand to benefit tremendously if the new partnership can truly offer transparency into the cost of care — a problem the complexity of the healthcare industry has struggled to solve as a whole. Healthcare technology companies also have an opportunity to create or modify their products to directly integrate into a newly created technology platform, presumably using Amazon Web Services, and further advance data collection for the purpose of improved patient experience and outcomes. There is also a major opportunity for entrepreneurs to get involved and think of solutions that will benefit this triumvirate to exploit partnership opportunities."

Q: How are you responding to the news? Are you making any changes to your business model?

Ben Evans. Co-Founder and CEO of OurHealth (Indianapolis): "I'm not surprised that Amazon, Berkshire Hathaway and JPMorgan Chase are entering the healthcare market as they face the same challenges as employers of all sizes when it comes to healthcare. The U.S. spends way too much on healthcare and gets way too little in return. OurHealth's goal is to save employers $1 billion on healthcare costs and actually make people healthier at the same time. We’ve been making inroads on both fronts since 2009. Scale matters in this business, so it will be interesting to find out where specifically they’re going to focus their efforts."

Rick Halton. Vice President of Marketing and Product at Lumeon (Boston): "We see an opportunity for this collaboration to enter into algorithmic lifestyle coaching, helping detect and prevent illness. This can be done through use of thorough employee health risk assessments, smart algorithms and continuous monitoring using wearables, adapting coaching programs to the preferences and motivations of each employee. By nipping health problems in the bud, it would be possible for this collaboration to significantly reduce the cost of care.

"Furthermore, it is not uncommon for disruptors in one industry to make waves in another (think Elon Musk and automotive to space innovation), and Amazon, Berkshire Hathaway and JPMorgan Chase are certainly influential and innovative in their respective industries. With that comes great excitement and potential.

"Amazon, for example, has taken a global leadership role in technology and applied it to reduce labor costs, introducing everything from thousands of robots in their warehouses, to eliminating checkouts in the Amazon Go stores, while designing end-to-end digital shopping experience. Just imagine if these skills are applied to the labor-intensive patient journey. Today, employees and patients too often find themselves having to piecemeal together their own care and deal with a fragmented, heavy-handed healthcare system. In contrast, with the help of smart technology platforms, Amazon could deliver a unified and fluid patient experience that takes advantage of modern care automation techniques to consistently deliver the best outcomes at lowest possible cost."

Robert Holland, MD. Medical Director and Emergency Physician at The Colony (Texas) ER Hospital: "Healthcare providers will likely need to reprioritize their reimbursement strategies when it comes to accurate and convenient care. There is more and more consumer demand for access to healthcare options that suit their lifestyle. There will likely be even more privatization of healthcare as more and more companies work together to take better overall care of their employees.”

Kevin Hrusovsky. Founder of Powering Precision Health Summit and CEO of Quanterix (Lexington, Mass.): "The news that Amazon, JPMorgan and Berkshire Hathaway are looking at this issue is yet another example of how we need to think differently when it comes to solving the healthcare challenges we face today. To make the largest positive impact on the way we deliver healthcare to patients, our industry needs to focus on encouraging collaboration among innovators, whether they be medical professionals, researchers, advocates, visionaries and everyone in between."

Chris Thurin. Regional Managing Principal of OneDigital (Atlanta): “I’m really encouraged by the news. You’re looking at arguably three of the best-known U.S. business leaders coming together to take on the world’s most expensive healthcare system and there’s the potential to really disrupt the status quo, reduce the cost burden on employers and improve satisfaction. This could be the catalyst that scares current stakeholders enough to make meaningful changes. For instance, insurance carriers may be forced to look inward to find new ways of adding value in the healthcare system. As payors they’re part of the problem, but insurers are uniquely positioned to innovate and improve the current system if they perceive an imminent threat. Employers no matter their size will embrace improved healthcare models or it will be harder to them to compete down the road."

Michael Hunn. Founder and President of Hunn Group (Orange County, Calif.): "This early-on announcement of a plan that is not yet fully formed is partly intended to get the ball rolling in search of top leadership to implement the strategy and tactics. With the right leadership and financial backing, this could actually work and begin to turn a cost reduction tide in the employer-sponsored health insurance space. If they are successful in direct provider contracting and managing pharmacy costs, these partners could potentially create a sustainable working model. Time will tell. There is no current large-scale model that has produced meaningful results. Healthcare is extremely complex and is not a 'retail' business today, but who knows? We could all be signing up for 'Berkmorgazon!'"


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