What former Apple CEO John Sculley had to say about the Amazon-JPMorgan-Berkshire Hathaway collaboration

Healthcare's newest disruptor — the Amazon, JPMorgan Chase and Berkshire Hathaway collaboration — has everyone in the industry abuzz

The much-anticipated announcement of Amazon's entrance to the healthcare industry came about a week after Apple introduced health records on the latest update of its Health app and the same day Epic expanded its interoperability capabilities.

Details of the collaboration have been vague, but center around leveraging technology to drive down healthcare costs for their U.S. employees. Some healthcare leaders are excited about what will happen next in the trio's efforts, while others are concerned about the healthcare's newest competitor.

Former Apple CEO and current RxAdvance CMO John Sculley shared his thoughts on the deal with Becker's Hospital Review. Here are five highlights.

1. The companies are undertaking a years-old problem that the government has long failed to solve.

"Since the 2016 election, Congress has been obsessed with the ideological question of whether to repair or replace Obamacare. Either way, a political decision for this question, while important, will not reduce the cost of the U.S. healthcare system enough to make it affordable [for patients] at a sustainable cost [for the country]," he says.

2. "Finally, corporate America is stepping in with the goal to shift focus to real innovation possibilities that can transform the currently unsustainable cost of the US healthcare system," Mr. Sculley says.

He highlights that Berkshire Hathaway CEO Warren Buffet is an insurance expert, Amazon CEO Jeff Bezos mastered cloud platform productivity and JP Morgan Chase CEO Jamie Dimon knows how to finance large-scale, disruptive innovation. These three "most respected corporate America CEOs'" combined expertise can tackle the complex system that is U.S. healthcare.

3. Mr. Sculley adds that chronically ill patients are incredibly expensive to care for, noting that nearly 2 percent of the U.S. population accounts for 40 percent of the entire $3.4 trillion each year spent on healthcare. Citing a McKinsey & Co. estimate, he says there is about $900 billion in waste, fraud, abuse, misuse and avoidable medical costs which could be resolved with approaches other sectors take — using cloud-based platforms, smart automation and actionable analytics.

"[The] healthcare industry has been slower than other industries to encourage disruption because this industry is so complex, so highly regulated, and much of its most important information technology is several decades old."

4. Mr. Sculley believes the trio has the "power and talent" to fix the high-cost problem in healthcare, but he says it won't be easy.

"First, they have to understand the complex healthcare ecosystem, build or acquire disruptive enterprise platforms to run entire health plan operations so that you don't have huge nightmare of integrating many vendor systems," he says. "Unfortunately, there aren't any such platforms in the market, hence they cannot acquire — at least that's the case today."

5. Amazon, JPMorgan and Berkshire Hathaway set a goal for their company to save 20 percent of their health spend for their own employees, even though health plans are not making those profits.

"[Health plans] make only 3 to 5 percent profits. But there is 20 to 25 percent wastage there," he says. "They don't know how to cut the wastage due to their antiquated technology that is still widely prevalent in the healthcare industry."

Mr. Sculley recommends health plans — and the trio's new company — begin by modernizing their operations with enterprise process automation and medical intelligence, as well as value-based care models.

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