Changing the Paradigm of American Health Care

The theme of this issue of Critical Values, “Effecting Change in Health Care,” comes at a particularly opportune time in light of recent news headlines. Earlier this year, three of our nation’s most influential business leaders—Jeff Bezos, CEO of Amazon, Jaime Dimon, CEO of JPMorgan Chase, and Warren Buffett, Chairman of Berkshire Hathaway—announced they would collaborate to form a new and financially stable model for providing healthcare coverage for the nearly 1.2 million people that they collectively employ. In this announcement, they explained their vision that this entity would be independently operated and “free of profit-making incentives and constraints,” and would be designed to provide “simplified, high-quality, and transparent” healthcare services to their employees at economical prices. Mr. Buffett said in a statement that, while they did not launch this endeavor with a particular solution in mind, they “do not accept that the current state is inevitable.” He stated that he and the others involved “share the belief that putting our collective resources behind the country’s best talent can, in time, check the rise in healthcare costs while concurrently enhancing patient satisfaction and outcomes.” This new cooperative enterprise is currently in the formative stages.

The initial press releases provided no specific details, but did indicate that they were searching for the right person to head this new joint venture that could bring a fresh approach to the problems affecting our healthcare insurance coverage system. On June 20, this group announced that, beginning July 9, Dr. Atul Gawande, a surgeon at the Brigham and Women’s Hospital, Professor of Public Health at Harvard Medical School, and Executive Director of Ariadne Labs in Boston would be the CEO for this new start-up company that would be headquartered in the Boston area. Mr. Buffett released a statement iterating that their goal had been to identify someone with “an expert’s knowledge, a beginner’s mind, and a long-term orientation.”

Those of us who work in the trenches of our medical system recognize on a daily basis that there are problems with the way health care is delivered in our nation. The costs are far too high and the quality of outcomes is too low compared with other developed nations around the world. Too many people do not have access to insurance coverage and are forced to rely on visits to emergency departments where they cannot be turned away. There are also too many dissatisfied patients, whose attempts to get answers for their health problems and obtain appropriate treatment are not successful. Patients themselves are at least partially to blame for some of their problems. Tobacco and alcohol abuse, use of illicit drugs, obesity, and a variety of other chronic conditions for which patients refuse to adopt appropriate lifestyle changes that could help improve their health, all combine to increase dissatisfaction and drive up the cost of care. Effecting change will require a major adjustment in the mindset of patients, providers, insurers, and the pharmaceutical industry. Major business leaders with deep pockets and fresh ideas entering this space could be just the disruption our industry has needed.

With regard to changing the attitudes of health insurance companies, Berkshire Hathaway owns several insurance companies and has significant experience in managing risk. Perhaps part of the strategy of this new healthcare company would be to leverage that capability to implement products tailored to a new healthcare delivery model.

In the pharmaceutical space, it was announced on June 28 that Amazon had purchased PillPack, an online pharmacy company that provides individualized dose-packaged prescription medications to patients in all 50 states. In addition, Amazon already offers Basic Care, its own over-the-counter medication service, as well as a wide variety of medical supplies, through its convenient online ordering system and rapid-delivery model.

As large employers, these companies have the ability to require that employees become more responsible for maintaining their health through lifestyle modifications. Those employees who do not abstain from tobacco use, maintain a healthy body mass, or exercise on a regular basis, would likely pay significantly higher premiums to participate in the company plan or be forced to find coverage elsewhere.

It appears that this new venture will have the ability to influence three of the above-mentioned forces in the healthcare equation. The only remaining group that will need to change is the medical providers. This new venture will have the financial resources necessary to hire its own medical workforce. However, that may not be necessary. Some hospital systems and medical providers might welcome the opportunity to explore novel approaches to provide care for this group of relatively young and healthy patients, who are motivated to participate in their care and live a healthy lifestyle.

While much still remains unknown about how this new venture will ultimately function, these three corporations are positioning themselves to provide cost-efficient healthcare coverage for their employees. The laboratory community can assist with this initiative by continuing to promote the Choosing Wisely initiatives that seek to inform both patients and physicians on the appropriate utilization of laboratory tests and services. This list will expand in the coming years as the American Society for Clinical Pathology and other participating medical specialty societies continue to identify and curtail medical practices and procedures that do little to improve health and serve only to drive up costs. If we fail to deal effectively with this issue, ventures such as the one currently being organized by Bezos, Buffett, and Dimon will likely solve it without us.

Change in health care is now upon us. Among other changes, the emergence of new ventures such as this have the potential to dramatically alter how laboratory services are provided in the future. I suggest that it is time that we all roll up our sleeves and get serious about identifying and eliminating wasteful practices in our own institutions. It is critical that we demonstrate our profession’s commitment to improve outcomes and reduce cost.