An editorial by Chris Thurin
According to the Centers for Medicare and Medicaid Services (CMS), U.S. health care spending is projected to reach nearly $5.5 trillion by 2025. Let that sink in.
That’s why, when Amazon, JPMorgan Chase & Co. and Berkshire Hathaway announced they are partnering “to address health care for their U.S. employees” by creating “technology solutions,” it made the industry – and the stock market – collectively pause. Many experts applauded the move overall, but pointed out it was flimsy on details. Then, in a recent interview, Warren Buffet said the purpose of the venture is to grow and become "something that other people can pick up on." And that is exactly why I think this partnership could be successful in disrupting the current health care industry.
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The health care industry is notoriously slow to change and this partnership might be a catalyst for other companies and stakeholders, encouraging them to start innovating faster. The venture has an opportunity to be a perfect internal incubator to build, test and deploy a better model of health care to the general public. It can open the door to sharing ideas and data that smaller companies can leverage; smaller companies will also be able to learn from any mistakes this partnership will inevitably make.
Frustration leads to technology disruption
The message this partnership sends is that, arguably, some of the brightest minds in business are frustrated, ready to disrupt the status quo, and have given up on the traditional ways in which employers and the government have tried to reduce health care costs. Amazon, Berkshire Hathaway and JPMorgan have come together to say, "You haven’t gotten it right for decades; there are still a lot of problems. But, we can offer a fresh perspective." The venture has the size, skill and scope to back up this statement, and make a disruption in the health care industry actually possible.
Technology and innovation are what’s needed to help with both the economic and care inefficiencies in the current health care system. This is where Amazon is a perfect player for the partnership, because it has already proven that it understands how to leverage technology to disrupt industries. In this new venture, Amazon’s strong infrastructure and experience with artificial intelligence, machine learning and big data will likely all be leveraged to spur the “new technology innovations” the companies jointly announced, like information-sharing platforms that “can increase the efficiency of health care delivery.”