Amazon, Berkshire Hathaway, and JP Morgan Chase announced the formation of a nonprofit healthcare company on Tuesday, to address cost, transparency, and the user experience. The new venture is “free from profit-making incentives and constraints.” In other words, there is now a new player in town whose core business is something other than healthcare. This new player believes there is a better way to do things… and they intend to find it.
The details were limited, but the wave of such an announcement demands a point of view and, in some cases, a planned response. Markets such as Seattle, Washington (home to Amazon) and New York City (the location of the world headquarters for JP Morgan Chase) will be the first to experience the impact of the new company. This won’t be immediate, of course, but it will happen sooner rather than later.
What to Expect from the Three
A typical employer program is designed to keep people engaged in their health and, in turn, keep them healthy. Companies have begun to recognize the value of a healthy and alert workforce. Programs that succeed are convenient, offer relevant and timely information, and increase access to qualified care providers that are convenient to the patient.
If we assume no innovation whatsoever from the new partnership company – which is very unlikely – we can begin to imagine the bare minimum that a collaboration between these three will produce.
They will look at the anonymized data, determining the number of unnecessary office and ER visits. These can be significantly reduced with office clinics and telehealth solutions. They may look at their drug spend, leveraging Amazon’s newly acquired licenses to stand up a PBM for their employees. Chronic disease management, such as diabetes, could see specialized programs that leverage IoT and Amazon logistics to ensure adherence to a care plan.
Amazon has the technology and product credentials, but the other two companies are no slouches. JP Morgan, for instance, has led with innovations in their field. In fact, I believe that their high-tech and high-touch approach with personal bankers contributes to a significant growth in their assets.
We could see appointment scheduling for their clinic through Alexa as well as daily health reminders, among other things. I would venture a guess that the new company will build an app that is designed to the needs of the consumer/patient. (Whereas most apps to-date have been designed around the system or physician, because that was the only source of meaningful revenue for a product company.)
What might a health system’s response be to this and other announcements, such as CVS/Aetna?
Consumer-Driven Healthcare is Upon Us
When I got into healthcare in 2011, we mapped out a potential future. We took the time to imagine what might lie ahead, including what that might mean for our technological road map.
The movements across the top timeline indicate a change in focus and, therefore, the way the healthcare system will provide services to the market.
These two announcements mean it’s time to ensure that your own strategies align with the emerging consumer in healthcare.
Do you have the data and analytical capabilities? How about the digital touch points with your consumer? How often do you interact with the healthcare consumer and with what percentage of them have you established an ongoing relationship? Are your products relevant to the healthcare consumer? Finally, has your culture accepted the change and are they prepared for even more change?
A motivated consumer at scale can change a market. This particular announcement may not impact your market, however.
What if the largest employers in your market banded together to form a new nonprofit with similar goals? How would your system fare if you lost any serious volume of clinic and ER visits? What if they decided to do a narrow network and sign with Mayo, Geisinger, or MD Anderson for certain conditions? Are you connected to the largest employers in your region? Do we know what they are looking for?
Those questions are stressful. Let’s look at how a health system can utilize these announcements to prepare for the future.
Catalyst for Change
The test of the culture is whether they are wrestling with the right questions.
How do we make money? This is the type of question that leads to poor results, simply due to poor focus. What is our mission, vision, and our ‘Why,’ in Simon Sinek’s terms? This is the type of question you want to be asking.
Good questions lead to good outcomes.
Announcements such as the Amazon/Berkshire/JP Morgan partnership provide an excellent backdrop for a conversation around the impact of the emerging healthcare consumer in your market. This is a discussion that centers around the consumer. Do we know their needs and desires?
If you are unable to have the conversation because of indifference or skepticism, then the culture needs a jolt. If you are able to not only have the conversation but begin to ideate ways to engage and serve the healthcare consumer, you are ready for what comes next.
Expand Your Perspective
A great place to start with each of these announcements is to identify and sit down with the largest employers in your region. Engage them as co-creators in solutions that serve their employees. Create value. Improve access, reduce costs, and provide the convenience and transparency they are craving.
These qualities will serve you well. Take the time to develop this organizational muscle. If you’re in Seattle or New York, you may already have your connections reaching into this new entity.
Learn From Others
Partnerships between large employers and health systems are not new, but they have had varying degrees of success. Learn from the leaders as to what it takes to be successful. Learn also from the struggles of your peers.
What leads to success in this arena? Much has been written about Presbyterian’s partnership with Intel, Adventist, and Whole Foods, as well as Geisinger and several employers. Modern Healthcare has a good article about this here.
Digital Transformation as an Imperative, Not a Buzzword
Digital transformation is rethinking the way you conduct business, based on digital technologies through a consumer-oriented lens. While a new website or mobile app is part of digital transformation, it is not digital transformation in and of itself.
Digital transformation is a misnomer, of course; it is actually business transformation brought about by digital technologies. The premise is determining how – given the data we now have available and could collect, coupled with new digital touch points with the consumer – could we fundamentally change the user experience in a differentiated and compelling way?
One thing is for sure: Amazon, JP Morgan, and Berkshire (think Geico digital experience) understand the power of digital transformation. And they are bringing that experience to healthcare.
The only certain wrong move for health systems is to ignore the growing movement of the healthcare consumer.