Amazon, Berkshire Hathaway and JP Morgan Chase announced they are creating a separate non-profit company to address the healthcare cost and quality problems their employees face. This new company is only in the planning stages and hasn’t named its CEO yet – but it may have a huge impact on the nation’s health insurance industry.
Implications for Employee Benefits Professionals
All three companies are run by very smart CEOs. Before making this decision, let’s assume they did their homework and they have a complete (or almost complete) understanding of the healthcare cost and quality problems facing their employee health plans.
Their conclusion is that their current plan administrators are not delivering the results they need. Moreover… no plan administrator is capable of delivering the results they need. If one particular insurance carrier was able to ‘deliver the goods,’ these companies would have switched to them.
This begs the question… Why are insurance carriers incapable of meeting their needs?
- Expectations: These three organizations have found it unacceptable to have cost inflation in healthcare, a wide range of healthcare quality, a lack of transparency and a poor healthcare experience for their employees. They have said, “Enough.”
- People as Their Greatest Resource: These three organizations understand their employees are what make their companies great. It’s not a machine, a product or a patent. It’s the people. If their businesses are going to succeed, they need take care of their greatest resource.
- Execution: NONE of the healthcare problems these companies face are new. Healthcare cost inflation, quality variability, lack of transparency and poor healthcare experience are NOT NEW. Richard Nixon even tried to “fix” healthcare in the 1970s. However, there has been little successful execution to fix these problems. Amazon, Berkshire Hathaway and JP Morgan Chase all have a long track record of action. They demand results and have what it takes to achieve them.
Will these companies face tremendous challenges in healthcare and health insurance? Yes.
Will they make mistakes and have setbacks? Yes.
Will it take lot of money and long time to achieve results? Yes.
As smart business people, they have weighed the risks and decided there is more risk associated with the status quo than attempting to change healthcare.
How is your business different? Do you have lower expectations? Are people not your greatest resource? Are you poor at executing against goals? Maybe, but probably not.
Carpe Diem. The journey of a thousand miles begins with one step.
To learn how Compass helps employers navigate the complex healthcare landscape and help employees make better healthcare decisions, please visit www.compassphs.com.