Summary: Amazon just entered the medical provider business, buying a large medical firm. Their goal: to make money by finding insured, well-off, and inexpensive patients. Itâs a business model, to maximize profits. What we need is a health improvement model, to ⊠maximize health!
Amazonâs acquisition of a medical firm may not disrupt healthcare, but could disrupt your life, Los Angeles Times, August 18, 2022, by Michael Hiltzik
Amazon plainly believes that there is profit to be made from the business model of One Medical.
One Medical aims its services, which amount to providing faster appointments, âwellnessâ services and âroutine and preventive care,â at a relatively affluent market segment. It does so partially by charging an annual fee of $199.
Then thereâs the firmâs practice of geographical segregation. One Medical says it places its offices in âlocations convenient to where consumers work, shop and live.â This works to One Medicalâs advantage by âlimiting its exposure to uninsured, poor, and costly patients.â
âAmazon may be able to make this a viable business venture that returns a significant profit to their investors,â David Blumenthal, a primary care physician who is the Commonwealth Fundâs president, told me. But âunless they substantially change the model this will just be another selective deal serving a part of the population that is already favored by the current healthcare system.â
âMost of health care spending is on sick patients and canât be easily reduced,â Amitabh Chandra, a healthcare expert at Harvard Business School, said in an interview on the schoolâs website after the Amazon announcement.
Amazonâs high-profile misstep was Haven, a joint venture with Jamie Dimonâs JPMorgan Chase & Co. and Warren Buffettâs Berkshire Hathaway, launched in a blare of publicity in 2018 and humiliatingly shut down in 2021.
Haven aimed to reduce American healthcare costs by focusing on âtechnology solutions,â but the Bezos/Dimon/Buffett triumvirate didnât understand what healthcare economist Uwe Reinhardt and colleagues identified in 2003 as the main reason for high healthcare costs in America, with an article titled âItâs the Prices, Stupid.â
The key flaw in the American healthcare system is the encroachment of business principles into what used to be regarded as a public service, back when Blue Cross and Blue Shield were nonprofit insurers and most hospitals were nonprofit providers.
The structure that would be most likely to bring universal healthcare to Americans at an affordable price would be a single-payer system with the government as the payer. But even Medicare, which was once the quintessential single-payer program, has been moving away from that principle, thanks to the spread of private Medicare Advantage plans.
Comment:
By Don McCanne, M.D.
Whereas quite a few individuals are being served fairly well by our current health care system, far too many are not because of deficiencies and voids, especially in the way we pay for health care. Even though we spend more than other nations, we fall below many other wealthy nations in our health care outcomes, largely because of these deficiencies.
Part of the problem is demonstrated by the proposed Amazon acquisition of One Medical. It is structured as a business deal to make a profit for private investors (concierge fees, marketing to the healthy and wealthy, avoiding care for the sick and poor) while avoiding the public service concept of health care for all.
Now even our traditional public insurance programs are also being converted to cater to private investor interests as exemplified by private Medicare Advantage and ACO REACH models. Weâre clearly headed in the wrong direction.
As Michael Hiltzik states, âThe structure that would be most likely to bring universal healthcare to Americans at an affordable price would be a single-payer system with the government as the payer.â
http://healthjusticemonitor.org…
Stay informed! Subscribe to the McCanne Health Justice Monitor to receive regular policy updates via email, and be sure to follow them on Twitter @HealthJustMon.