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 Posted: Tue Jan 30th, 2018 11:41 pm
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srossi
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https://www.reuters.com/article/us-amazon-healthcare/amazon-berkshire-jpmorgan-partner-to-cut-healthcare-costs-idUSKBN1FJ1NF

(Reuters) - Amazon.com Inc, Berkshire Hathaway and JPMorgan Chase & Co will form a healthcare company aimed at cutting costs for their U.S. employees, they said on Tuesday, sending shares in the broad healthcare sector sharply lower.

The company will not aim to make a profit and initially focus on technology to provide what they called “simplified, high-quality and transparent healthcare” for their more than 500,000 U.S. employees.
“The ballooning costs of healthcare act as a hungry tapeworm on the American economy,” said Berkshire Hathaway Chairman and Chief Executive Officer Warren Buffett. “Our group does not come to this problem with answers. But we also do not accept it as inevitable.”
The announcement comes as investors in the healthcare sector worry that technology and retailing behemoth Amazon could become a healthcare competitor and eat away at sector profits, just as it has done in retailing.
Amazon has been looking at the pharmacy business and pharmacy distribution, according to numerous media reports and Wall Street analysts. It is unclear if the company has plans beyond this initiative.
U.S. healthcare spending increases each year faster than inflation, and in 2017 accounted for 18 percent of the U.S. economy. Corporations, which sponsor healthcare plans for more than 160 million Americans, and the U.S. government are trying to cut those costs.


Prices have risen under former Democratic President Barack Obama’s 2010 Affordable Care Act, which overhauled health insurance and expanded the Medicaid government program for the poor.
Republican President Donald Trump has rolled back the mandate that required all Americans to have health insurance or pay a fine, cut subsidies for low-income people and promised new, cheaper insurance.
By teaming up with JPMorgan, the biggest U.S. bank, and Berkshire, the third largest public company in the world, Amazon appears to be taking a big step in shaking up the health industry.
“Investors have continually asked what unexpected development might spoil the strong investor sentiment towards managed care. Unfortunately, this seems tailor-made to fit the bill,” BMO Capital Markets analyst Matt Borsch said in a research note.

Health insurers that provide benefit management or health plans to the three companies could be among the hardest hit.
JPMorgan uses UnitedHealth Group Inc and Cigna Corp for health benefits for its global workforce, according to ISI Evercore analyst Ross Muken. Neither company was immediately available for comment.

Amazon uses Premera Blue Cross, part of the Blue Cross Blue Shield network, according to Muken. Express Scripts, the pharmacy benefits manager, has disclosed it manages pharmacy benefits for Amazon.
Shares in UnitedHealth, Cigna Corp and health insurer Anthem Inc fell 4 percent to 7 percent.
Drugstore operators CVS Health Corp and Walgreen Boots Alliance as well Express Scripts all dropped between 4 percent to 8 percent.
Drug distributors Cardinal Health, AmerisourceBergen and McKesson were off 2 percent to 4 percent.
The plan, currently in the early stages, will be spearheaded by Berkshire investment officer Todd Combs, JPMorgan managing director Marvelle Berchtold and Amazon senior vice president Beth Galetti.
Wall Street saw the move as a positive for Amazon though its shares fell 0.5 percent. Much of Amazon’s value is from its owning and interpreting massive amounts of data, according to ISI Evercore.
“Though it is unclear how the data of this venture will be shared/utilized, it is not inconceivable that Amazon could potentially leverage it longer term to better navigate the complexities of the healthcare market,” the note said.



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 Posted: Wed Jan 31st, 2018 12:18 am
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I am looking forward to seeing how this shakes out



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 Posted: Wed Jan 31st, 2018 05:51 pm
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KGB

 

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Yep, me too. Innovation, not a one-size-fits-all solution, is what will fix the problems with health care.



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 Posted: Thu Feb 1st, 2018 08:46 am
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I am interested to see how this shakes out too, but it concerns me. If your employer is also your health insurer, they have total access to your health history. If an Amazon employee (or one of his dependents) is diagnosed with cancer and his health insurer is also Amazon, what is to prevent Amazon from canning the guy to avoid incurring the cost of his cancer treatments? Amazon could easily come up with some BS reason to ax the guy - especially if he is in a "right to work" state where employers are able to terminate an employee with no cause needed.

I am not a fan of health insurance being a benefit offered through your employer since I believe that employees / prospective employees can be discriminated against due to health issues. For example, some companies refuse (and it is legal for them to refuse) to hire smokers. Where will the line be drawn? Overweight people? Cancer survivors? Diabetics? Additionally, affordable health care plan available to people should not be limited to those offered by their employer.

I am a firm believer that just the opposite should happen - get employers OUT of the health insurance business. Instead, employers can provide a stipend that their employees can use to purchase any health care plan that they wish.

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 Posted: Thu Feb 1st, 2018 04:55 pm
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KGB

 

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The points you raise certainly give pause. And on the whole, I agree that having employers involved in your health care is something that really ought to be jettisoned. The sole positive effect I've seen in the wake of Obamacare is the advent of HSAs. Yes, you need to be in a high deductible program to take advantage of them, but for me that's a good fit. In exchange, my company has given me several thousand dollars in the past few years (undoubtedly a tax write off for them) which has paid every last cent of my medical expenses during that time and left me with a decent surplus. If we're going to continue involving employers in health care purchases then I wouldn't mind seeing things develop in the manner you suggest. The company gives you even more money; money specifically earmarked for the purchase of health insurance. They could continue to take write offs on it and you'd be free (somewhat) from the prying eyes of your employer.


PS, I think you need to check into what "right to work" laws actually entail. It's a bit of a stretch to say that not being forced to join a union means you're able to be fired without cause.



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 Posted: Thu Feb 1st, 2018 09:09 pm
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The company I work for changed to an HSA plan this year as the only option and I like the concept. I can see why people push back though as it’s so different than what has been the norm for many years. The ownership is on the individual now to do the research and be a better consumer.



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 Posted: Fri Feb 2nd, 2018 01:19 am
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Big Garea Fan

 

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KGB wrote: ...PS, I think you need to check into what "right to work" laws actually entail. It's a bit of a stretch to say that not being forced to join a union means you're able to be fired without cause.
My bad. What I meant to say was "at will employment" instead of "right to work". Sorry for my error.

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 Posted: Fri Feb 2nd, 2018 08:53 pm
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The current model in this country is beyond broken. It is tapestry of legacy items that were put together without any real thought. Certain entities figured out how to exploit that and gain untold riches. Everybody else was screwed. It really will take an effort from an entity like this to disrupt things. Hope it works and can be exported.

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 Posted: Fri Feb 2nd, 2018 09:01 pm
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Ultimark



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KGB wrote: The points you raise certainly give pause. And on the whole, I agree that having employers involved in your health care is something that really ought to be jettisoned. The sole positive effect I've seen in the wake of Obamacare is the advent of HSAs. Yes, you need to be in a high deductible program to take advantage of them, but for me that's a good fit. In exchange, my company has given me several thousand dollars in the past few years (undoubtedly a tax write off for them) which has paid every last cent of my medical expenses during that time and left me with a decent surplus. If we're going to continue involving employers in health care purchases then I wouldn't mind seeing things develop in the manner you suggest. The company gives you even more money; money specifically earmarked for the purchase of health insurance. They could continue to take write offs on it and you'd be free (somewhat) from the prying eyes of your employer.


PS, I think you need to check into what "right to work" laws actually entail. It's a bit of a stretch to say that not being forced to join a union means you're able to be fired without cause.
HSA's were actually much better before Obamacare came into existence.  It is one of the things the R's had right.  When Obamacare came the D's watered down the HSA's because it was a R idea and that just wouldn't do.  Sorry, but that is the truth.  There are so many different things wrong now that fixing it is going to take forever.  Trump has basically poured gasoline on a fire and made things even worse.  I honestly didn't think they could screw it up anymore than it was but they managed it.  
Ideally, health ins would go away from the employer entirely.  Even though I am a free markets guy at heart, this is people's health we are talking about.  There needs to be some type of public/private partnership put into play to keep costs down.  Obamacare failed at that because it was poorly constructed.   
Both sides share the blame and are hostage to the special interest (the few) who have gotten fat off of the rest of us.  Look at the hypocrite Corey Booker, the Senator from NJ. "Mr. Progressive".  My ass.  He was against the Sanders bill that would have allowed Americans to buy drugs in other countries (including Canada) where the costs is 20 to 70% less expensive.  Oh no!  He was "concerned" about safety.  Bullshit.  He gets big money from Pharma and several of the giant's HQ's are in Jersey.   
The whole thing is FUBAR.

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 Posted: Fri Feb 2nd, 2018 09:43 pm
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Allowing private health insurance companies to direct the marketplace was a failure from the first step. Non-regulation of insurance companies was the second step of failure.

I have said it before. The health insurance companies are the most corrupt entities out there, and they are also one of the most powerful. A true monster that has no goal or adherence to improve healthcare and the people in need of it.

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 Posted: Fri Feb 2nd, 2018 10:46 pm
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Ultimark



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That's a big part of it but far from the only issue. Big Pharma, politicians who are easily bought, Doctors who receive soft dollar kick backs from both entities and it goes on and on.

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 Posted: Fri Feb 2nd, 2018 10:54 pm
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KGB

 

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Papa Voo wrote: Allowing private health insurance companies to direct the marketplace was a failure from the first step. Non-regulation of insurance companies was the second step of failure.

I have said it before. The health insurance companies are the most corrupt entities out there, and they are also one of the most powerful. A true monster that has no goal or adherence to improve healthcare and the people in need of it.
 
The problem with government run health care is that it too does not exist for the goal of improving healthcare or the people in need of it.  It exists to provide employment for potential voters.  You don't want the same body of employees that would otherwise be staffing the DMV to make life and death decisions for you, do you? 
 
I have no idea how we get back to this state of affairs, but the best health care is going to be provided when the only persons involved are the patient and the provider. 



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 Posted: Fri Feb 2nd, 2018 10:58 pm
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KGB

 

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Ultimark wrote: KGB wrote: The points you raise certainly give pause. And on the whole, I agree that having employers involved in your health care is something that really ought to be jettisoned. The sole positive effect I've seen in the wake of Obamacare is the advent of HSAs. Yes, you need to be in a high deductible program to take advantage of them, but for me that's a good fit. In exchange, my company has given me several thousand dollars in the past few years (undoubtedly a tax write off for them) which has paid every last cent of my medical expenses during that time and left me with a decent surplus. If we're going to continue involving employers in health care purchases then I wouldn't mind seeing things develop in the manner you suggest. The company gives you even more money; money specifically earmarked for the purchase of health insurance. They could continue to take write offs on it and you'd be free (somewhat) from the prying eyes of your employer.


PS, I think you need to check into what "right to work" laws actually entail. It's a bit of a stretch to say that not being forced to join a union means you're able to be fired without cause.
HSA's were actually much better before Obamacare came into existence.  It is one of the things the R's had right.  When Obamacare came the D's watered down the HSA's because it was a R idea and that just wouldn't do.  Sorry, but that is the truth.  
 
I just looked it up and see you're right, HSA's were created in 2003.  At my place of work, they only ever offered FSA's until Obamacare kicked in and, I'm assuming, tax breaks were provided to employers for contributing money to employees who chose high-deductible plans. 



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 Posted: Fri Feb 2nd, 2018 11:34 pm
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Ultimark



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KGB wrote: Ultimark wrote: KGB wrote: The points you raise certainly give pause. And on the whole, I agree that having employers involved in your health care is something that really ought to be jettisoned. The sole positive effect I've seen in the wake of Obamacare is the advent of HSAs. Yes, you need to be in a high deductible program to take advantage of them, but for me that's a good fit. In exchange, my company has given me several thousand dollars in the past few years (undoubtedly a tax write off for them) which has paid every last cent of my medical expenses during that time and left me with a decent surplus. If we're going to continue involving employers in health care purchases then I wouldn't mind seeing things develop in the manner you suggest. The company gives you even more money; money specifically earmarked for the purchase of health insurance. They could continue to take write offs on it and you'd be free (somewhat) from the prying eyes of your employer.


PS, I think you need to check into what "right to work" laws actually entail. It's a bit of a stretch to say that not being forced to join a union means you're able to be fired without cause.
HSA's were actually much better before Obamacare came into existence.  It is one of the things the R's had right.  When Obamacare came the D's watered down the HSA's because it was a R idea and that just wouldn't do.  Sorry, but that is the truth.  
 
I just looked it up and see you're right, HSA's were created in 2003.  At my place of work, they only ever offered FSA's until Obamacare kicked in and, I'm assuming, tax breaks were provided to employers for contributing money to employees who chose high-deductible plans. 
On a lot of issues, Rick Santorum was a nut job but he pushed hard for HSA's.  They are coming back now but were really watered down by Obamacare because it didn't fit into the wealth redistribution scheme they had in mind.  Not trying to be overly critical of that but the subsidies were clearly intended for that purpose.  The HSA's as the R's envisioned them got in the way of that.  The scheme would have worked a lot better had the D's made the penalty $20K or something like that to not participate.  Instead they pussied out and made the penalty less severe than the premium for the young.  In the early years especially which was exactly the wrong thing to do.  Thus the pool of insureds wound up being older and sicker.  Anyone could see that coming from a mile away.  The irony is that the mandate was originally the idea of The Heritage Foundation and their version was truly mandatory. 

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 Posted: Fri Feb 2nd, 2018 11:37 pm
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Ultimark



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I also know there are stories like "Obamcare" saved my Mother or Father. The problem is that someone has to pay for that. It was intended that the young would be the payers since their utilization would be very low. By not making the penalty tough enough, they created the cycle we are now in. For shitty coverage, they wanted me to pay $2595 per month for a family of 4. Not a misprint. That was for 18. Instead I went with a bare bones HMO which is really nothing more that catastrophic coverage for $1202 a month. We will only see a benefit if one of us truly gets severally ill.

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