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Opinion | Why Amazon-Berkshire's Healthcare Company Could Be Good For Healthcare


Have you ever wondered:

  • Why do so many healthcare clinics get bad reviews on Google or Yelp?

  • Why does it take so long to see some doctors?

  • How well do you understand your insurance benefits?

  • Did you know the same services you had in a hospital could be much less if you had the procedure in an outpatient clinics?

  • Did you ever wonder why it is so hard to get consistent service or answer for healthcare services?

I'll tell you... the system is broken, fragmented, wasteful and confusing. Heck, many doctors are not aware of what they charge their services, much less what your cost will be. Many of times, they will not be paid for their services for months while their team of billing experts fight tooth and nail with the insurances to pay for a service claim. A majority of clinics use multiple of systems to operate their practice. Over 30% of time, effort, energy is wasted on redundant processes and if you have ever looked into commercial payor policy manual, well, be prepared to have your own interpretation.

Let's look at this from 10,000 feet and go back a few years when everyone was required to have health insurance. Per eHealthInsurance, in 2016 the average family healthcare premiums were around $833 per month with an $8,000 family deductible. Total cost before your insurance kicks in is $18,000 out of pocket and it all starts over every year. The real median household income was just under $60k per TheBalance.com, subtract the taxes of 25%, would give around $45,000 income. That would make the family's healthcare cost 40% of their income after tax... before the insurance company will start to contribute! There is a still a mortgage, food, and other living expense to cover. Yikes. So, what do families do? They prefer the "hope-listic" way of medicine and hope they get feeling better. They push off doctors visits, testing procedures, therapy, medications, etc... it's a sunk cost and can certainly have life threatening repercussions (which is an additional cost to the healthcare system).

Now, let's look at the business side of healthcare. The doctors must be raking it in, right? I mean, they are doctors? Not quite. You see, there is quite a bit of overhead in running a healthcare clinic of any size. The amount of work and documentation required to have a claim paid is laborious to say the least and even then, the doctor may never get paid because a lack of authorization, misquote from the insurance company, billing errors, clearinghouse errors, insurance company errors. There are so many ways to have a claim not paid that it takes a full time team to stay on top of these. Medical billing professionals are not cheap, but worth their weight in gold. While doctors are dealing with these issues, the insurance companies start to lower their reimbursement for services. Now, clinics need to do more with less but unable to control all of the system to do so. It's a mess.

So who wins? The insurance companies, of course. Keep in mind these are publicly traded companies and public companies top responsibility is to benefit the shareholder, not the patient. They have this system set up to collect premiums and deductibles before they start contributing. On the other side, they are withholding payments and lowering reimbursements from clinics. Take a look at UnitedHealthcare's stock over the past 3 years and then look at their CEO's compensation. They are crushing it. While there is nothing wrong with someone making money, there is a problem when you do it this way and crippel a system to have financial gain.

So why will the Bezos-Buffet venture be helpful for healthcare? As mentioned above, health insurance companies are not structure to serve the people, they are structured to maximize the profits of shareholders and that is why the U.S. Healthcare system is its current situation. Redesigning the healthcare system for the modern era will remove the waste of using archaic systems (when will we get away from faxing??). An A-Z redesign should shorten process, reduce redundancies, and create transparency. The much needed transparency allows for an environment of accountability. The reduction of waste and middlemen would lead to lower costs. These lower costs allow more people to use the system and create a healthier community. I have hopes that the Amazon-Berkshire Healthcare Co will be the beginning of designing a system to serve the patient from top to bottom while closing the gap between the doctor and the patient. After all, that was what medicine was built on to begin with.