Mr. Jamie Dimon, the chairman and CEO of JP Morgan Chase, had a few thoughts about the JPM-Berkshire Hathaway-Amazon healthcare JV for all three companies. You’ll have to fill up the tea or coffee mug (make it a small pot) for it’s an exceedingly prolix Annual Shareholder Letter you’ll have to sled through to find those comments. Your Editor has taken her punishment to find them, towards the end of the letter in ‘Public Policy’.
They demonstrate what this Editor suspected–an headache-inducing mix of generalities and overreach, versus starting modestly and over-delivering.
- Point #1 sets up what has gone wrong. Among several, “Our nation’s healthcare costs are twice the amount per person compared with most developed nations.” Under point 2 on how poor public policy happened, an admission that Obamacare fixed little:
Here’s another example: We all know that the U.S. healthcare system needs to be reformed. Many have advocated getting on the path to universal healthcare for all Americans. The creation of Obamacare, while a step in the right moral direction, was not well done. America has 290 million people who have insurance — 180 million through private enterprise and 110 million through Medicare and Medicaid. Obamacare slightly expanded both and created exchanges that insure 10 million people. But it did very little to fix our broken healthcare system and has, in fact, torn up the body politic over 10 years — and this tumult may go on for another 10 years.
- Point #7 is about fixing the deficit and the ill effects if we don’t. In Mr. Dimon’s view, healthcare is a major part of this through the uncontrolled growth of entitlements, with Medicare, Medicaid and Social Security leading the pack–skipping over the fact that nearly all Americans pay into Medicare and SSI well in advance of any entitlement collection. Healthcare is also an offender through unnecessary costs such as administrative and fraud (25-40 percent), and six mainly chronic conditions accounting for 75 percent of spending.
- The experts–specifically, their experts–will fix it! “While we don’t know the exact fix to this problem, we do know the process that will help us fix it. We need to form a bipartisan group of experts whose direct charge is to fix our healthcare system. I am convinced that this can be done, and if done properly, it will actually improve the outcomes and satisfaction of all American citizens.”
- The generalities continue with
- The JV “will help improve the satisfaction of our healthcare services for our employees (that could be in terms of costs and outcomes) and possibly help inform public policy for the country.”
- Aligning incentives systemwide ‘because we’re getting what we incentivize’
- “Studying the extraordinary amount of money spent on waste, administration and fraud costs.”
- “Empowering employees to make better choices and have the best options available by owning their own healthcare data with access to excellent telemedicine options, where more consumer-driven health initiatives can help.”
- “Developing better wellness programs, particularly around obesity and smoking — they account for approximately 25% of chronic diseases (e.g., cancer, stroke, heart disease and depression).”
- “Determining why costly and specialized medicine and pharmaceuticals are frequently over- and under-utilized.”
- “Examining the extraordinary amount of money spent on end-of-life care, often unwanted.”
- “To attack these issues, we will be using top management, big data, virtual technology, better customer engagement and the improved creation of customer choice (high deductibles have barely worked”).
This Editor has observed from the vantage of the health tech, analytics, payer, and care model businesses that nearly every company has addressed or is addressing all these concerns. So what’s new here? Perhaps the scale, but will they tap into the knowledge base those businesses represent or reinvent the wheel?
A bad sign is Mr. Dimon’s inclusion of ‘end of life care’. This last point is a prime example of overreach–how many of the JV’s employees are in this situation? The ‘attack’ tactics? We’ve seen, heard, and many of us have been part of similar efforts.
Prediction: This JV may be stuck at the 50,000 foot view. It will take a long time, if ever, to descend and produce the concrete, broadly applicable results that it eagerly promises to its million-plus employees, much less the polity.