The question everyone is asking, what is Amazon, Berkshire and Chase doing with healthcare? One perspective could argue that Amazon is entering the healthcare world to first solve a large problem they have, an epic size healthcare bill.

Amazon is not alone, Walmart is busy negotiating direct contracts with centers of excellence to weed out the layers of hidden revenue that lies within the healthcare supply chain.

Company’s such as Amazon and Walmart are experts at market disruption in the private sector. Amazon is also genius at diagnosing a problem they have, fixing it, then delivering the solution to the market. Introducing, AWS, Amazon Web Services.

So Amazon’s problem is a $1.25 billion annual healthcare bill for just the employees in the US. We used an average cost of $10,000 per employee per year times 250,000 employees to arrive the cost. (Your company’s is higher?)

Milliman puts healthcare costs into four buckets, 27% for Rx, 30% for hospital, 20% for outpatient surgery and 20% for physician’s. Amazon recent purchase of Pillpack is a clear sign Amazon is first attacking prescriptions. A lot of scripts are being filled each and every day.

A 20% reduction in prescription costs is not unreasonable to expect, given all of the hidden revenue streams within the transaction. A 20% reduction in Rx costs is worth $27 million dollars. That is attacking only one bucket!

Once Amazon fixes their own problem, they will scale it, then sell it to the market. Berkshire Hathaway happens to own reinsurance carriers and Chase has the financing. Seems like a perfect fit.

No need to wait to wait for Amazon to fix the problem, Midwest Benefit Advisors is implementing fiduciary responsible strategies that align the interests all the healthcare partners with the patient.

Contact MBA to learn how to reduce costs and increase benefits.