The recent announcement of a health alliance by Berkshire Hathaway, Amazon and J.P. Morgan promises to disrupt the health-care industry (but with few details), and it has thrown the market into a tizzy. The overall reaction in the press has been that the initiative is the business community saying, "Government has failed; let us take over." But it is also private health care that has failed. Both the government and the health-care system (whether for-profit or nonprofit) are slow, bureaucratic and perversely incentivized.
Nonetheless, these three companies are well positioned to make a difference. They are large enough and influential enough to change culture — which is what cultivating health at scale is about.
First, the leadership lineup is promising. All three of these outfits think long term: Amazon CEO Jeff Bezos and Berkshire CEO Warren Buffett as individuals, and J.P. Morgan because it is a bank and understands compound interest, discount factors and externalities and the economics of long-term thinking. By contrast, government is motivated by votes and short-term results, while health care is motivated by money and short-term results. (Yes, nonprofits have budgets, too.)
While there have been efforts to address these issues — recently there has been some focus on "accountable care," where the health-care provider gets rewarded according to results — that approach is spreading very slowly. Customers like the Berkshire-Amazon-J.P. Morgan alliance, which can bargain for results-based payments, could move that needle for themselves and ultimately inspire others.