Will Amazon, JPMorgan And Berkshire Hathaway Upend Healthcare, Too?

Amazon has disrupted big-box retail, made waves in the grocery store world and tantalized hundreds of cities around the country simply by offering to open a second headquarters.

Could healthcare be the next target?

The online retail giant, together with JP Morgan & Co and Warren Buffett’s Berkshire Hathaway, said they would launch a new healtcare company for their employees. It would be “free from profit-making incentives."

On Point tackled the topic Thursday in an hour dedicated to ideas for bringing down healthcare costs.

“I think there a growing consensus that the problem with American healthcare is prices, prices, prices,” Noam Levey, Los Angeles Times healthcare reporter, told guest host Anthony Brooks. “We don't use hospitals more than other people. We don't go to the doctor more frequently than our counterparts in Western Europe and other industrialized countries. But we pay a heck of a lot more. So the question is, can these three guys, can their partnership drive down prices across the large larger health care system?”

That’s very much an open question: They’re huge, but only a small part of the larger American population, Levey noted.

It’s not an entirely new idea, either, Levey said; companies like Boeing and even public pension systems like Calpers have done innovative things on healthcare for their employees, “but they haven't solved the problem across the whole health care system.”

Tech innovations will only go so far, Levey noted. Amazon's futuristic innovations include keys that will open your door when you're not home and drones that can do same-day delivery, but it’ll be the more prosaic things that matter.

“If these guys can figure out some ways to eliminate waste in the system by buying drugs, for example, at a lower price for their employees, or pressuring hospitals that work with their employees to get a larger discount on what they charge — that, I think, has some real possibility. Again, it would need to be replicated across the whole system.”

We also talked Thursday about President Trump’s talk in the State of the Union about lowering drug prices.

While then-candidate Trump specifically targeted drug makers with his rhetoric, now-President Trump is a bit more generic about bringing down drug costs. That could mean tinkering with how insurance, rather than the pharmaceutical industry.

The president has tapped drug industry vet Alex Azar as his Health and Human Services secretary.

"On its face, it’s hard to believe this is the person who’s going to ante up and pursue an aggressive agenda on drug prices in the Trump administration," Dylan Scott, a Vox reporter, told us.

Trump also mentioned “right to try” laws, which would give patients access to experimental drugs.

But they already have that access, Alison Bateman-House, a professor of medical ethics at New York University’s School of Medicine, told us.

“To make it sound like there’s some sort of prohibition on people getting access to treatments is a gross misrepresentation of reality," Bateman-House said.