Amazon, Berkshire Hathaway, And JPMC’s Haven Disbands — What That Means For Healthcare Companies
With the news that Haven — the joint venture from Amazon, Berkshire Hathaway, and JPMorgan Chase (JPMC) — plans to shut down operations at the end of February, traditional health insurers and business process outsourcing firms (BPOs) may be breathing a sigh of relief. Celebrants beware — this is a temporary reprieve. Haven promised to revolutionize how health insurance was managed, and its entities have had three years to gather insights about the challenges insurers face. The most formidable force of this trio for healthcare continues to be Amazon.
Red Sky At Morning, Healthcare Take Warning
Healthcare organizations and employers must act now to innovate and rethink the way they deliver healthcare services and coverage to customers and employees alike. Healthcare has been comfortable under the status quo for too long. Pressure from the pandemic has only accelerated and amplified customer and employee demand for more convenient, cost-effective care and better customer service. Those that do not heed the warning will be left adrift.
What To Expect In 2021
Amazon will bring lessons learned (and talent) from Haven to new market offerings under its own banner. Just because the joint venture is coming to an end doesn’t mean insurers and BPOs can relax. Disruption and challenges will further test legacy players and processes in healthcare. As we open a new year, expect Amazon to further flex some newfound skills:
- Amazon learned how to leverage local networks to deliver care to remote workers. While this was an interesting pilot at the end of 2019, the surge in remote work due to COVID-19 has created a need for more flexible care delivery models for employers. Insurers who fail to learn that lesson will find themselves behind competitors who adopt pilots and long-term partnerships that enable better virtual care and home-based care, including prescription deliveries and vaccinations. Amazon is already rumored to be in talks to extend its Amazon Care platform to other large employers looking to rein in medical costs.
- Amazon overcame primary care challenges with employer sponsored clinics. Through a partnership with Crossover Health, Amazon has tested the direct primary care model and seen early success in multiple markets. Patients (Amazon employees) have been happy with the short wait times, access to virtual care, and ability to develop a relationship with a provider through this model. Long term, Amazon plans to expand to not only where they have offices and distribution centers, but where their employees live — making these services available across communities where millions live and work.
- Amazon is squarely in the pharmacy space and expansion will come. The Pillpack acquisition and launch of Amazon Pharmacy was a shot across the bow for pharmacy benefit managers and health insurers alike; Amazon will benefit from economies of scale through its existing delivery infrastructure and get some experience under its belt in 2021. For example, consumers can now purchase an FDA-approved at-home COVID test from Amazon. It will continue to build out this service network and distribution channel to make it far easier for consumers to buy healthcare goods and services from Amazon.
Want to learn more about how to prepare to respond to disruption in healthcare? Set up an inquiry and check out our related research and blogs.