Site icon Drexel News Blog

Can the Amazon, Berkshire Hathaway And JPMorgan Chase Health Initiative Work?

Amazon App icon on New iPadAmazon, Berkshire Hathaway and JPMorgan Chase have announced a plan to establish a separate company that will focus on offering health care to their employees “free from profit-making incentives and constraints.” This has left many wondering if something like this could be achieved.

According to a joint news release issued on Jan. 30, the initial focus of the new company will be on technology solutions that will provide U.S. employees and their families with simplified, high-quality and transparent health care at a reasonable cost.

“The health care system is complex, and we enter into this challenge open-eyed about the degree of difficulty,” said Jeff Bezos, Amazon founder and CEO. “Hard as it might be, reducing health care’s burden on the economy while improving outcomes for employees and their families would be worth the effort. Success is going to require talented experts, a beginner’s mind and a long-term orientation.”

Drexel University’s Mark Stehr, PhD, associate professor in the LeBow College of Business and assistant director at the School of Economics, believes the companies face an uphill battle.

“Health information technology could be used to simplify billing and coordinate health care, but this could best be achieved if all their employees received care from a single system, something that’s infeasible if they’re spread across the United States,” he said.

Stehr agrees that technology could be used to provide employees with information on the cost and quality of various providers. The intent is for them to shop around for health care creating competition that would lead to high quality affordable care but there are limitations to consider.

“This type of transparency has yet to live up to its promise,” said Stehr. “The problem may be that consumers are reluctant — or too inexperienced — to shop for services they rarely use (e.g. colonoscopy), and many are reluctant to go with a lower priced option when quality is difficult to observe.”

According Stehr, consumers are also less likely to shop around for health care since their portion of the total medical bill is small. Those with higher deductibles may be willing to shop around for cheaper options, but once the deductible is met, the overall price for their health care needs will no longer matter.

Media interested in interviewing Mark Stehr, should contact Niki Gianakaris, executive director, Media Relations, University Communications, at 215-895-6741 or

Exit mobile version