Healthcare Insurers to Compete With Amazon, Etc.
Competition is about to heat up among healthcare insurance providers. In perhaps the first stage of marketing its proposed nonprofit entity providing healthcare insurance to employees of Amazon, Berkshire Hathaway and JPMorgan Chase, the companies jointly entered the healthcare insurance provider market in a big way on Tuesday.
A press release on the JPMorgan site reads:
[Amazon, Berkshire Hathaway and JPMorgan] announced today that they are partnering on ways to address healthcare for their U.S. employees, with the aim of improving employee satisfaction and reducing costs. The three companies, which bring their scale and complementary expertise to this long-term effort, will pursue this objective through an independent company that is free from profit-making incentives and constraints. 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 healthcare at a reasonable cost.
This continues Amazon’s push into healthcare marketing, as well as that from other cloud competitors, such as Facebook.
Stocks of major healthcare insurers tumbled Tuesday on the news.
But an InvestorPlace article written by Nicolas Chahine, managing director of SellSpreads.com, says not to panic:
I don’t blame investors for this reaction. AMZN has proven itself a scary competitor. They are worthy adversaries as they like to compete with ultra thin margins. This time around could be different because AMZN has partners who value margins. Plus there might not be a lot of froth to shave off the sector, so the downside for current providers is limited.
Amazon Founder and CEO Jeff Bezos cited high healthcare costs as a factor in creating the nonprofit and Jamie Dimon, Chairman and CEO of JPMorgan Chase, said employees want more “transparency, knowledge and control when it comes to managing their healthcare.” So the mandate to existing healthcare insurance providers is clear.
Al Babbington, CEO of PrescribeWellness, tells Target Marketing on Tuesday:
"It is great to see our country's best business minds turning their attention to healthcare. More than 70 percent of healthcare costs are due to preventable chronic disease, which means that preventive health care services can reduce expenses by more than $1 trillion. Among other things, we need to break down the legislative and political barriers that prevent local pharmacies from going 'beyond the fill' to provide these services."
What do you think, marketers?
Please respond in the comments section below.
Related story: 2 Outlooks for Healthcare Marketing in 2018