As a consumer of healthcare, I am a forced participant in one of the largest scams on the planet. That scam is the American healthcare system. Basically, the scam goes like this: I pay more and more for shrinking services, big healthcare organizations reluctantly provide services while pretending to care about my health, and corporate shareholders and executives become fabulously wealthy. I love America!
What about the physicians, nurses and other healthcare professionals we all know and love? They lost control of the healthcare industry in the early 1970’s. Today, they are bit players or employees of big healthcare.
Being from a tough neighborhood in Baltimore filled with wise people I have learned no scam continues forever. The three-card monte guy gets chased from the corner. The crooked home improvement contractor is chased from the community or arrested. The house burglar picks the wrong house and is either arrested or shot.
The scam eventually comes to an end.
We are in a similar place with respect to healthcare. I can sense it. I can smell that certain something in the air that portends a violent thunderstorm, or worse. The healthcare scam is about to abruptly draw to a close.
What precipitated my cataclysmic prediction? I recently observed top technology firms confidently moving to pounce on an industry The New York Times referred to as “a notoriously inefficient, intractable web of doctors, hospitals, insurers and pharmaceutical companies.”
These top tech firms are not eyeing the healthcare industry from the angle of a typical Wall Street merger and acquisition deal. Nope. I see in their moves a vision of creating the next Amazon, Google, Uber, Airbnb, SpaceX or iTunes. I see these tech firms planning a massive, irreversible industry disruption driven by technology, followed by layoffs, bankruptcies, real estate vacancies and ultimately substantially lower costs with improved patient outcomes. I see destruction, creation, renewal and change.
On January 30, 2018, a curious article appeared in the Wall Street Journal: “Triple Threat: Amazon, Berkshire, JP Morgan Rattle Healthcare Firms.” According to the article, these three behemoths plan to form a company to reduce their workers’ health costs using technological solutions. The goal is simplified, high-quality healthcare for thousands of their employees. If this sounds like the typical corporate search for cost savings, you are wrong. The new company will not be a profit-making venture. Shares of health insurers and healthcare companies plunged.
Some healthcare industry mouthpieces bravely brushed off the announcement, essentially saying, “Move along, nothing to see here.” One consultant brashly told The New York Times, “The idea that they could have any sort of negotiation leverage with unit cost is a pretty far stretch.”
However on the very next day, The Editorial Board of the Wall Street Journal published an article encouraging the threesome not to go after small potatoes such as pharmaceutical deliveries. “Our advice: Go much bigger.”
“American health-care could benefit from creative destruction,” The Editorial Board advised, adding ominously, “health care is long overdue for a shake up.” I detected the first droplets of rain as the sky darkened and the sound of thunder could be heard in the distance.