Can America’s Corporate Giants Show a Third Affordable Health Care Option?
WHY YOU SHOULD CARE
The most dramatic shift in America's health care may come not from Bernie Sanders but from Amazon and Walmart.
By Andrew Hirschfeld
The Democratic presidential field is effectively down to two candidates, but that’s only sharpening the debates central to this race. Health care remains near the top of that list, its significance only heightened by the ongoing panic caused by the coronavirus and a national shortage of test kits. Yet as progressives led by Sen. Bernie Sanders demand “Medicare for All,” and moderates like former Vice President Joe Biden want to build on the Obama-era Affordable Care Act, a third option is emerging.
Some of America’s largest private sector firms are creating alternative health care facilities and initiatives, promising to offer better quality than Medicare while at the same time keeping costs lower than in the traditional private market. These initiatives are poised to inject a fresh edge to the health care debate in the months leading up to the November election. As America’s traditional health care system scrambles to address the country’s concerns over the coronavirus, this new model will come under scrutiny to see whether it can respond to such crises better.
Amazon in February opened a health care facility for its employees in Seattle. The clinic, called Amazon Care, is part of the tech behemoth’s growing health care marketplace. Separately, Amazon, JPMorgan and Berkshire Hathaway have also recently launched Haven Healthcare — a not-for-profit enterprise targeted at staffers of the three companies, with its own pharmacies, clinics and tech-based medical interventions. In November, Haven announced it would offer subsidized health plans to 30,000 JPMorgan employees in Ohio and Arizona. Amazon has announced its employees in Wisconsin, Utah, North Carolina and Connecticut will be among initial beneficiaries, though the firms are yet to disclose the actual cost to patients.
Since September, Walmart has launched two standalone health centers in Georgia, the first steps in a nationwide effort aimed at targeting the 150 million customers who stream through the retailer’s doors each week. Sam’s Club — the membership-only retail clubs owned by Walmart — has launched what it calls ‘Care Accelerator,’ which offers free prescriptions of certain generic medications. They also tout insurance plans via Humana that offer unlimited telehealth — a nice option, given the coronavirus outbreak — alongside optical care.
Ride-hailing service Uber is dipping into the ambulance care market. Uber Health commits to an immediate response to patients and caregivers — which is not an assurance consumers get when they order an Uber for nonmedical purposes. An emergency ambulance ride can otherwise cost patients up to thousands of dollars.
I believe Haven will be a test bed to scale some of the work Amazon comes up with before they take it to a wider market.
Michael Abrams, Numerof & Associates
It’s early days, but their deep pockets and access to cutting-edge technology mean America could be looking at a health care disruption very different from the one Sanders is promising. Already, the White House on Thursday asked Silicon Valley to come up with artificial intelligence-based solutions that can help battle the coronavirus scare. These companies are well placed to lead such a drive. And experts believe the employee-focused initiatives of firms like Amazon could soon serve as a launchpad for a national effort catering to all customers. Amazon, JPMorgan and Berkshire Hathaway collectively have almost a million U.S.-based employees.
“I believe Haven will be a test bed to scale some of the work Amazon comes up with before they take it to a wider market,” says Michael Abrams, managing partner of Numerof & Associates, a leading global health care strategic management firm.
For these giants, the medical facilities represent a chance at tapping into the $3.6 trillion America spends on health care each year — the size of Germany’s economy. But their alternative to Medicare comes amid a heated national debate on the subject. Their success could strengthen the hands of moderates who want to allow voters the choice of retaining private providers while strengthening the public option. Biden’s campaign, for instance, says his health care plan focuses on “giving Americans more choice, reducing health care costs and making our health care system less complex to navigate.”
Equally, if they stumble, it becomes further evidence for supporters of progressives that Medicare for All is the only way forward. After all, the health care that big companies like Amazon and JPMorgan are promising their employees won’t work for America’s fast-growing freelancer population. “I cannot rely on employer health care, so Medicare for All will be beneficial to those in employment situations like mine,” says Michael Porter, a Brooklyn, New York-based freelance creative. By 2027, a majority of Americans are expected to be freelancers or gig workers.
Already, some of Amazon’s moves have sparked concerns. After Amazon started selling software that mines patient records to help health care providers improve quality of care and cut costs, the American Medical Association and the American College of Obstetricians and Gynecologists raised worries over privacy. Even as Amazon is building out Haven alongside Berkshire Hathaway and JPMorgan, in September its subsidiary Whole Foods slashed health benefits for 1,900 part-time employees. For progressives, that’s further proof that big companies don’t look out for the little guy.
It’s a view that resonates with voters like 33-year-old Ryan Carlton of Houston, Texas. He suffers from microtia, a congenital ear defect that has led to lifelong medical issues. Before the Affordable Care Act was passed under the Obama administration, Carlton says “he was rejected by insurance companies.” Yet even though he benefited from the ACA he believes Medicare for All is what America needs to fix its health care crisis.
But the resources and tech solutions at the disposal of some of these private sector giants entering health care allows them to offer solutions that won’t be easy to ignore — wherever on the political spectrum you sit. Haven plans to offer free preventative care and plans with no deductibles. It’ll focus on telemedicine, and use artificial intelligence to identify and prevent illnesses. They even offer rewards for staying healthy.
Meanwhile, Apple is working with the Department of Veterans Affairs to allow vets quick access to their medical records through iPhones. The tech giant has also incorporated an electrocardiogram function into the Apple Watch that is approved by the Food and Drug Administration. And Walmart’s health centers offer primary care, laboratory tests, X-rays, electrocardiograms, counseling and dental, optical, hearing and community health services.
As these firms expand on their plans in the coming weeks, their initiatives could add a fresh twist to the health care debate. These companies might find themselves on the presidential debate stage without actually being there.
- Andrew Hirschfeld, OZY Author Contact Andrew Hirschfeld