Business Economics Health Care

Amazon and Apple Suggest That Employer-Provided Health Care Is Our Future

Amid all the (justifiable) concerns this week over the Administration’s steel and aluminum tariff warning, the business press did not focus too much on Apple’s quiet announcement about its new health care initiative, AC Wellness. A quick glance through the AC Wellness web site does not provide much information, but what is there is enough to suggest what’s coming. For unlike every other employer health site, Apple’s has a list of job openings for health care professionals, including specialist doctors and other health-care delivery roles one would normally expect at a hospital or clinic.

The initial read of AC Wellness is that Apple will use these clinics to test out new technology and products for sales to consumers. That may be true, but I think Apple is also exploring something far more radical: setting up its own health care delivery network for its employees. My view is shaped not just by Apple’s experiment but also by the recent initiative launched by Amazon, Berkshire-Hathaway and JP Morgan designed to pool their employees into some new kind of health care delivery model for their combined workforces.

I don’t think that the ABJ effort is just about pooling demand and neither do some of the analysts who cover this space. For example, in a recent CNBC post, Esther Dyson, executive founder of Wellville, noted the following:

The recent announcement of a health alliance by Berkshire Hathaway, Amazon and J.P. Morgan promises to disrupt the health-care industry (but with few details), and it has thrown the market into a tizzy. The overall reaction in the press has been that the initiative is the business community saying, “Government has failed; let us take over.” But it is also private health care that has failed. Both the government and the health-care system (whether for-profit or nonprofit) are slow, bureaucratic and perversely incentivized.

She’s right. Both of these decisions are a conclusion that the entire current health care delivery model in the U.S. is broken and that these four companies, among the mightiest in America, are going to try to take matters into their own hands. The only logical conclusion of these efforts is that they will assume primary health care provider status themselves, thereby assuming responsibility for the complete primary wellness of their employees.

What could such a model look like in ten years? I foresee a two-level system. In the first level, corporations deploy full-scale disease prevention and wellness systems, delivered by them and monitored with the next generation of wearable health technology. In addition to this prevention layer, the second layer offers clinical care, including imaging, outpatient surgery and pharmaceutical distribution. A likely compliment will be to partner with a premier hospital group like Cleveland Clinic or Johns Hopkins to provide more advanced surgical care when needed.

If this scenario comes true, then in the future health care itself, and not health care insurance, will distinguish the best corporate health care plans. Employees will shop not just for the best coverage on offer but for the companies with the best doctors and clinics. Indeed, one could even imagine these companies founding a new kind of medical school dedicated as much to maintaining health as to curing disease.

We are about to enter an era of major experimentation and debate around healthcare. On the far left of the political spectrum, the failure of today’s system has led to the proposal for a universal, single-payer system. This idea is extremely appealing to many when compared with today’s nightmare of a system. However, there is a strong aversion to this kind of model buried deep in the American psyche. If corporations assume the role of primary care providers, and I believe they will, then we will have an entirely new option to posit against socialized medicine. For many on the right, the idea of Amazon and Apple medicine will be a welcome idea. I suspect most of their employees will feel the same.

Of course, the big question in this future scenario is what happens to people who don’t work at the world’s best companies. Perhaps we will wind up with a two-system model. Single-payer for the unemployed and for employees of companies that don’t provide care and employer-care for everyone else. Whatever the options ten years from now, I predict that if Amazon and Apple have their way, they will use their own employees to design and build proprietary health care networks that will significantly alter the health care landscape in this country.

Let the experimentation begin.


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