Credit by: Varun Ganapathy.
In a recent press release, the consortium of Amazon, Berkshire Hathaway and JP Morgan Chase, announced that they had formed a new healthcare entity called Haven. The consortium aims to solve the rising healthcare costs and streamline the process of getting comprehensive and affordable care for all of its employees. This recent announcement should be a wake-up call for all healthcare payers and providers.
WHY IT MATTERS
The healthcare industry as a whole has seen very little disruption over the years. This has not been lost on big time investors such as Warren Buffet and Jamie Dimon. They see an opportunity to bet on two things:
There is a thirst for new healthcare options. Healthcare costs will continue to rise thus affecting their businesses directly.
The current inability for the healthcare industry to stabilize its costs has led to much frustration across the board from end consumers to business leaders. With the backing of two major funds along with the wide reach of Amazon, this consortium seeks to eliminate a lot of the problems that the end consumers of the healthcare industry experience. The addition of Amazon also brings in a strong technology and cloud background, which will end up saving Haven a lot of money. A lot of the payers currently in the market are still using monolithic systems that:
Cost a lot of money.
Require constant upkeep.
Slow down many essential processes.
If they are not moving nonessential and essential functions to the cloud, they are behind the 8-ball. Amazon will also be using cutting-edge AI and ML to help consumers make smarter decisions about their healthcare, something that current payers are still trying to figure out how to do.
Although these are serious reasons as to why the consortium matters, it is not the most important one. The most important reason as to why the consortium matters is because of who is backing it. If Haven really aspires to transform healthcare, they have the means and the backing to do so. If they want to buy up space to build facilities for patients to get care, they have the nation’s second-largest brokerage firm backing it up and giving them the flexibility to buy real estate as needed. If they needed capital on hand, they are associated with one of the largest financial institutions in the world, JP Morgan Chase. That allows for them to gather funding necessary to scale and grow their lines of business.
Speaking of scaling, they have the backing of Amazon, by proxy AWS as well. The ability to scale up and down using the cloud can help Haven expand their business and expand their capabilities into more focused, data-driven solutions. These three companies are the main drivers that will help Haven become successful.
HOW TO REACT TO HAVEN
While this is not the time for rash judgement, there are certain measures that healthcare companies can take to position themselves for upcoming competitions. The following are what I consider to be big-ticket items that should be addressed first:
Ensure that all applications are starting to move to the cloud: This is one of the most important points. While there are still some security concerns involved with moving sensitive information to the cloud, that should not be a reason that most, if not all, applications are moving toward a cloud solution. Whether it is AWS or Azure, leveraging the cloud as an information repository can help streamline a lot of the business operations such as claims processing.
Utilize Artificial Intelligence and Machine Learning to help make decisions: By implementing rules on what claims get approved or declined, you are able to automate the process, thus freeing up capital to use in whatever way you deem necessary. You can also utilize AI and ML to help make informed decisions on what kind of offerings to put out into the market, what are the recent drivers in terms of cost, and ultimately, help create a healthier population by gathering insight on the consumers
Creating a better customer experience: By creating a better customer experience through connecting via mobile devices and simplifying main functions of healthcare, you are then able to build a solid customer base. When new entrants come into the market, especially ones that have the notoriety of Haven, then we tend to see some of the fringe customers head over to try the new entrant. In order to prevent this, and satisfy current/future customer trends, it is imperative to create a better customer experience.
These should be the first three steps that are taken to in order to start competing and start looking into the future to help grow your business. These are the steps that successful companies will take to ensure that they are geared up for the upcoming competition.
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