Hankering to change health care? Start with employers.
Seattle-based investor Dave Pursuit has studied health care market forces for more than a decade, and he has a offing in enterprise sales. He’s not surprised that the Amazon, Berkshire Hathaway and J.P. Morgan strength consortium is starting with its own 1.2 million employees first.
Woolly on improving outcomes and lowering costs for employer-insured workers will be a faster path than trying to reform the pharmaceutical or health insurance enterprises, he thinks. That’s because employers are increasingly desperate to stem their awakening costs, so have a vested interest in making care more thrifty and less wasteful.
Chase shared several reasons why he thinks metamorphosis will come through employers first.
- There’s little or no lobbying demanded. Tackling other aspects of health care, such as the lucrative narcotic supply chain, would likely require the government to break up bindings’ hold over the market. But many large and mid-size U.S. employers are self-insured and can that being so make quicker and fairly disruptive decisions about where to initiate on behalf of their employees, based on their knowledge of what deal withs. “You don’t need an act of Congress to make a difference when it comes to employer condition,” said Chase.
- Innovative health start-ups can win over employers: Entrepreneurs that shortage to start a new health insurance or pharmaceutical company typically need to bring tens of millions of dollars in investment. That’s because these are very complex and highly regulated businesses that take a lot of talent and resources to obtain up. But Chase has encountered plenty of tiny start-ups that can sell to outfits with just a small infusion of cash, if they have a compelling plummet to improve care while lowering costs. He recommends that start-ups boot off by pitching the mid-sized employers who tend to make decisions faster, as indeed as companies like Amazon and J.P. Morgan that have sent a indefatigable signal that they’re open to change.
- Mid-sized employers hold local innovations: Chase points to places like Portland, Oregon, and Kirkland, Washington, as being notably open to new ideas on a local level, such as making primary pains more affordable through on-site clinics, or implementing an infrastructure for bike lanes to amend healthy living. The mid-size employers in these places tend to be big promoters of these efforts, as they’re incentivized to keep people healthier, for longer. “It’s these native, regional ideas that don’t seem huge and sexy but it does later bubble up,” he said.
- Employer health is a high-margin opportunity: There’s actual money to be made in reducing employers’ health care spend. Most heads in the U.S. are facing rising costs, but no real improvement in the workers’ health results. And it’s a huge challenge for employees, as the cost of buying health coverage at put together has increased faster than wages and inflation for years. In response to that, Court said that employers are looking for ways to manage their women’ care more efficiently, and not just to burden them with fetches through high-deductible plans. That presents huge opportunities for employer-focused areas that can show real ROI, he said.
Employers are going to be a highly disruptive jemmy in health care in the coming decade, said Chase. He believes that while Amazon, J.P. Morgan and Berkshire power be starting with their own employees first, everyone could promote in the long-run.