Opinion: Companies’ New Healthcare Plan Unlikely to Create Major Change
An article published on The Balance website Jan. 8 asked and answered the question, “Why Reform Health Care?” The article cites several reasons why a health care reformation is necessary, including the escalating costs of health care and the fact that nearly 25 percent of the population has little-to-no health care coverage.
Less than three weeks after the article was published, Amazon, Berkshire Hathaway and JPMorgan Chase & Co. announced their partnership in a new health care initiative.
“We share the belief that putting our collective resources behind the country’s best talent can, in time, check the rise in health costs while concurrently enhancing patient satisfaction and outcomes,” Berkshire Hathaway Chairman and CEO Warren Buffett said in the statement announcing the partnership.
Despite the widely publicized announcement of the partnership, the companies have been vague about the specifics of the health care proposal itself. The released statement fails to explain how this new and independent health care company will actually function and sufficiently provide health care to the three companies’ nearly 1 million collective employees.
Will this independent health care company, established by three prominent corporations, launch the process of true health care reform in the United States? Probably not.
Because there is significant pressure on the government to ensure that all citizens have equal access to health care — a pressure which has severely contributed to health spending consuming more and more of the nation’s gross domestic product — some might applaud these companies for taking the initiative to independently provide health care for their employees.
It should be noted that the United States’ Constitution makes no assured provision for health care. While, for example, South Africa’s Constitution explicitly declares health care services to be a right, the United States Constitution does not guarantee the provision of health care to all citizens.
Nevertheless, the responsibility of providing health care to U.S. citizens has largely fallen in the realm of the public sector.
But while transitioning the provision of health care to the private sector might seem like a good idea, there are some drawbacks worth considering.
First, while these massive companies have extensive resources, they have no practical experience within the field of health care or insurance. According to the companies’ statement, “the group hopes to draw on its combined capabilities and resources to take a fresh approach to these critical matters.”
While the U.S. population is generally desperate for innovative approaches to a variety of public concerns and calling for reform left and right, expecting the private sector to transform health care seems unrealistic. According to the most recent reports from the National Health Expenditure Accounts, the U.S. spends over $10,000 per person on health care each year. How could corporations across the board possibly manage to cover this cost?
Another drawback of this proposal is the transition of citizens’ health care from the hands of the federal government to the free market. What happens when health care becomes a business? Currently, it is illegal for Medicare to negotiate drug prices, but within the private sector everything is up for negotiation, and certain dominant companies might develop a monopoly over certain drug companies which could drastically affect smaller businesses.
If many citizens today find health care too expensive and difficult to access, the capitalization of health care in the private sector could lead to even further inaccessibility for some citizens. While things might look good for Amazon, Berkshire Hathaway and JPMorgan Chase & Co. employees, home-grown businesses will be left to struggle and determine how to cover themselves and their employees in a highly competitive health care market.
Perhaps once this health care partnership has moved past the initial planning stages and the business model has been developed and articulated, it will be easier to predict the effects of it on society. Hopefully, whether expanded and improved by the government or transformed by the private sector, new approaches to health care in the U.S. will move in an optimistic direction.
Stiner is a news writer.