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February 01, 2018 at 06:27 AM
One way to size up Amazon.com’s new effort to rethink U.S. health benefits is to look at the health benefits Amazon already offers.
The Seattle-based web retailer rattled Wall Street on Tuesday by announcing it will team up with Warren Buffett’s Berkshire Hathaway and JPMorgan Chase & Co. to create a health care benefits company to be described later.
(Related: Can Amazon Transform Health Care? It’s Not Crazy)
One of the few details available is that Beth Galetti, the Amazon senior vice president who signs Amazon’s health plan Form 5500 tax returns, will be one of the project planners.
Another detail is that Amazon, Berkshire Hathaway and JPMorgan Chase say their new health benefits company will be “free from profit-making incentives and constraints.”
Amazon Form 5500 filings show that Amazon already gets most of its health benefits from a company free from profit-making incentives and constraints: Kaiser Permanente, a giant, nonprofit managed care company based in Oakland, California.
Kaiser Permanente has been working to reform the U.S. health care delivery and finance systems since 1939. Many health policy watchers give Kaiser Permanente credit for making California hospitals cheaper and more efficient, on average, than comparable hospitals in the rest of the country.
Kaiser Permanente has obvious incentives to offer its own employees high-quality, efficient health benefits, and it has the expertise, size and access to capital to apply the latest tools and ideas to improving its own health benefits programs.
We’ve tried to get an idea of how Amazon might perform as a health benefits revolutionizer by comparing its health benefits with Kaiser Permanente’s benefits.
Roadkill Highway
One reason for trying to benchmark Amazon’s proposed health benefits project is that the carcasses of older projects litter the side of the health reform highway.
In the past 15 years, for example:
- Congress converted the medical savings account pilot project into the health savings account (HSA) program.
- Google tried, and failed, to do something about U.S. consumers’ personal health records chaos.
- The U.S. Department of Health and Human Services (HHS) lured many would-be health reformers to their financial doom by encouraging them to participate in the Affordable Care Act Consumer Oriented and Operated Plan (CO-OP) nonprofit health plan program.
- Walmart added $4 prescriptions, and it and other retailers made room for clinics.
- Google invested in Oscar Health, which is like a CO-OP that’s free from the regulatory chaos and restrictions at the Affordable Care Act program.
- Many organizations have come up with incentives and communications strategies to persuade people to eat fewer cookies and spend more time at the gym.
(Related: Guidance on HSAs, On the Third Hand: Google Winds Down Personal Health Record Project, ACA: Feds Seek Comments on Nonprofit Health Plans, Walmart Adds Patient Care, Walgreen Clinics to Handle Chronic Illness Care and Google Joins $81 Million Funding Round of Health Benefit Startup)
Some of those efforts are still under way, and some may still have a shot at improving the quality and efficiency of the U.S. health care delivery system, the U.S. health care finance system, or both.
Increases in health care costs have slowed in recent years, for example. Many health policy specialists say HSA programs and other programs that “give patients skin in the game,” or increase patients’ share of health care costs, have helped hold down spending.
Oscar Health and a few of the CO-OP carriers are still in business, and they grow up to revolutionize health benefits.
But producers can see that, as big and smart as Amazon managers might be, the company is taking a road that has shredded other large, well-financed organizations’ tires before.
The Form 5500s
Both Amazon and Kaiser Permanente give the public a peek into their health benefits packages when they file their plan Form 5500 reports.
Sponsors of many U.S. benefit plans must send copies of Form 5500 reports to the Internal Revenue Service and the U.S. Department of Labor (DOL) every year, to help the IRS and DOL enforce benefits-related tax and labor laws.
