Late in 2016, I published a brief that urged the workers’ comp industry to be aware of the changes that affect the industry based on new technologies being applied in the medical field, and the possible implications of those changes.
Now this year, Amazon, JP Morgan, and Berkshire Hathaway have formed an alliance to transform healthcare delivery. Their stated reason is to take an ineffective system of delivery and transform it to respond to their employees without the burden of making a profit in the delivery.
It’s a new adventure by people with little experience in the field who have a strong track record of transformation and business success. They may not succeed at first, but Amazon’s “try, fail, learn, and succeed” model of innovation can’t be ignored.
Since workers’ comp still pays significantly less in medical treatments than the healthcare industry, it can only observe and prepare for the possible implications. The criticism of the healthcare industry by this group is focused on the expensive and inefficient way that healthcare is delivered. Who would argue that the same expenses and inefficiencies aren’t inherent in the delivery of workers’ comp as well?
So, what are some specific areas ripe for change?
Telemedicine. The adoption rate of this technology and delivery has been slow. People like to see their doctor, but they used to go into a bank to do transactions as well. If any industries have gotten their customers the interaction that makes them comfortable with internet and self-service experience it’s been banking and Amazon. Maybe the Telemedicine is now delivered on-site at the employer including workers’ comp related injuries. Imagine the employee walking into an on-site booth or office and have instant access to medical consultation and their claim reported as they sit down.
Drug pricing and distribution. This is an area already under change with companies like CVS buying Aetna and other forms of vertical integration the industry is undergoing change. CVS mini-clinics are could supplement the contraction of health services in remote rural areas hospitals close. What happens if, as intimated, Amazon gets into direct drug sales? If the distribution channel is disrupted at the same level as the retail market then this impacts drug manufacturers, drug retail, and BPM’s. Would there be a contraction in the drug industry and do these mini-clinics contract with it? These are all things which would impact workers’ comp medical delivery.
Reliance on paper. To date there has been no significant growth in electronic records or medical billing. Workers’ comp remains the red headed step child in this scenario and can’t create enough influence to move the needle. However, with the consolidation of providers into larger clinical settings, could a push from a collaboration of 1.3 employees provide enough incentive for providers to e-bill or be eliminated from consideration enough motivation to give this another consideration? The tech is already there this has always been an adoption issue. The Health Transformation Alliance is also very interested in this collaboration between Amazon, JP Morgan, and Berkshire Hathaway. This brings even more payroll employees into the picture. This makes life easier for carriers but may be an issue for those bill repricing services still very document based. It might be time to just have a friendly roadmap discussion with those providers of bill repricing.
The announcement of this alliance also came with a mission statement that called out the profit motive as a problem in designing an efficient healthcare payer. Adopting a not-for-profit stance provides a level of freedom to experiment. If this collaboration is successful, what keeps these companies from turning their attention on their workers’ comp expenses? Might the profit incentives of disability and workers’ comp give way to a true 24-hour coverage product?
As this effort by these three giants moves forward there is a lot to unravel. There is already skepticism about their chances to disrupt such a large ecosystem without government support. But even if they only accomplish some part of their mission, then insurers should expect many others to climb onboard and leverage their success. The advice is the same as it was in 2016. When healthcare sneezes, workers’ comp can catch a cold. And when healthcare is infected by Amazon, workers’ comp should pay attention.
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