Buffett, Bezos, and Dimon Launch “An Undertaking of Great Advantage” to “Innovate” in Health Care

“A company for carrying on an undertaking of great advantage, but nobody to know what it is.” –Prospectus for a joint stock company in (1720)

By Lambert Strether of .

Last week, Warren Buffett (Berkshire Hathaway), Jeff Bezos (Amazon), and Jamie Dimon (JP Morgan) have initated a venture that the AARP (itself in the insurance business) :

Amazon, Warren Buffett and JPMorgan Chase are forming a new company to address the health care costs of their employees, sending shares of health care companies down sharply across the entire sector despite the vague nature of the announcement.

Amazon’s Jeff Bezos said that he, along with Buffett and JPMorgan Chase, would attempt to make health care better for hundreds of thousands of their employees, and perhaps, eventually, the country.

There were few details, and those involved said the project is in the early planning stage.

(Since the project as yet has no name, and I have to call it something, I’m going to call it “the undertaking.”)

All the coverage I can find agrees on the “vague” character of the announcement (: “unclear”; : “did not elaborate on their strategy”; : “we don’t know much”); hence my strictures on “an undertaking”[1]. So, let’s look at the announcement, and try to dope out what we can from it. (Weirdly, has too many redirects; ). The first and second paragraphs (I’ve helpfully introduced numbers in square brackets where I will comment):

SEATTLE & OMAHA, Neb. & NEW YORK–(BUSINESS WIRE)–Amazon (NASDAQ: AMZN), Berkshire Hathaway (NYSE: BRK.A, BRK.B) and JPMorgan Chase & Co. (NYSE: JPM) announced today that they are partnering on ways to address [1]healthcare for their U.S. employees, with the aim of improving [2]employee satisfaction and reducing costs. The three companies, which bring their [3]scale and complementary expertise to this [4]long-term effort, will pursue this objective through [5]an independent company that is free from profit-making incentives and constraints. The initial focus of the new company will be on [6]technology solutions that will provide U.S. employees and their families with [7]simplified, high-quality and transparent healthcare at a reasonable cost.

Tackling the enormous challenges of healthcare and [8]harnessing its full benefits are among the greatest issues facing society today. By bringing together three of the world’s leading organizations into this new and [9]innovative construct, the group hopes to draw on its combined capabilities and resources to take a fresh approach to these critical matters.

[1] “healthcare for their U.S. employees”: Some coverage (e.g., , ) says or implies that the undertaking will provide insurance, but the press release doesn’t say that Buffet, Bezos, and Dimon are going into the insurance business. It says they’re going into the health care business; presumably the statement was carefully worded. Further, the undertaking will leave employer-based health insurance intact (“U.S. employees”).

[2] “employee satisfaction”: “Satisfaction” is not at all the same as health; “customer satisfaction” isn’t necessarily the best way to allocate health care resources; in pharmaceuticals, for example. And if you are measuring “satisfaction,” and you aren’t measuring health care outcomes, what results are you likely to get?

[3] “scale and complementary expertise”: Note that scale is not the scale of the employees served by the companies initiating the undertaking; . So scale must mean scale with respect to the problem to be solved (whatever it may be).

[4] “long-term effort”: In other words, not expected to become profitable in one quarter, or even several years.

[5] “an independent company that is free from profit-making incentives and constraints”: Much of the coverage (, ) says that the undertaking will be structured as a non-profit, but presumably if the writers of the press release had meant to say that, they would have. For example, “free from” could mean that the board was ideologically committed to profit not being a driver. Until it was. Further, that the undertaking itself does not profit does not at all mean that Amazon, Berkshire Hathaway, and JP Morgan will not profit, not only because savings will go directly to their bottom lines, but because they will be able to extract rent from the “technology solutions.”

[6] “technology solutions”: The undertaking may be “free from” the constraints of profit, but the rest of the health care system most definitely will not be.

[7] “simplified, high-quality and transparent healthcare”: I have to say I boggled a little bit at this. I don’t see how health care, as such, can be “transparent.” I can see how the process of delivering it might be, but not the care itself. What on earth can possibly be transparent about an appendectomy, or (taking things to the extreme, and assuming dental) extracting a wisdom tooth, or (moving to outright fantasy) therapy? The same goes for “simplified.” As for “high quality,” what’s the metric? Customer satisfaction?

[8] “harnessing [health care’s] full benefits”: What does this even mean? Benefits other than being cured, or staying well?

[9] “innovative”: Oh.

The last paragraph is as important as the first two:

The effort announced today is in its early planning stages, with the initial formation of the company jointly spearheaded by Todd Combs, an investment officer of Berkshire Hathaway; Marvelle Sullivan Berchtold, a Managing Director of JPMorgan Chase; and Beth Galetti, a Senior Vice President at Amazon. The longer-term management team, headquarters location and key operational details will be communicated in due course.

I’ll look at the personnel choices in section (2) below. (I’m not sure what “jointly spearheaded” might mean; surely a troika is an unusual management structure in the United States?)

(1) The Undertaking Is Not Single Payer

Since the undertaking is employee-based, it’s not single payer. So, while Sanders is correct to be hopeful (so we can hang failure round the undertaking’s neck later), single payer na ga happen:

Could this be the beginning of the American business community understanding that a not-for-profit Medicare for All, single payer system makes sense not only for the average American, but for the business community as well?

— Bernie Sanders (@SenSanders)

That’s unfortunate, because Warren Buffett, at least, thinks single payer is the best alternative from the standpoint of “bending the cost curve.” In :

JUDY WOODRUFF: Are we now at the point where the country does need to think about some sort of single-payer system in some form or another?

WARREN BUFFETT: With my limited knowledge, I think that probably is the best system, because it is a system — we are such a rich country. In a sense, we can afford to do it.

But in almost every field of American business, it pays to bring down costs. There’s an awful lot of people involved in the medical — the whole — just the way the ecosystem works, that there is no incentive to bring down costs.

JUDY WOODRUFF: And it sounds like you’re saying, with a single-payer system, it would be easier to figure out a way to get those costs down.

WARREN BUFFETT: It would be more effective, I think.

:

An independent health benefit company serving their employees, even if including the employees of a large conglomeration of other companies, could not adapt most of the beneficial features of a well designed single payer model. Most of the policy defects that result in the dysfunction of our health care financing would remain in place. As smart businessmen, the last thing they should want is to invest considerable effort and resources into a venture that proves pretty much for naught.

Rather than setting up yet another technology-based company wouldn’t it be better to begin with a group of experts who understand the health needs of patients and the community at large and the public policies that would deliver on those needs? But leave out those who place markets first such as the insurers, pharmaceutical executives, for-profit corporate executives and the like.

Lol no. At this point, we might deploy Thomas Ferguson’s investment theory of politics, and ask in which politician Amazon, Berkshire Hathaway, and JP Morgan invested their money. (although weirdly the Times-Free Press regards Clinton as “left wing”):

Berkshire Hathaway CEO Warren Buffett endorsed Clinton, campaigned for her and gave her the most money he’s ever given a candidate. And JPMorgan Chase was the fourth biggest corporate donor in the S&P 500 to Clinton’s campaign.

And we know what Hillary Clinton thinks of single payer:

So, framing the undertaking in political terms, one might speculate that our three squillionaires have decided to head off single payer themselves, since ( certainly ).

(2) Personnel Choices Show that The Undertaking Is an Important Initiative

The final paragraph of the press release listed a troika that would “spearhead” the undertaking: Beth Galetti, Marvelle Sullivan Berchtold, and Todd Combs. Let’s take each of them in turn. Each is, of course, in the corporate world, highly competent, and high in the heirarchy of three giant companies at the top of their game.

Beth Galetti: Gallette is head of Human Resources — — at Amazon. Speaking of :

Not only does Galetti have experience in recruiting for one of the most prominent tech companies in the world, she also has experience leading teams for huge projects. For example, while at FedEx, she led a team of 100 software developers for the package tracking system during the process of migrating the existing system to a new technology.

That’s genuinely impressive. In an interview with Galetti, :

Working during the busy holiday season was the highlight, trying to race with the other team members to serve the most customers. After a few months, I was promoted to shift supervisor.

I was the same way when I worked in the mills. Still, it’s pretty easy to see how “racing the other team members [sic]” scales up, at the Human Resources level, to the weeping, abused workers whipped on at “Hell Foods” (as Yves puts it), and in Amazon warehouses. No doubt she will bring the same approach to the undertaking.

Marvelle Sullivan Berchtold: :

Sullivan Berchtold joined JPMorgan in August after almost eight years at Swiss pharmaceutical giant Novartis where she most recently served as the global head of M&A.

While at Novartis, she represented the company in over $100 billion in transactions, according to her LinkedIn profile. Some of her high-profile deals include buying GSK’s Oncology portfolio for $16 billion and selling Novartis Animal Health to Lilly for $5.4 billion. In addition, she served as a board member for more than two years at GSK Consumer Healthcare, a joint venture between GSK and Novartis.

Hopefully, over in M&A, Berchtold was insulated from , , , , , and .

Todd Combs: Combs is a (there seem to be such officers):

And from Berkshire Hathaway is one of Buffett’s investment deputies, Todd Combs, a value investor who previously ran hedge fund Castle Point Capital for five years. Combs, who graduated from Florida State University and received an MBA from Columbia Business School, joined Berkshire Hathaway in 2010. He’s a member of JPMorgan’s board of directors. Combs estimates that he spends 80% to 90% of his time straight reading, whether it’s combing through SEC filings, scanning conference call transcripts, and devouring a couple of dozen trade magazines. For him, the reading commences when he gets into Berkshire’s offices on Farnam Street at 7 or 8 a.m.

(I like that Combs is a reader; this predisposes me toward him, which I suppose is a way of saying he seems suspiciously clean.) Interestingly, Combs :

In 2006 and 2007, as the bubble in credit markets grew, Mr Combs’s skills in spotting problem-areas started to become apparent. He found construction loans in Florida’s slowing real estate market and traced their origination to banks in the US mid-west, and identified financial firms that had large exposures to illiquid assets and were heavily reliant on short-term funding that could dry up suddenly.

Mr Combs profited by “shorting” the stocks of some financial companies as markets crumbled. By early 2006, Mr Combs had become downbeat about the prospects for Fannie Mae and Freddie Mac, the mortgage lenders that two years later would run into deep trouble and be rescued by the government.

His short positions on financial shares helped him through the financial crisis and market-meltdown, though he didn’t emerge unscathed. Mr Combs suffered losses of a little more than 5 per cent in 2008.

Combs is also on JP Morgan’s board. Interestingly, Combs ; I’d say that’s an indication that Berkshire Hathaway takes the undertaking very, very seriously.

(3) Speculation: The Undertaking Will Be a Platform

Now, I have to admit that “It’s a platform” reminds me of “It’s a baby” in , given Silicon Valley’s proclivity for ruthless, Robber Baron-style rent-seeking on the platforms it controls:

That said, let’s look at why we might come to such a conclusion. Here’s how The Times describes some :

One potential avenue for the partnership might be an online health care dashboard that connects employees with the closest and best doctor specializing in whatever ailment they select from a drop-down menu. Perhaps the companies would strike deals to offer employee discounts with service providers like medical testing facilities.

Erik Gordon, a professor at the University of Michigan’s Ross School of Business, predicted that the companies would attempt to modernize the cumbersome process of doctor appointments by making it more like booking a restaurant reservation on OpenTable, while eliminating the need to regularly fill out paper forms on clipboards.

On the surface, the dashboard and the dropdown are as banal and misconceived as Obama’s vision of how ObamaCare’s “marketplace” would work: “just like you’d buy a flat-screen TV or plane tickets or anything else you’re doing online.” For example, the dropdown assumes that patients have already self-diagnosed. You aren’t going to want to pick “hypertension” off a [family-blogging] drop-down menu, and I very much doubt a software developer is going to choose “ringing in the ears,” or “shortness of breath” as menu items. Ditto the “funny mole” menu item for the case of cancer, right? Honestly, what are these people thinking?[2] Similarly for Gordon’s galaxy-brain concept of making booking a doctor’s appointment like making a restaurant reservation, which takes no account of narrow networks, for starters (and also involves an Amazon-style workforce; I know someone who ruined their health at an OpenTable call center).

Looking deeper, we might move past the widget perspectives of dropdown menus and OpenTable-style screens, give the undertakers the benefit of the doubt, and imagine from a business perspective what the undertaking would look like if Galetti succeeed in project management as she did at FedEx, Berchtold picked up the right small companies in Silicon Valley as she did when she was doing M&A, and Combs reads the right sources. I’d speculate the undertaking would be a platform (like Amazon, or Facebook, or Twitter, etc.) From :

What is “this”, though? [“This” being the undertaking.]

  • Amazon builds out “interfaces” for its employees (as well as those of Berkshire Hathaway and J.P. Morgan Chase — I’ll just refer to Amazon from here on out), both digital and physical, to access basic healthcare needs; these sit in front of pharmacy benefit managers (PBMs), insurance administrators, wholesale distributors and pharmacies.
  • Amazon starts building out infrastructure for those healthcare suppliers, requiring them to serve Amazon’s employees using a standard interface.

Amazon could then go in one of two directions. First, Amazon could start to backwards integrate into its suppliers’ business; there are hints the company is already , and the says the idea was broached. That said, I actually think this is less likely; insurance operates best at more scale, not less: first and foremost, the larger the pool, the more risk can be spread, as well as obvious efficiency gains in administration. More scale also gives more bargaining power over other parts of the healthcare chain. Three companies, large though they may be, aren’t going to be as effective as large insurers, no matter how well-managed they may be.

What would make more sense to me is that, having first built an interface for its employees, and then a standardized infrastructure for its health care suppliers, is that Amazon converts the latter into a marketplace where PBMs, insurance administrators, distributors, and pharmacies have to compete to serve employees. And then, once that marketplace is functioning, Amazon will open the floodgates on the demand side, offering that standard interface to every large employer in America.

This is certainly ambitious enough — basically intermediating U.S. employers and the U.S. healthcare industry — but in fact this only sets the stage for the wholesale disruption[1] of American healthcare. First, Amazon could not only open up its standard interface to other large employers, but small-and-medium sized businesses, and even individuals; in this way the Amazon Health Marketplace could aggregate by far the most demand for healthcare.

Consolidating demand by offering a superior user experience is how aggregators gain power.

Of course, “having first built an interface” and “a superior user experience” are very much in “assume a can-opener” mode; see the discussion of the “Funny Mole” dropdown, above. Nevertheless, from the business perspective, given the can-opener, it’s very much in line with how Amazon operates generally, as well as being in line with the press release describing the undertaking:

[T]he scenario that I sketched out above is wildly profitable, to be sure, but only years down the road when demand is fully aggregated and Amazon Health Marketplace is taking a skim off of every transaction; if short-term profit isn’t the goal, long-term goals become much more realistic.

(4) Speculation: The Companies Involved in The Undertaking Show the Potential Issues with Platform

Assume the platform sketched above, and consider that the troika ultimately reports to Bezos, Buffett, and Dimon. What would these three executives like to see from the business perspective? Here, we can only speculate based on past performance. First, to repeat from Stratechery:

… taking a skim off of every transaction…

I’m sure each executive would like to see that (and the “skim” is why there must be no single payer, even though, as Buffet accepts, single payer would be “most effective” at cutting costs, partly precisely because it eliminates the skim!). But looking at each individual Robber Baron executive:

(A) Dimon would like to see accounting control fraud. From Bill Black, on Dimon’s role at JP Morgan during the Great Financial crisis:

What Dimon actually did was to vastly expand JPM and use executive compensation systems for the officers and employees that created the perverse incentive systems that gave him “plausible deniability” while enriching him by inducing endemic accounting control fraud. Many of these frauds cost JPM billions of dollars rather than enriching them, but others do create very large profits. [Stanford’s expert in executive compensation, David Larcker] could not be more wrong that in his bland assurance that paying Dimon in a manner that “aligned” Dimon’s interests with those of the shareholders he was enriching through JPM’s frauds would be a good thing for the world.

(B) Buffet would like to see financial predation: Yves writes:

I’m sure readers can add to this antidote to the pervasive Warren Buffett hagiography in American media. For instance, Buffett lavishes praise on the executives of Wells Fargo, when Wells engages in abusive servicing (see here and here for examples). So Buffett is part of the cohort that has held bank leaders as competent and deserving of their leadership roles, which serves to hide the fact that a big chunk of industry profits rests on predatory behavior, like gotcha terms in checking accounts and credit cards.

:

It is just one in a pattern of deceptions that Clayton has used to help extract billions from poor customers around the country — particularly people of color, who make up a substantial and growing portion of its business.

The company is controlled by Warren Buffett, one of world’s richest men, but its methods hardly match Buffett’s honest, folksy image: Clayton systematically pursues unwitting minority home buyers and baits them into costly subprime loans, many of which are doomed to fail

Of course, the undertaking’s platform wouldn’t do anything like that. Right?

(C) Bezos would like to see an abused workforce: Yves writes again:

It’s bad enough that Bezos engages in the worst sort of class warfare and treats warehouse workers worse than the ASPCA would allow livery drivers to use horses. Not only do horses at least get fed an adequate ration, while Amazon warehouse workers regularly earn less than a local living wage, but even after pressure to end literal sweatshop conditions (no air conditioning so inside temperatures could hit 100 degrees; ), Amazon warehouse workers are, thanks to intensive monitoring, pressed to work at such a brutal pace that most can’t handle it physically and quit by the six month mark. For instance, from a 2017 Gizmodo story,

Reminder: These are “human resources” issues. Beth Galetti is head of HR at Amazon. (Of course, Bezos gets the skim as well; perhaps the employee abuse is merely the fun part.)

Yes, “would like to see” implies the requirements, specification, and implementation need to be carefully done. Certainly, at Uber, everybody knew what Kalanick liked to see, and acted accordingly. Whether it was openly stated or not.

Conclusion

Readers know that I apply a hermaneutic of suspicion to squillionaires with bright ideas, and here we have three of ’em, with the same idea, or at least an idea to have an idea. Turning the mic over to Maciej Cegłowski:

Given this scary state of the world, with ecological collapse just over the horizon, and a population sharpening its pitchforks, an important question is how this globalized, unaccountable tech industry sees its goals. What does it want? What will all the profits be invested in?

What is the plan?

The honest answer is: rocket ships and immortality.

I wish I was kidding.

The best minds in Silicon Valley are preoccupied with a science fiction future they consider it their manifest destiny to build. Jeff Bezos and Elon Musk are racing each other to Mars. Musk gets most of the press, but Bezos now sells $1B in Amazon stock a year to fund Blue Origin. Investors have put over $8 billion into space companies over the past five years, as part of a push to export our problems here on Earth into the rest of the Solar System.

As happy as I am to see Elon Musk and Jeff Bezos fired into space, this does not seem to be worth the collapse of representative government….

The circumstances that have given the tech industry all this power will not last long. There is a limited time in which our small caste of tech nerds will have the power to make decisions that shape the world. By wasting the talents and the energies of our brightest people on fantasy role play, we are ceding the future to a more practical group of successors, some truly scary people who will take our tools and use them to advance a very different agenda.

To recap: the Internet has centralized into a very few hands. We have an extremely lucrative apparatus of social control, and it’s being run by chuckleheads.

I hesitate to say that an IT system that depends, for its success at the patient level on a menuing system with a “Funny Mole” drop-down falls under the heading of “fantasy role play.” After all, Galetti, Berchtold, and Combs aren’t dumb, they will have squillions to spend, and they will be able to hire the best. Nevertheless, that Buffett says, out loud, that single payer is “more effective” at cost control, and yet pursues a “technology solution,” as opposed to the political solution he could equally well fund, should be a ginormous honkin’ red flag that there’s nothing other than bad faith at the root of the undertaking. So, “innovate” away….

NOTES

[1] Whatever else it may be, the initiative is unlikely to be “disruptive” (despite headlines , , and , for starters). Here is the how the , where the term was coined, defines the term:

“Disruption” describes a process whereby a smaller company with fewer resources is able to successfully challenge established incumbent businesses. Specifically, as incumbents focus on improving their products and services for their most demanding (and usually most profitable) customers, they exceed the needs of some segments and ignore the needs of others. Entrants that prove disruptive begin by successfully targeting those overlooked segments, gaining a foothold by delivering more-suitable functionality—frequently at a lower price. Incumbents, chasing higher profitability in more-demanding segments, tend not to respond vigorously. Entrants then move upmarket, delivering the performance that incumbents’ mainstream customers require, while preserving the advantages that drove their early success. When mainstream customers start adopting the entrants’ offerings in volume, disruption has occurred.

(Apple taking on the IBM mainframe with the Apple II would be an example of disruption.) Whatever Buffet, Bezos, and DImon are doing is unlikely to have the characteristics listed here.

[2] They’re thinking they already have their own personal doctors, and that won’t change. That’s what they’re thinking. Drop-downs are for proles.

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.

80 comments

  1. audrey jr

    Thank you, Lambert. OMG.
    These tech lords and their partners in crime – literally, in crime, – such as “Uncle Warren” will be the death of us. And they will rub their little hands together in glee as they watch it all unfold from their private islands and yachts.
    And don’t get me started on R. Branson and his and UK elites plans to decimate what remains of the NHS.
    This stuff needs our rapt attention.
    This is truly a life and death situation.
    No soup for you, plebs.

      1. Craig H.

        According to one of Silicon Valley’s favorite investment gurus (Mark Spitznagel) the most accurate translation of their favorite word (entrepeneur) is undertaker. Google translate has that as a secondary definition, not the first. But they do have it on the page.

        Any professional French-English translators care to chime in?

        1. paul

          seulement une petite école française de 40 ans mais;

          I read it it as between taker, which english would read as middle man.

          Middle men had a rather patchy image, so the using dashing, exotic french phrase was encouraged de haut en bas.

        2. visitor

          French “entrepreneur” has the meaning you expect: somebody who engages in and leads a business endeavour. The word alone can also specifically refer to a building or construction business (the context makes it usually clear).

          Undertaker (as in funerals) would be “entrepreneur de pompes funèbres”.

    1. Mark P.

      Jeff Bezos and Elon Musk are racing each other to Mars. Musk gets most of the press, but Bezos now sells $1B in Amazon stock a year to fund Blue Origin. Investors have put over $8 billion into space companies over the past five years, as part of a push to export our problems here on Earth into the rest of the Solar System.

      No. They are not racing each other to Mars.

      Whatever Elon Musk tells you and whatever you’re naive to tell yourselves about how those guys in Silicon Valley are all really nerd narcissists at bottom, they — particularly Bezos and the people underwriting him to the tune of $1 billion annually — are not building a generation of super heavy-lift launch vehicles (SHLLVs) as big as or bigger than the Saturn V —

      — to pursue some nerd fantasy of going to Mars with no payoff. It’s business.

      The business is asteroid mining. Whatever private operator does it first — Bezos, possibly — is likely the world’s first trillionaire.

      There’s always plenty of people on NC talking about the limits to growth on one planet, aren’t there? Well, Bezos, Musk, etc. know all that, too. Consider capturing a chunk of lithium equal to the whole planet’s current supply for batteries, shunting it into Earth orbit, and then delivering it down the Earth’s gravity well in measured portions that don’t crash the global economy completely, but do give you control of it. Same goes with platinum, copper, gold and other substances.

      That’s what the money going into private space programs is primarily about. That’s also why, forex, the Congress Asteroid Act of 2014 —

      1. Oregoncharles

        Now, THAT’S science fiction. The vision has been around for decades, a fundamental justification for the space program: move essentially all polluting industry into space, leaving the Earth as a garden/park. Virtually limitless solar energy; vacuum itself is worth a great deal, and unobtainable on Earth. So is weightlessness; for a trivial example, you can make perfect ball bearings.

        People can’t really live in space, because of both weightlessness and radiation, so there goes a big part of the vision. That’s what robots are for. Highly plausible, I’d say; what do you think they grew up reading?

        1. visitor

          I have always been skeptical about those grand asteroid exploitation schemes, just from the perspective of the balance between energy and materials expended, and the possible benefits from mining what are commodities.

          1. Andrew Dodds

            It depends on how much you can automate. Also, some metallic asteroids have serious amounts of rare metals (gold etc) – things that take huge amounts of time and effort to obtain on earth as it is.

            The bulk stuff is worth more in earth orbit.. try costing 10000 tonnes of iron components to build a decent sized space station.

        2. Paul Harvey 0swald

          Lambert – always love your healf care tracts. I was puzzled by “hermaneutics” so I tried to look it up. My Merriam Webster app does not “suggest” an alternate spelling, only “no such word”. Anyhoo, “hermeneutic” does not have an “a” in it. Maybe this is addressed further down; I am only so far in the comments.

          1. blennylips

            urbandictionary.com defines it as

            The study of men who have multiple private adulterous affairs and then have a go at public office while wearing an Indian Jones hat.

            Did you see Herman Cain wearing that Indian Jones hat on Fox and then he denied those women he financially and physically assisted? No… Well, you better study up on your hermaneutics!

            Ah, such innocent, good times…

        1. cgeye

          ah-henh….

          forex, we know what’s on the tape deck and in the driver’s seat, but what
          telemetry is in the car itself?

          if I were a billionaire, hells yeah, I’d make my probe telegenic (and any signals back to me, deeply encrypted)

      2. oh

        These crooks will farm the system to extract from the public till for their wild schemes, much like most of the businesses that Elon “owns”, I’ll betcha that grabbing a big share of Medicare funding is in the plans of Bezos, Buffett and Dimon.

  2. Louis Fyne

    Big data-AmaBerkChase will soon wring more efficiencies as human doctors are often too optimistic about a person’s chances of survival. hooray for probability!

  3. Rosario

    Riddler, Joker, and Two-Face have an undertaking.

    Thanks for the good overview. Even if am feeling a dash more hopeless on the prospects of single-payer. In a well adjusted society this “benevolent” trio would be laughed (at the very least shouted) into their hideouts immediately.

    1. WheresOurTeddy

      Bezos, Buffett, Dimon…I count 3…don’t the horsemen of the apocalypse come in a 4-pack?

      Or maybe Bezos is Conquest, Dimon is War, Buffett is Famine, and they combine together like a Transformer to collectively become Death?

  4. John

    Just as Anka Warren saw the skim possibilities by getting into railroads as fracking was coming online…the grifters see the possibility of skimming from a 17% of GNP (healthcare cost) pool. Damn, that’s a lot of money and isn’t particularly tied to the stock and bond market.
    I think your “control the inputs” techdicks and auto driving is the relevant thing here. Only healthy serf/sharecroppers need apply. Ones that slip thru the cracks will be subjected to the Republican’s working on Medicaid plan.
    Once Big Ag gets into the game, it will be Soylent Green for sure.

  5. Bugs Bunny

    Some of this will involve implanted and wearable IoT medical devices (totally unconnected in manufacture or ownership to the Undertaking itself, natch) that send data to the Undertaking platform. Voilà your transparency. The Undertaking will have a transparent view of what’s up in your body. Prime Undertaking members can see a doctor this evening.

  6. HopeLB

    After campaigning for Pittsburgh, Pa. Mayor, Bill Peduto, I was greatly disappointed when he caved on his promise to revoke UPMC’s tax free status, when he endorsed Hillary and then when he refused to allow the citizens to know what he offerred Amazon for locating their HQ here, but now I see that Bezo’s plan might just involve a borgish ingestion of the “non-profit” UPMC. Maybe, Peduto too, plays 11th dimensional chess? (Doubt it.) The news station, WTAE, got a court order forcing Peduto to publish the offer. It would be great if it has a picture of UPMC on a platter?

  7. dcblogger

    Berkshire Hathaway is Ted Cruz second largest contributor, right after Goldman Sachs. So while Buffett cultivates in image of enlightened billionaire, Berkshire Hathaway’s political contributions tell a very different tale.

    1. integer

      Cruz was just the insurance policy, and probably only because low energy Jeb! got taken down so early in the R party primary. Anyone but Trump, right?

      While I’m here I might as well add that although I’d like to say that I can’t believe Sanders is entertaining this bs, it is all too easy for me to believe. Notice how much friendly coverage he is getting lately from the corporate liberal media? Well, it wouldn’t be happening if Clinton was president, that’s for sure. In my opinion Sanders is currently being used as a pawn by the anti-Trump establishment, and will be coldly discarded once he has served his purpose to them.

      Of course, it is possible that he is playing his own game, understands this dynamic, and plans to use it to achieve his own ends, but at this point I seriously doubt that he is sophisticated enough to play that game effectively, assuming he even understands what is going on, and his recent Russia bashing and defending of the intelligence agencies make me seriously doubt that assumption. Being involved in something for a long time doesn’t automatically mean that someone will end up with a superior understanding of what it is they’ve spent all that time doing. Inertia is a b!tch (see Newton’s first law of motion).

      Lastly, if “the undertaking” gets off the ground, expect to see one of the biggest IPOs ever. Just because it is nominally non-profit doesn’t mean that the founders won’t be making a lot of money from it. See:

      How Amazon’s Accounting Makes Rich People’s Income Invisible Cfdtrade (originally posted at Angry Bear)

    2. Lee


      Berkshire Hathaway Top Recipients 2016 cycle

      Chamber Member Amount
      President Clinton, Hillary (D) $118,075
      President Trump, Donald (R) $53,138
      House Ryan, Paul (R-WI) $51,690
      House Shuster, Bill (R-PA) $42,700
      Senate Cruz, Ted (R-TX) $36,826
      House Young, Todd (R-IN) $36,350
      Senate Murray, Patty (D-WA) $31,250
      Senate Sanders, Bernie (D-VT) $29,413
      Senate Blunt, Roy (R-MO) $29,200
      Senate Wyden, Ron (D-OR) $25,964
      Senate Moran, Jerry (R-KS) $25,800
      Senate Hoeven, John (R-ND) $23,990
      House Williams, Roger (R-TX) $23,300
      House Denham, Jeff (R-CA) $23,000
      House Conaway, Mike (R-TX) $21,500
      House Van Hollen, Chris (D-MD) $19,750
      Senate Ayotte, Kelly (R-NH) $19,700
      House LaHood, Darin (R-IL) $19,500
      House Moulton, Seth (D-MA) $19,100
      Senate McCaskill, Claire (D-MO) $19,000
      See all recipients

  8. Amfortas the Hippie

    the use of the word “Trident” in reference to the three wunderkind stuck in my mind.
    here’s a little wiki:”A fork Jewish priests (Kohanim) used to take their portions of offerings”

    Ignore the Jewish part, and it sounds about right.
    Here’s the Hindu version:”When looked upon as a weapon of Shiva, the trishula is said to destroy the three worlds: the physical world, the world of the forefathers (representing culture drawn from the past) and the world of the mind (representing the processes of sensing and acting). The three worlds are supposed to be destroyed by Shiva into a single non-dual plane of existence, that is bliss alone.”

    again, sounds about right, given who it is that’s having this idea about having an idea.
    I’ll lay odds on Bugs Bunny’s comment about chip implantation being a big part of this endeavor.
    Ever been to a lot? Cattle auction?
    The sad thing is that the Dems will jump right on this wagon, and attack anyone who offers reservations.
    And once we’re all chipped and intimately surveilled,(maybe with a little VR Soma for the unruly), then they can turn the key on Skynet, and bob’s yer uncle.
    If I were part of the Galactic Confederation, I wouldn’t let us out of the Sol System either.

  9. Duck1

    Well we all know there is an ex-CEO who is dying to undertake (I mean disrupt) the economy, so that it all slides into his pocket. No profit objectives are necessary, it is all pure skim. We can have an uber health care system as long as the employees are transparent to their masters via a digital panopticon. We need to invite Mark to this party, maybe meet at Bill’s pad, that will give us a sheepdip in terms of well publicized philanthropy. We need a smiley face, maybe a certain former president . . .

  10. Emorej a Hong Kong

    The careful wording in the press release could be a head-feint from the obvious:

    1. Dimon has overflowing cash in a world of inflated asset prices.

    2. Buffet knows better than anybody that insurance is the best deployment of a portfolio’s excess cash.

    3. Bezos has data on the time of day and duration of every individual insurance applicant’s (a) hovering over an advertisement for treatment of any symptom, (b) sleeping patterns, (c) responsiveness to different pricing strategies, and (d) risk tolerance.

  11. JTMcPhee

    So, are we to address Bezos, Buffett and Dimon as “The Undertakers?”

    Not funny of course. The truth hurts?

    Is it just me, or has a lot of arch snark and punning invaded the discourse here, making it sound distressingly closer to “other lefty and righty sites?” Understandable, given the enormity of the current situation and trends, and the enormous tasks facing any decent, good-hearted people wanting to make things better for everyone and the planet?

    1. Duck1

      I have not been able to identify the correct rope to buy that will cause the edifice to collapse
      Still looking

    1. Yves Smith

      FWIW, reinsurance is pretty much only done in property and casualty…the biggest monoline, MBIA, had a captive reinsurer which only helped it blow up faster.

  12. JBird

    Okay, I got nothing to add except why can everyone else have a functional health care system at half the price? Personally it really would be helpful for me to have such a system. Hell, my better half might still be alive.

    Just why are so much of our elites against single payer or something like it? They are not all beholden to the medical/pharma/insurance blood squid. Healthcare is the one unpredictable, unplanable, costly thing that almost requires some form of government intervention regardless of one’s ideology. But noooo, we cannot solve the problem, but we really must instead have exciting and cooool disruptions and innovations. Whatever those are.

    My life and the lives of my loved ones are being decided by fricken children.

    1. economicator

      Not by children. More like by mouth-breeding Machiavelli’s (borrowed that from Chris Lehman, I believe)

      (couldn’t resist piling on)

      1. economicator

        Sorry, “mouthbreathing” of course, and “Machiavellis”. Long day, easy to slip into bad habits.

          1. wilroncanada

            Lambert
            Mouth-breeding is also fine.
            The minute any one of them opens his mouth, we’re f****d.

  13. CalypsoFacto

    another idea which occurred to me prior to the health markets platform was more consumer-focused (the employees shopping for the health care) – a unified ‘neutral, authorized, safe’ platform for your personal health data. This could be augmented/enhanced by the market to shop for healthcare, like incentives based on opting-in more data or dr/service promotion. you ‘own’ your health care history and records (helpfully fed in from the crappy health systems your health care provider uses) which are stored in The Undertaking and depending on your history/data markers and whatever the algorithm wants cheaper/more profitable groupings can be made between end users and health care providers and insurance providers and anyone else who’d like to pay to play. The illusion of choice is maintained and the right people make a profit. Plus a centralized data store is easier to both monetize and hook into whatever government agency so desires.

    1. Lambert Strether Post author

      I’m not sure that shopping for health care is even possible, certainly online.

      What triggers somebody to seek care is not a diagnosis but a symptom; the diagnosis only comes after they’ve entered the system. It’s as if they were trying to build a shopping site based on consumer desire, as opposed to products. Everything is (relatively) easy when you know what the user wants. And if you don’t?

      1. CalypsoFacto

        Certainly agreed that even if it isn’t possible it shouldn’t be! What squicks me as a tech worker is this sentence in the press release:

        The initial focus of the new company will be on technology solutions that will provide U.S. employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost.

        The supposed . So that idea – a person owning their medical history and records independent of health service provider – is already firmly seeded in the cultural ether. There is also the rise of ‘health analytics platforms’, like Watson for Health and whatever fresh hell the bitlords are cooking up, systems that apply sorting/classification/association/whatever algos against whatever data set, looking for meaning. so a somewhat less ambitious goal, like a health insurance market platform + consumer-facing tools for persisting and sending/receiving user health data, is doable for Amazon/AWS’ resources.

        There is likely an assumption that this would be primarily for optional services or things which you’ve already gotten a quote for – the ‘second opinion/find a better deal’ by going to The Undertaking and searching for another provider for your optional surgical procedure, like removing some suspect moles. Your ‘normal’ doctor wants $2500 for the procedure but The Undertaking sees that your insurance can get a better deal from this other doctor across town and sends you a notification via the platform that it will be a mere 2200 at that Dr with this promotion. The Undertaking will even ship your records there so it’s painless for you as a consumer and your normal Dr will have the data shipped back to his crappy records system afterwards.

        Again, I am SO NOT IN FAVOR OF THIS but I’m a pretty standard mid-level tech worker and I spun this idea from existing work I’m familiar with. Just because it’s not a good idea doesn’t mean some jacka** in product development doesn’t think it should be done.

  14. bob

    Please, go ahead and capitalize it!

    The queen said she’ll allow it. This time.

    The monster truck people were all about it when they heard the queen was onboard.

    The WWE only wants 20% of revenue, and 50% of all concessions.

    The Undertaking: finish them!

  15. Anarcissie

    If you know anything about down-home street-level medical practice, you know that there is already a mighty lot of skim, and 17% of the GDP is a huge, huge handle to skim from even before you starting wringing out the product. It’s not surprising that Bezos, Dimon, and Buffett would go after it. The real problem at this point for the troika are those already skimming; they will fight tooth and nail to keep what they’ve got. I’m wondering if this upcoming factional war could be used advantageously by the rest of us somehow.

    1. Yves Smith

      Aside from overpriced drugs, I don’t know what you mean by “skim” once you back out the extra admin costs due to our insurance model, which have been estimated to account for as much as 30% of total healthcare costs when you factor in the admin burden on MDs. That is getting worse, if anything, with cumbersome electronic health care records, as we’ve documented, which are all about billing. Given how Bezos is mis-managing the comparatively simple Whole Foods, you really think he can being to come up with better IT for doctors? Tell me how he gets rid of procedure and diagnosis codes, which I believe are also embedded in Medicare and Medicaid billing (yes, there are upcoding abuses if that is what you are referring to, but my impression that that occurs mainly at the hospital level, not the MD practice level).

      The big problem with US health care is pay per procedure, which creates bad incentives, the fact that patients in the US have been conditioned to demand too much of doctors (made worse by pharma marketing which trains them to ask for drugs), and MD fear of suits if they do too little testing and intervention. This is the perfect environment for macho interventionism, as in overtreatment. And this is not just “skimming”. Recall, for instance, how many women went batshit when told if they had clean mammograms (which are a terrible test, don’t get me started on that) for a certain # of years, they needed to get them only every 3 years. They reacted as if the medical system was conspiring against them to put their health at risk.

      I spent a couple of years in Sydney, and I thought the medical care there was on the same level as the US (actually better when you think of the system, as in much more equality of access). One big difference was doctors there were much more of the “wait and see” school than in the US: “Let’s keep monitoring this before we decide to do anything.”

      That is a long-winded way of saying that seeing this as a “skimming” problem (aside from the high costs imposed by insurance middlemen) is the wrong window. We have a much more basic problem in terms of the structure of the entire system, starting with the fact that health care is massively subsidized, from the NIH through to the fact that if you are employed, your medical insurance and payments aren’t taxed. Did you miss that one? Bezos et al tinkering with it (and all they will be able to do is tinker) isn’t going to change much.

      In fact, chew on this one: those insurers, perversely have been the impetus for evidence based medicine. They actually have been trying to fight some of the unwarranted, low success rate interventions by refusing to pay for them (and funding the underlying research). The proof is that dentistry, which is generally not insured in the US, is 50 years behind medicine in terms of the research supporting it (and mind you, this is with the areas where there has been enough large scale studies in medicine to reach pretty solid conclusions still very spotty). One example: dentists still strongly advocate flossing when there is virtually no evidence to support the idea that it is helpful (see here, for instance: )

      1. Lee

        Acupuncture has been debunked but when I had Aetna they would cover it. Some private insurers also cover naturopaths and other forms of woo variously categorized as alternative, integrative or complementary medicine. Major medical institutions such as Stanford and UCSF offer such treatments. Wisely, IMHO, Medicare does not.

        1. Yves Smith

          Cigna paid for my acupuncture for a while, then lied about what they had done previously to a state regulator. Acupuncture does seem to provide some relief from inflammation. I’ve experimented a lot with dietary supplements and some alternative therapies.

          One of my big beefs is that there are lots of treatments that fall into the category of “experimental medicine” as in they are in the medical realm but there isn’t enough money to fund really large scale trials because the treatment/medication can’t be patented. DMSO, for instance, is a phenomenal anti-inflammatory and is used widely on horses. Extremely low toxicity but you have to be careful re how you apply it. I’ve also gone on at some length re how there is a lot of evidence to support the idea that supposed auto-immune diseases (and there is no actual medical evidence consistent with the idea that they are “auto immune” diseases, that theory was made up after WWII when a new class of drugs came out that could suppress symptoms) are the result of a pathogen that can be treated with…drumroll…tetracycline, an old, cheap, very low side effects antibiotic. So of course there is no money to try to prove that out.

          1. IsotopeC14

            Hi Yves,

            Fundamentally, if something like Tetracycline would cure a supposed autoimmune disease, just eating fish in the 1970’s probably would have cured it (They used it to drastically increase fish shelf-life). That being said, when going the doctor for an unrelated infection, the antibiotic would likely be an obvious cure, if that were truly the case.

            I think it’s critical to realize that we actually don’t know much about microbiology and the complex reactions between different little guys that inhabit us, and our surroundings.

            There is a class of poorly understood organisms called “Mycoplasma” and these can and do infect tissue culture cell lines used in research. Some are certainly pathogens, but that stems from the bias in the theory of “one organism, one disease” and it must be isolated in the lab.

            We now know that some lichens are three organisms.

            We don’t know how many diseases are actually an interaction between two or more organisms. With MS it looks like there might be a correlation with Epstein-Barr Virus, and who knows what else, perhaps a mycoplasma that has not yet been identified, or a normally harmless prion carried by deer?

            Fundamentally in a market-based economy, anything complicated and/or “basic science” is not “profitable” because funding is high-risk, even if it would drastically improve human health. I recommend strongly looking into the story of cisplatin. This accidental discovery while working with bacteria, revolutionized prostate cancer treatment.

            I fully agree with you regarding the patent baloney. When Salk said “Can you patent the Sun”, he really spoke to the incredible good that can come from humanity when science is left to solve problems in its own way. Unfortunately science, has been destroyed by capitalism, as the recent article here pointed out. Matt Stoller also had a nice recent tweet regarding that we’ve turned our scientists into grant writers.

            I’d further argue that our best scientists never even make it to the point of being great grant writers. Great scientists don’t have the patience to kiss-the-bureaucratic (family blog) to succeed in begging-for-money careers.

            I can’t remember which C-span politician was complaining about funding science, but they specifically stated that NO funding would be permitted for basic science in a particular bill.

            This is the honest state of the market-based economic system we are in. Stalin did this too in the USSR, because of opposition of western genetics. He was wrong, and as a result, molecular biology floundered for generations, and still does to some degree in Russia.

            Once all the scientists leave the country, or end up working at Starbucks, who will teach the next generation how to create the next vaccine?

            1. Yves Smith

              No, to treat the supposed auto-immune diseases, you need a very particular pattern of dosing, as in high doses but not daily, I don’t’ know the details not having done it. You get pathogen die-off. No one would get enough by eating fish or in the right pattern.

              The protocol in question has a pretty solid track record. Most people who follow it are symptom free in two years. But in the first six months or so, you don’t see any net improvement in most cases because you get a Herxheimer’s reaction, as in side effects from pathogen die-off (see here for one discussion: ).

              The length of time of treatment is another big impediment to a clinical trial. Most clinical trials are only four to eight weeks. The longer they go, the greater the cost. A one year clinical trial would be vastly more expensive than even the normally costly clinical trial.

              1. IsotopeC14

                I’ll have to look into this more. I’m normally quite a lot less interested in what the organisms do to people, much more interested in the organisms themselves. I do have interest in Lyme’s Disease though. Spirochetes are fascinating organisms since they have an intracellular movement mechanism.

                I know so many people that are doing “Servant Economy” jobs with degrees in Biochemistry. Why the potential of so many is being so wasted by the oligarchy speaks volumes about what they deem necessary. Bezos could afford probably 5000 clinical trials, and yet will fund zero.

                How anyone can justify human health and well-being with dollars or euros or chunks of shiny metal evades me.

              2. Andrew Dodds

                Speaking as someone who has a fairly dramatic and life threatening autoimmune condition, I’m a bit skeptical. For post-infective arthritis, simply waiting a coupe of years can be curative; this would appear the same as ‘treated chronic lyme’.

      2. PlutoniumKun

        I spent a couple of years in Sydney, and I thought the medical care there was on the same level as the US (actually better when you think of the system, as in much more equality of access). One big difference was doctors there were much more of the “wait and see” school than in the US: “Let’s keep monitoring this before we decide to do anything.”

        It actually goes down to the level of medical training. US doctors aren’t trained to say ‘no’ in the way doctors in other parts of the world take for granted. A relative of mine, a specialist in family doctor prescription practice, is actually doing a year long research project on this at the moment, I’ll link to his research as soon as its published as I think it is likely to highlight a key issue in why there is so much unnecessary overtreatment in the US.

        1. JTMcPhee

          My work as a nurse in a clinical practice included a large chunk of time dealing with UNsurance* denials of treatment and medications. (UNsurance apparently to be “provided” by UNdertakers?) Lots of paper walls and obfuscation and telephone trees and hangups get between patient and needed care. Annual revisions of “formularies” that demand that long-standing functioning medication regimens be run through a “prior authorization process” that requires the physician and patient, absent extraordinary efforts to beat down the bureaucratic walls, to try months of less-cost drugs even though these have failed in past or where diverting to ‘something cheaper” will result in harm to the patient and massive frustration to the doctor. “Peer-to-peer” unreimbursed debates with UNsurance company captive MDs whose prime directive, subject to metrics, is cost cutting and avoiding coverage. I’m sure we can all add to the list.

          My doctors, who I greatly respect, had ordered these therapies I was trying to obtains approval for, after assessing the patient in person, often in long-standing doctor-patient relationships. Maybe it’s the kind of medicine they practice, under the rubric of “physiatry,” also styled “physical medicine and rehabilitation.” (NB: not “psychiatry” or “podiatry,” although if the patient needs those services, my doctors will ensure they are referred and provided — the goal of physiatry is to return the patient to maximal health and function.) My docs have been lucky to fall into a niche where they have not yet succumbed to the corporate gobble-up that is forcing so many practitioners into wage-slave roles in “group practices” or as appendages to some “hospital corporation (not for profit /s). How long will that last, for them, and for the patients they care for?

          I’ve needed medical services, and have been the nexus for other doctors ordering “overtreatment” and inappropriate treatment, and the “recipient” of incorrect diagnoses and medical errors. The docs I have encountered include very good ones, who in a horrid climate of administrative burden and corporate abuse, try like heck to do that ancient art of Hippocratic medicine. And at the other extreme, you got the mass-producers, like the ones with lots of pseudo-bedside-manner and self-promotion and thousands of “patients” getting “seen by assistants” and treatment by rote protocols. Sometimes, that large patient base includes many in “facilities,” like so-called nursing homes or long term care dumps. Where the doc (“medical director”) will show up late in the evening when patients are asleep, do a “drive-by” from the hallway (if he even walks down the hall) without even examining the patient, then off to the nurse’s station to scribble a bunch of billable orders and add a few meds to the med list. Maybe get a quick report from the nurse, whose job depends on not questioning orders even if they might be harmful, cooperating in the polypharmacy game of loading the patient with many “pills for problems,” keeping the doctor happy, and keeping the resident calm and “alive.”

          Anecdote does not equal data, of course. But all this effort, to “rationalize and reduce to least cost-maximum profit algorithms,” the ‘delivery of health care’ (Amazon being a specialist in delivery, no?), is plowing ahead in a set of complex relationships that exist due to warranted public concern, the need for legislators to be seen to be “doing something,” notorious abuses, lobbying by looters and advantage seekers, on and on. The field has become so highly “regulated” that the smaller-scale but also complex relationship between doctor and patient is constantly under assault by the pressures of “MORE-ism” and the processes of crapification. Where the opportunities for looting and error and abuse are so huge, and exacerbated by the atomization and anomie that are the markers of our “society” that is increasingly asocial. And of course the “scientists” and “researchers” and marketers are adding complexity and tiers of new costs (in money, time and terror) every day, and us mopes stalk the Internet looking for cures and treatments that we then present to our “providers” as preferences or demands. For just a small selection of “what’s wrong with this picture.”

          I wish people could step back and refresh a view of what I think of as the fundamental nature of medicine: promotion of health, kindly personal interaction between patient and doctor, close observation by the physician, minimization of the administrative frictions that stand between doctor and patient and needed actual health care. But our credentialeds and corporatists want, and fill their rice bowls off, the complexity and looting opportunities. And since “medical diagnosis and treatment” is a wholly owned meme of the centalized-yet-fractionalized “system,” how the he(( do “we” ever get to anything like the “socialized medicine” that obtains elsewhere (though as with the NHS, under siege by the armies of “capitalism”?

          *(It’s not “INsurance,” it’s UNsurance — UNsure whether your doctor will be “in network” from month to month. UNsure whether your medications or therapies will be “on formulary” or “in coverage” going forward, UNsure if you have any rights at all as an “insured,” and so forth. Let’s all call it what it is: UNsurance.)

      3. Norb

        My wife recently scheduled sinus surgery through our health care provider. Sinus issues have been a chronic problem for her and other treatments failed to improve her situation, thus surgery is the last resort for relief. After surgery, her condition then becomes one of management to insure she doesn’t regress.

        One new feature of the experience was my wife was assigned a specific case manager that would oversee the paperwork. Contact with this individual is possible through phone or the web platform servicing the healthcare group. This individual specifically noted that she would be handling the coding needed for insurance billing purposes and would us if any charges fell outside our coverage. This is fairly routine surgery, so is fully covered, only requiring the deductible.

        From the point of view of people with good insurance coverage, the system is fundamentally sound. The “Interface” can be streamlined and improved along the ease of use lines. If the main concern of the citizenry is just convenient access to product delivery, then Amazon has become the model to do just that- which is a totally different question form being is it right,just, or the most cost effective on a larger social scale- which, I would say, it is not.

        Its all about gaming and manipulating the system. These financial and tech giants just might be heading off the revolution of their workforce. If someone has a shitty job, but has well provided for healthcare, they will stay with the job. Maybe the next phase is being able to provide care for a captive workforce without concern for anyone else. It could even work out that costs could be passed on to those outside that closed network. It is a remake on the company store idea. A less abusive company store.

    2. Lambert Strether Post author

      The handle is indeed huge, but the “skim” (by definition) is a small percentage. If we think of the health care system as a gigantic casino — which may be closer to the truth than we like to think — we need to imagine a casino with enormously overpaid executives, a bloated administrative structure, real profit, and so on. (I guess the analogy breaks down because, contrary to what economists believe, most people are not insane enough to want to enter the health care system unless they have a very good reason, unlike gamblers, who find risk stimulating*.) I put the stuff like accounting control fraud into the skim bucket, and the skim in and of itself is enough to incentivize our three squillionaires, but the real social cost is in the size of the handle, much of which simply should not exist.

      NOTE * This may be another reason why “shopping” for health care is misconceived. It’s exciting to shop for a new pair of shoes, say, or a flat screen monitor, but it’s not exciting to shop for an appendectomy.

  16. The Rev Kev

    I’m trying to think what this trio might come up with but whatever it is, it will not be good for the people involved. I know people here are talking about the angle of a health benefit company but I think that it may be different. What comes to mind is basically a software program as mentioned but with a twist. You would go online and punch in your symptoms from a drop down list and a diagnosis would result with the dispensed advice or drugs. Those that are more difficult to diagnose, or potentially require drugs for which a prescription is required, would involve a sort of Skype conference with a doctor. If all else fails, only then will you be authorized to actually see a doctor or a specialist. My idea is that they want to get a death-grip on the actual interface between doctors and patients from which all else flows.
    I think therefore that the way that healthcare costs are to be driven down would be to reduce physical visits to a doctor’s surgery. If you will, it will be automating big chunks of the medical system. It would be a very paternal system – at first. Of course I could be totally wrong but I am trying to think like a capitalist “disrupter” here and this is what I came up with. I would imagine that this would be “encouraged” on the Amazon workforce – if they want to keep their jobs that is. It would be a great way of short-circuiting single-payer health in the US in the same way that Obamacare was supposed to be such a great innovation in health insurance – and we all remember the software fiasco that proved to be. The focus has been on health insurance but I am thinking of medical care itself.
    Last week there were articles here on the software fiasco in Australia with Centrelink (our Social Security). I should have posted about that. A major reason that it was so bad that is was absolutely rigid and designed for people that lived only in our capital, not the rest of the country and yeah, we got caught up in that expensive mess. It was a matter of trying to prove that you did not owe money and not Centrelink prove that you did. I can see the same happening here. If your symptom is not on that menu then you are all out of luck. Once in place, it will probably be crapified the way a recent article here talked about how Amazon’s services were crapified.
    Thinking further, there could be different levels of care. Bronze for workers, silver for supervisors, gold for executives while the very top would have their own private doctors in any case. It could plug in to health insurance companies and I think that this platform will be scalable as other companies brought in onto for their own companies. Yeah, having Bezos in charge of your medical care. No problem. Of course I could be absolutely wrong about all this and here I really am hoping that I am.

    1. Lambert Strether Post author

      > they want to get a death-grip on the actual interface between doctors and patients

      That puts it better than I did. That is the purpose of the platform.

      Another way to put this is that they’re removing as many of the placebo effects that come from human interaction as possible — and AFAIK those effects are measurable and real — and replacing them with the placebo effects that come from branded pharmaceuticals. Ick.

      1. cgeye

        and part of the problem is classification: how were illnesses classified before, and how are they, now?

        and, how will such a massive system keep compliant with HIPPA?
        how will they defend against breaches?
        won’t they be dependent on credit agencies, for ID verification?

  17. Oregoncharles

    Light bulb: Kaiser. They’re planning to set up their own Kaiser system, cutting out the middlemen. How many does Kaiser serve? Some of the rest is just business-babble, like invoking “block chain.”

    From what we hear, that would be an improvement for their employees as well as for their bottom line. And at the rate Amazon is making people sick, that could be important for them.

    1. Oregoncharles

      On the “platform” idea: two of the three partners are investment firms. They have oodles of money available. It makes more sense to use it to build actual facilities – like Kaiser hospitals. They could even buy a couple of strategic pharmaceutical companies; they may have already done it. That way they imitate the NHS and cut out all the intermediate layers of profit – hence “free from profit-making incentives and constraints”.

      Amazon does “platforms”, so they might use those skills in the system, but I don’t see any real advantage to makin git the centerpiece. Platforms don’t deliver health care, and that’s what they have to do to cut out the middlemen.

      Why not just hire Kaiser? Because they don’t control it.

    2. Yves Smith

      I heard from insiders about 18 months ago that Kaiser is on its way out, it’s having trouble financially and is pretty sure to be merged into another system. So it’s not going to be a model as a result.

      1. Oregoncharles

        That would be a reason not to mention it as a model, for sure.

        That’s quite a collection of deep pockets. Whatever they create, it won’t be undercapitalized.

        And thanks for taking my brainstorm seriously.

      2. Ddt

        Hmm. KP’s financials have been pretty good the last few years. I think the only Region that ran a loss was Colorado in FY2017. And KP did purchase Group Health Cooperative in WA state recently. I work for KP and ive survived a couple of downward cycles. How high up were your sources Yves?

        1. cgeye

          y’know, they could just make things better by improving the meds distribution system… using monopsony power to lower drug costs.

          but, isn’t that too easy?

          1. cgeye

            … but wouldn’t the monster play be, simply, to purchase Kaiser and take it nationwide?

            JPM has the cash; BH has the experience with state departments of insurance; and, Amazon can create hooks by creating pharmacies within Whole Foods.

  18. Darthbobber

    Amazing how the perceived omnipotence of various oligarchs has reached a point where a mere joint declaration of intent to maybe produce some undefined healthcare vaporware can produce such breathless speculation and very real temporary effects on stock prices of the health insurance and allied industries.

    If I didn’t know that the troika would never stoop to such hucksterism, I might suspect the whole announcement of having been cooked up simply to facilitate a short-selling operation.

  19. Teodrose Fikre

    What is going on the global markets is ominous and truly scary. I hope this is not what I think it is, I appreciate Cfdtrade for holding the feet of the oligarchy to the fire. This is my latest article I wrote at the Ghion Journal, sharing this here.

  20. Darthbobber

    “An undertaking of great advantage” works quite well.

    But I’m partial to “This thing of ours”.

  21. oaf

    “Health Care”, as generally used, is a misnomer. “Sickness Maintenance” would be less euphemistic. Do those who profit off Health Care not need us to make ourselves unwell?
    True Health Care is a combination of being born lucky, and living well.

    1. JEHR

      Joke of the day! Good one. It makes you think what the health system would look like with all that mining and overuse of electricity, to say nothing of the hacking and taking of the profits.

  22. XXYY

    I’m guessing that Amazon, looking around for new worlds to conquer, said to itself “there’s a lot of money in healthcare” (as has every other business at one point or another), and this press release is some kind of announcement that they are going to commence exploring how to make money in this field. I work for a large tech company that has been making similar maneuvers for the last decade, without a lot to show for it since health care is not really a tech problem.

    Some proof of this thesis is the fact that none of the principals involved here have any experience in healthcare. This is similar to the charter school industry, whose principals are always billionaires or finance people, and never under any circumstances people with a background in education. Both these are examples of the “ignorance is good” mantra that has been coming out of the US tech industry since the late 90s, perhaps supplanting “greed is good” from the 80s. How can you possibly invent anything new when you’re weighed down by all that knowledge and experience! Evidently, having people who have actually worked in the field long enough to become experts is depressing to the newbies, who keep getting their 5-minute-wonder ideas shot down.

    Note that this is also another case of people who claim to want to improve the healthcare system studiously averting their eyes from proven approaches that have decades-long track records of success in the real world, on country-sized populations. “Whatever can we do? (long pause…) Maybe we can think of something.” It’s also a good example of the credulousness of the US media, who jump all over this extremely vague announcement as if it were a breakthrough. Must be very amusing to Bezos, et. al.

  23. RB

    Amazon just seems to be a big machine that eats people and sh*ts money. At some point you have to wonder: for what purpose?

  24. Jamie

    Bernie Sanders should not appear in any healthcare articles. He voted for the F35 dud, 700 billion — free college for ten years or medicare for all.

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