Dear Jeff, Warren & Jamie:

I recently met my ex-boss from PepsiCo for lunch. She was the vice president of Supply Chain before she took early retirement. After our initial family updates, her first question to me was, “What does the announcement of the Amazon-Berkshire-JPMorgan merger mean to healthcare and to me as a healthcare entrepreneur?” This is when I realized how high the stakes are for Bezos-Buffet-Dimon. They have set huge expectations among their consumers, because all of them are hurting with the exponential increase in healthcare costs.

I am convinced that this trifecta of Bezos-Buffet-Dimon, should not be taken lightly. What is most promising about this announcement, is that it is the coming from the private sector. I’ve lost much hope in promises from politicians or aspirations from legacy healthcare players who have much to lose with any disruption to the current status-quo. Here are my recommendations to the leaders of this venture.

Promote Healthcare Consumerism

Every discussion on inefficiencies in the healthcare market are attributed to lack of patient/member accountability due to the current payment model. Bottomline, in healthcare, we do NOT have consumers who makes purchasing decisions. Therefore, there is no benefit for a patient to take accountability or control of their healthcare choices and costs. This is changing as the structure of health plans changes. There are now huge deductibles, co-pays, penalties for unhealthy behavior.

This new entity can start providing more tools to turn their employees, and ultimately their customer base (Amazon, Berkshire portfolio companies & JP Morgan), into true healthcare consumers. They should provide tools that increase the transparency or price and performance. Imagine a world where this consortium negotiates volume-based PBM contracts and opens it to each Amazon Prime subscriber. There is power in volume.

Consumers can start sharing their healthcare experiences and rating healthcare providers in their local markets like online product reviews. In effect, this trifecta can create an educated consumer along with incentive systems for members that stay accountable for their cost of care. This entity already has the technology infrastructure in place to enable healthcare consumerism.

Create Efficient Value Chains Through Private Accountable Care Organizations (ACOs):

The healthcare provider value chain is fragmented, siloed, inefficient, and operates in single digit margins. Do you remember the days before Walmart and Amazon got into retail? In a retail environment, what matters most is doing thousands of little things every single day correctly and building out the infrastructure to support this minutia. It is the consistency and precision in the processes that result in retail winners (and healthcare winners). There are only a handful of retailers that have mastered this precision to the degree that Amazon and Walmart have.  By capitalizing on their ability to develop efficient processes, Amazon can help create efficient Private ACOs by bringing employees and other members together, creating efficient local provider networks, negotiating with pharmacies and medical suppliers, and ensuring standardized provider pricing and performance.

Transform Call Center Expertise into Powerful Chronic Disease Care Management Centers

I’ve been saying this for years: population health is local. You need to understand the healthcare trends, access-to-care issues, demographics, and behavioral triggers of your people. Population health needs strong, data-driven decision-making and execution. Who better than Amazon? They know when I last ordered diapers for my infant daughter, kept track of her shoe size all through-out elementary school, recommended appropriate books and music when she was a teenager, and now are selling her extra-long twin sheets now that she’s going off to college. We trust your data, your systems, your processes, and your quality of service. You talk to me when I am not happy, provide warranty for products, and even take back products that I don’t like without complaint.

Why not leverage these high powered, AI-driven call centers to build chronic disease care management centers? Hire registered nurses to ensure all the chronic disease members are complying to the best evidence care guidelines. Gently send them reminders, educate them, and track their medical and pharmacy compliance by their purchases. You have a plethora of consumer data; mine it to help your members become better healthcare consumers that accountable for their actions. We TRUST you.

Create Entrepreneurs and Walk the Talk

Build upon the TRUST you have created with your brands (Amazon, Berkshire, and JP Morgan). Partner with local communities and entrepreneurs to unleash the potential of the data and technology systems they have developed by creating open environments. Your entrepreneurial culture is difficult to copy by the large health plans, medical management services like Optum, electronic medical records vendors like EPIC, Cerner and PBMs. They have grown by fostering a culture of closed systems, and it will be impossible for them to change overnight. You have the power to unleash the entrepreneurs that are aligned with your your mission by opening the market opportunity and share your success with them.

Help us lower our healthcare costs, and we will pay it back by spending those savings on Amazon products, investing in Berkshire Hathaway’s products, and transacting through the JP Morgan financial network.

Jeff, Warren and Jamie, let’s make a pact: you deliver on your promise and we will deliver on our promises as consumers and entrepreneurs.

Respectfully,

Jay Reddy

Dear Jeff Bezos

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