No, Bezos Won’t Be Shaking up Healthcare. Not without generous help from Buffett and Dimon

(Originally published on LinkedIn February 4, 2018)

Commentary about the Bezos-Buffett-Dimon challenge to healthcare has focused on the Amazon-style threat of disruption.

In my view, the more interesting aspects of the challenge come from the deep knowledge of insurance and consumer finance that Berkshire and JP Morgan bring.

There could well be technological efficiency gains to be squeezed out from the healthcare value chain and, sure, Amazon, would excel at that. But that could at best shake up the less valuable, commoditized bits of the healthcare market.

Imho, however, as societies advance, they demand better quality healthcare. The most sophisticated procedures, the most effective medicines, the cleverest surgeons…. Such high quality healthcare will always be priced at a premium. Yet, enough patients (or consumers, if you must) will still demand access to such premium treatment.

That’s where Berkshire and JP Morgan come in. They bring expertise in spreading medical costs across a large pool of patients (insurance) and helping individual patients spread their own medical cost over time (consumer finance).

It isn’t immediately clear what Buffett or Dimon will do that hasn’t been tried before (remember Obamacare?). But one can at least agree that by examining the issue comprehensively from insurance and consumer finance perspectives together along with technology, they have a better chance of success than Bezos simply trying to repeat his retail disruption act alone.