An increasing trend of hospitals offering their own insurance plans could potentially mimic what has been happening in the retail industry with the Amazon model. The amazing change in the retail market over the past decade has been spurred by Amazon providing direct to consumer services in a more convenient and economical fashion. As everybody is aware, the Amazon Prime membership model has moved a large portion of shopping online, and been a boon for Jeff Bezos. Could that same model be applied to healthcare?
Because of the changes that were created with Obamacare the offering of direct to consumer healthcare plans offered by hospitals have proliferated. The governmental regulations have changed, making it much simpler for hospitals to enter this market and become more of a presence in competing for the administrative dollar, as well as the healthcare dollar simultaneously. Prior to this the explanation for existence of insurance companies was to hold the exorbitant costs of healthcare in check. Unfortunately, that reasoning has been specious, and ineffectual. Healthcare costs have spiraled out of control, while simultaneously health insurance companies have continued to take progressively larger bites out of the pie. This has allowed an encroachment in the administrative healthcare expenditures by hospitals, and has been encouraged by the government.
Because hospitals provide the largest share of America’s healthcare, it almost makes sense they would have health insurance plans that they own and administer. The industry can already see a change with the hospitals consolidating and increasing their reach over every aspect of healthcare, from acquiring private practice physician’s offices, to hospital systems and nursing homes, and rehabilitation centers. This large consolidation of the healthcare continuum does provide economic benefits. Unfortunately there are also caveats with this type of consolidation healthcare. As systems become much more unified, they can become unwieldy and monopolistic.
In comparing performances of health insurance companies with hospital systems who are practicing this model a mixed bag of returns is noted. The health insurance companies enjoyed pretty impressive financial profits over the last seven years, however the healthcare systems that are consolidating healthcare have had a variable successes.
Certainly, the changes with the subsidies from Obamacare may influence how quickly this new model of healthcare is adopted. We would expect if the continued subsidies are paid to the insurance companies that it will slow this newer style healthcare development. However, with President Trump in office the subsidies potentially may be diminished or completely eliminated which we would expect to hasten this type of new healthcare system.
The future is notoriously difficult to see, however, we do know that the current system is failing and something will have to arise from what we currently have healthcare is too important to do without. The Amazon model does shed some light on the changes which are taking place in healthcare, and may lead us to more efficient and effective healthcare delivery systems who knows maybe some day we will have Prime Healthcare!