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Comment by thinkingkong | Hacker News Reader

I read the original announcement and also this analysis. Is it decided that Amazon will “own” the healthcare provider? As far as I can tell this is still a joint effort by several companies with the same philosophy on how to solve the problem. Presumably if other large companies were aligned they could create their own joint partnerships or discuss the possibility of joining this one.

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One avenue this entity could take is to offer itself as a non-profit third party administrator of a self-funded plan for other companies. Large companies typically put up the money for health insurance anyway combined with employee premiums and then pay a TPA company or health insurer to create the benefit plan and administer it for them. They don't actually buy insurance as a product from a health insurer for their employees.

Alternatively, they could pool funds and create an actual insurer.

The trouble with Amazon trying to become THE payer or TPA is that insurance is highly variable across the country. There are many different laws governing insurance in each state, and you need to strike business agreements with literally countless small practices, hospital systems, lab service providers, drug companies, outpatient clinics, etc. It would actually be a massive administrative feat for Amazon to provide solid coverage across the US.

> The trouble with Amazon trying to become THE payer or TPA is that insurance is highly variable across the country. There are many different laws governing insurance in each state, and you need to strike business agreements with literally countless small practices, hospital systems, lab service providers, drug companies, outpatient clinics, etc. It would actually be a massive administrative feat for Amazon to provide solid coverage across the US.

It's possible to start small, no? One metropolitan area at a time, make deals with local orgs, slowly transition local employees over to the new plan. The 75 employees working at the Iowa datacenter may stay on their current insurance for a while, but I don't think that's a terribly difficult obstacle for the idea.

Absolutely it is possible, and I imagine that is exactly what they will do.

you need to strike business agreements with literally countless small practices, hospital systems, lab service providers, drug companies, outpatient clinics, etc.

This is why the aggregator model described in the article is relevant - the small practices will come to Amazon to plug into their aggregator and access their customers.

In that scenario, Amazon opens up shop in a state, provides cookie cutter TOS agreements to providers that mesh with the state's regulations, and providers on-board themselves in order to access the customer base.

Totally dependent on the locale. If I recall correctly there are coverage laws in certain places which state that you cannot do business as an insurer in an area unless you provide physician and hospital access to people within a certain proximity. If you're a big hospital system or even a small place without much competition, you can tell Amazon to shove their TOS because they literally can't do business legally there without you.

> Is it decided that Amazon will “own” the healthcare provider?

Nothing is decided. Everything currently being discussed is speculation. That said, the article addresses this:

"Amazon doesn’t create an insurance company to compete with other insurance companies (or the other pieces of healthcare infrastructure); rather, Amazon makes it possible — and desirable — for individual health care providers to come onto their platform directly, be that doctors, hospitals, pharmacies, etc."

The author envisions a souped up ZocDoc. It doesn't just help you find providers. You buy your insurance through it; when you book an appointment Amazon handles logistics, billing and payment; as you walk out, your prescription auto-fills or shows you your options, which you (or your insurance provider) pay for through Amazon, and which are delivered to your door--on schedule--by Amazon, et cetera.

If we assume investors are omniscient, there is somewhere between a 3% and 11% chance Amazon Health will commoditize the market. Weigh those numbers a bit upward if you think Amazon can't do it instantaneously.

CVS dropped by just over 4 percent by midday, UnitedHealth plunged a whopping 11.5 percent, Express Scripts was off by 3.6 percent, Cigna was down by just under 7 percent and Walgreens fell by 2.6 percent.

https://techcrunch.com/2018/01/30/cvs-other-health-stocks-do...

It doesn't sound like Amazon would own providers, or try to become a payer. Instead, it becomes an aggregator of providers and payers, gaining negotiation power, which it can leverage to lower costs for healthcare "demand".

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