Minnesota effort has health care revamp lessons for Amazon and its partners

Christopher Snowbeck, Star Tribune (Minneapolis) on

Published in Business News

MINNEAPOLIS -- The effort rolled out last week by three of the nation's most influential companies to revamp health care is the latest in a series of such pushes by corporate America, including a widely heralded effort in the Twin Cities that ultimately failed.

For a period during the late 1990s, big employers in Minnesota launched an innovative program that gave workers data to help them shop for health care based on the cost and quality of care provided by competing groups of doctors and hospitals.

What happened next offers key lessons, health policy analysts and key players involved in the program say, as executives at Amazon, Berkshire Hathaway and JPMorgan Chase plot the next moves in an initiative that last week shook the stock of health care giants including Minnetonka-based UnitedHealth Group.

"Everyone said: 'This is a model -- this could really work,'?" said Tom Forsythe, a retired General Mills executive, recalling the '90s program. "And then, it really didn't."

On Tuesday, the three companies announced a vague plan for launching a partnership that would develop technology solutions to improve the cost and quality of care for workers in their employee health plans.

Despite the lack of details, the big names behind the announcement commanded attention. Amazon and Jeff Bezos, the chief executive of the online retail giant, have a history of disrupting industries via technology. Berkshire Hathaway is led by famed investor Warren Buffett, while at JPMorgan Chase, Jamie Dimon runs the nation's largest bank.

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Together, the companies employ around 1 million people. While Wall Street investors initially seemed to sense a threat for big established players, stock analysts said the news could create opportunities for incumbents like UnitedHealth Group, which is the nation's largest health insurer.

"Our view is that a new entrant, rather than trying to 'start from scratch' will quickly realize that better deploying what is already available and collaborating with the national (health insurers) in their endeavors is the quickest path to success," Credit Suisse analysts wrote in a note to investors last week.

In Minnesota, employers launched in 1997 a cutting-edge program called Choice Plus through a group called the Buyers Health Care Action Group. It counted among its members Dayton-Hudson Corp., Pillsbury, Norwest Bank and General Mills.

The companies were all "self-insured," meaning they took the financial risk for claims and also had a lot of data about how much care their employees collectively used. The employers pooled their data and launched research groups that helped generate data on the cost and quality of different medical groups.


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