While health insurers have managed to stand tall these past few years and the performance so far in 2018 has been commendable, some disruptive forces are underway in the industry that might alter the functioning of the organization and pose new challenges.
Let’s take a look at some of the current happenings that might shake the industry.
Will Foray of New Players Disrupt the Industry?
Amazon.com, Inc. (AMZN), Berkshire Hathaway Inc. (BRK-B) and JP Morgan (JPM) — corporate czars in their respective fields–have teamed up to enter the healthcare market. While they have come together to manage healthcare cost for their employees, it would not come as a surprise if they start a healthcare company to provide services to the public at large.
Amazon has already expressed interest in the pharmacy business. A lot of progress is being made on this joint venture. At Berkshire Hathaway’s annual meeting, Buffett revealed that the joint venture will soon have a CEO to look after healthcare affairs.
There is no doubt that the entry of these retailers (especially Amazon, which has successfully turned the tide in its favor in whatever business it has laid its hands on thus far) will widely unsettle the healthcare sector.
These retailers, with their established brands, huge customer data, cutting-edge technology and superior product and services, should lead to a radical healthcare transformation. It is expected that the solutions created by them will to a large extent solve the three main challenges of the healthcare sector — access, quality and cost. A shift from “one-size-fits-all†care treatment to “tailor made care†should be in vogue, as these customer-centric companies try to design customer-specific products and services compared with traditional healthcare players that have hardly ever extended such care to customers.
Considering the health insurance industry, which was concentrated with a handful of big players that command product pricing and service offerings, and had an upper hand in dealing with customers, will find themselves in a radically changed scenario. Players in this space have already had to make fundamental changes in their business operations and attitude since the enactment of Obamacare in 2010 that put a check on malpractice to protect customers’ interest. Now, the entry of players that are already well established in their own fields and enjoy customer loyalty, will give the traditional healthcare players a jolt.
