Nearly ten years ago, I was fortunate to be working with an incredible group of people creating innovations in employee benefits and healthcare at Washington Mutual. By the time 2008 ended, JP Morgan Chase had purchased WaMu in a fire sale after the FDIC seized the bank (Chase paid $1.9B for $52B in assets, not including the value of the branch network). Many were hopeful, and excited, that our work might continue, only now with a much larger platform.
Shortly after, as I was sharing some of our successes in bending the cost curve and improving health outcomes, a leader in Chase benefits told me that they weren’t ‘in the business of managing healthcare costs’. Instead, they ‘just buy benefits for our employees.’ At that moment, I knew my skillsets and the efforts and passion of my fellow WaMulians weren’t important to or needed by our new employer. To no one’s surprise or chagrin, the entire employee benefits team were let go.
With news this week of the Amazon, Berkshire Hathaway and JP Morgan Chase partnership aimed at fixing healthcare in America, I can't help but view my experience in a new light. Ever since that conversation at the WaMu headquarters in Seattle a decade ago, I’ve wondered how many other benefits professionals contribute to the problem of rising healthcare costs by ‘just buying benefits’ for their employees without searching for more elegant solutions.
Of course, the employee benefits profession has changed a lot since 2008. Most notably, the cost of healthcare it is now squarely on the radar of every CFO and CEO in the country. U.S. health care spending in 2016 reached $3.3 trillion and accounted for 17.9 percent of the nation's GDP.
I truly hope and want to believe these three titans of industry, Jeff Bezos, Warren Buffett and Jamie Dimon, will be guided by an altruistic desire to lower the extreme cost of healthcare. Their balance sheets alone make it possible for a complete restructuring of the system. If something isn't done soon, the next great recession could be triggered by a 'too big to fail'style healthcare implosion and subsequent taxpayer bailout. Come to think of it, maybe that's the reason Mr. Dimon is involved.
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