Health effort by Amazon, others aims to succeed where others have failed

The planned venture by Amazon.com, Berkshire Hathaway, and JPMorgan Chase to overhaul their workers’ health care follows years of similar efforts by employers to change a complex and entrenched industry, with mixed success. "This is not a new idea," says Lonny Reisman, a former executive at Aetna who helped create an employer coalition in the 1990s that crafted deals with health maintenance organizations. Do employer groups "have enough clout to actually change the nature of health care delivery and pricing?" he asks. "I don't think they've been very successful." Earlier employer alliances have mostly been able to point to incremental gains, such as cheaper pharmacy-benefit rates for members. They have not managed "in a wholesale way to transform an industry, which is what these guys are trying to do," notes Jim Winkler, a senior vice president at consulting firm Aon PLC. "It is really hard to do." The Health Transformation Alliance is perhaps the highest-profile existing employer effort, with 46 members. The alliance this year began contracting with two PBMs to provide lower prices and more transparency on fees and rebates. The PBM contracts will save the companies participating in them a total of at least $600 million over 3 years compared with their previous deals, according to the alliance. One challenge for employers seeking to make large-scale changes is that health care markets are fractured and vary widely by market. Even large national employers often have limited populations in a particular location.