Bezos, Buffett, Dimon can make Sanders health-care dream come true

Bezos, Buffett, Dimon can make Sanders health-care dream come true
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Recently, Amazon's Jeff Bezos, Berkshire Hathaway's Warren Buffett and JPMorgan Chase's Jamie Dimon announced a dramatic new venture to enter the health-care business that could revolutionize the industry in America and make the great Bernie SandersBernard (Bernie) SandersJoaquin Castro says brother Julián is running for president in 2020 Sanders, Warren meet ahead of potential 2020 bids Senate votes to end US support for Saudi war, bucking Trump MORE dream of affordable health care for all come true.

There is great mystery surrounding the future plans of Bezos, Buffett and Dimon, who have not made their ultimate health-care intentions clear. What follows here is one realistic possibility of what they might be planning, and why they might be planning it.

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Bezos and Buffett are among the most wealthy individuals in the world, uber-billionaires whose mission is to enrich themselves to the greatest possible degree and to maximize profits for their companies. Ditto for Dimon, leader of the largest U.S. bank. Let's assume for our purposes that they are motivated entirely by financial greed.

 

Amazon, Berkshire Hathaway and JPMorgan Chase currently pay substantial costs to provide health-care products to their workers. If the costs of their health-care programs for employees were reduced, the net profits for their companies would rise; their corporate earnings would rise; their stock prices would rise and their personal wealth would increase.

In other words, if their primary motivation in business is pure greed, they have a substantial financial interest in lowering the cost of health care to their employees! They need not be idealists to arrive at a place similar to where Sen. Sanders (I-Vt.) has been for a lifetime on the matter of lowering health-care costs for Americans.

The implications of this could be enormous for the future of health care and the coming midterm and presidential elections in 2018 and 2020.

The business model for Amazon under Bezos has been to charge customers lower prices than competitors for products they buy and to make money based on lower profit margins per sale, but huge volumes of sales.

To the degree that Amazon enters the market for prescription drug sales, the cost of buying prescription drugs would go down for their customers. Sales for these lower-priced drugs would soar for Amazon and sink for much higher-priced drugs from big pharmaceutical companies. Equally powerful is the fact that Amazon would base its lower-price paradigm on the lower costs of generic drugs.

Similarly, to the degree that Amazon enters the market for selling health insurance policies, the Amazon business model would lead to lower insurance premiums for customers, low profit margins for Amazon per policy sale, but huge profits for Amazon based on a huge volume of sales.

The magic of the potential convergence between the health-care vision of Bernie Sanders and the business strategy of Bezos, Buffett and Dimon is that the corporate titans could view their health-care programs not as a means to make money selling the health-care products.

Rather, they could view it as a means of providing these health-care products to their employees at cost, which would increase their corporate earnings and profits by lowering their corporate expenses compared to buying them at current prices of prescription drugs and insurance coverage.

The Sanders vision of health insurance has always been to dramatically cut costs for consumers by taking corporate greed out of the costs to customers. This can be realized through programs that are called single-payer healthcare, Medicare for all or the public option.  

Democrats would be well-advised to run in midterm elections against high insurance premiums brought by TrumpCare by supporting some version of the public option.

Sanders can fairly be called a frontrunner for the 2020 Democratic presidential nomination in large measure because of his support for the notion of lowering costs of insurance and drugs by taking the greed that dramatically increases costs to consumers out of the system.

The Bezos-Buffett-Dimon vision of maximizing corporate profits for their companies would similarly be served by eliminating the profit motivation for the sale of insurance and prescription drugs to their employees, which would lower their costs of doing business and increase the profit and earnings for their companies.

If the corporate titans implement this vision of providing profit-free insurance and prescription drugs to their employees, they would essentially be creating a public option or single-payer system that is privately financed to benefit their workers and increase their corporate profits by lowering their cost of doing business.

If and when they implement this system for their employees, other companies would adopt similar systems for their employees.

Or, the Bezos-Buffett-Dimon program could be sold to other companies and individual customers with a 5-percent or 10-percent markup that would still dramatically lower prescription drug and health insurance costs, compared to the current system, for all customers who buy the products.

This would validate the Sanders vision of single-payer health care, and in the irony of ironies, give new meaning to the phrase “corporate socialism”!

Brent Budowsky was an aide to former Sen. Lloyd Bentsen (D-Texas) and former Rep. Bill Alexander (D-Ark.), who was chief deputy majority whip of the U.S. House of Representatives. He holds an LLM in international financial law from the London School of Economics.