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Berkshire Hathaway, Amazon, and JP Morgan’s bold initiative

The overall patient handling equipment industry, as claimed by Global Market Insights, Inc., will exceed a valuation of USD 23 billion by 2024

By Chip Calcagni / Special to Healthcare Facilities Today


Increasingly as healthcare groups consolidate, the single hospital model of healthcare delivery is vanishing. As architects centered in healthcare, working with both for-profit and not-for-profit systems, we’ve seen the consolidation drive a direction from single facilities to real estate management.

Larger healthcare groups are now launching their own insurance groups to drive consumers to their care products.  This focus developed the emergence of a new trend, healthcare being stitched into lifestyle communities: why get 15% of a person’s income while under treatment when entire health/lifestyle maintenance organizations could be created, capturing a larger segment of the economic pie. Each of us, in America, has had to deal with rising insurance costs covering less and less care.

In a characteristically visionary statement, Amazon, JP Morgan Chase, and Berkshire Hathaway have announced their intent to create a healthcare system for their own employees, effectively capitalizing and driving this transformation.

As consolidation of hospitals into systems have begun in earnest over the last few years, it seems to be inevitable that there will end up being eight to ten national healthcare delivery systems emerging. Although great strides have been made in the for-profit sector, in regards to breaking down the state borders and managing the different healthcare approval agencies, the question remains – where is the funding coming from? In providing a ready source of payees, these three large corporations are basically providing the means to effectively self-insure and care for their employees.

As treatment modalities become increasingly home-based and as humans become intrinsically more disease resistant due to genetic advances and treatments, the large central hospital seems destined to transform into smaller regionally-based trauma centers. We see this emerging in the trend for micro-hospitals, private urgicenters, and the conversion of retail spaces into ambulatory care centers.

As pharma starts to integrate into these large corporate entities, they will have access to large national distribution centers with ready buyers and prescribers of their products. To be sure, there is a great deal to be developed in this new corporate model, integrating employees with health systems, but we have already seen it taking root in the pharmacy chains such as Walgreens merging with nationally recognized healthcare providers.

Although US healthcare is divided currently into three sectors, regional, for-profit, and not-for profit, these too may merge as the need for research-fed, targeted, precision medicine will be required to be market-ready and competitive. The merging of for-profit versus not-for profit care models will help defray the costs typically associated with research. Nowhere is this more evident than the groundbreaking work in IVF where costs have vastly dropped and success rates drive the patients to providers who yield the best outcomes.

Governmental cutbacks to funding have spurred a need to come up with affordable care alternatives. Although companies such as Prime, Kaiser Permanente, and Adeptus, to name a few, have established much of the groundwork for such large corporate healthcare entities, this bold step by these three corporations represent a modality and reality that was thought to be far in the future.

Healthcare center construction demands great financial resources and long lead times, it is incumbent on those in the healthcare design community to provide for flexibility for an uncertain future. As professionals schooled and dedicated in the planning of healthcare centers, we need to be helping our clients plan for diverse and innovative options as these consolidations speed forward.

Chip Calcagni, AIA, is a partner at E4H Environments for Health Architecture.

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February 7, 2018


Topic Area: Blogs


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