1
00:00:00,280 --> 00:00:03,360
Speaker 1: In the nineteen nineties, Amazon dot Com was a quirky

2
00:00:03,440 --> 00:00:06,720
Speaker 1: online book selling start up looking to take advantage of

3
00:00:06,720 --> 00:00:10,280
Speaker 1: the early days of the World Wide Web. Now having

4
00:00:10,360 --> 00:00:13,600
Speaker 1: long moved on from ripping apart the book business, Amazon

5
00:00:13,720 --> 00:00:17,360
Speaker 1: is a retailing and technology behemoth with an impact felt

6
00:00:17,360 --> 00:00:20,560
Speaker 1: throughout many other industries and around the world, not to

7
00:00:20,600 --> 00:00:25,000
Speaker 1: mention the daily lives of most Americans. Just recently, Amazon

8
00:00:25,160 --> 00:00:29,720
Speaker 1: joined forces with two other big names, Berkshire Hathaway and J. P. Morgan,

9
00:00:30,080 --> 00:00:33,320
Speaker 1: to figure out how to bring down healthcare costs. Today

10
00:00:33,400 --> 00:00:36,839
Speaker 1: on Benchmark, we'll talk about whether Amazon can disrupt healthcare

11
00:00:37,000 --> 00:00:50,279
Speaker 1: like it's disrupted the rest of the economy. Welcome to Benchmark.

12
00:00:50,400 --> 00:00:53,959
Speaker 1: I'm Scott Enman, economics editor with Bloomberg News in Washington

13
00:00:54,080 --> 00:00:57,320
Speaker 1: with Daniel moss Is traveling this week, So let's talk

14
00:00:57,320 --> 00:01:00,200
Speaker 1: about Amazon. I'm old enough to remember when it was

15
00:01:00,320 --> 00:01:03,920
Speaker 1: brand new and only sold books online. Now it's founder,

16
00:01:04,000 --> 00:01:07,000
Speaker 1: Jeff Bezos, is the world's richest person, with a net

17
00:01:07,000 --> 00:01:10,720
Speaker 1: worth estimated by Bloomberg at more than a hundred billion dollars.

18
00:01:11,160 --> 00:01:14,720
Speaker 1: It's even started opening actual bookstores that you can walk into.

19
00:01:15,200 --> 00:01:18,320
Speaker 1: They have their own video service and some pretty entertaining

20
00:01:18,319 --> 00:01:21,600
Speaker 1: original shows and movies. Even my kids like to ask

21
00:01:21,640 --> 00:01:25,440
Speaker 1: Alexa to play songs and tell jokes. But one area

22
00:01:25,480 --> 00:01:29,520
Speaker 1: that Amazon has basically shied away from his healthcare, particularly

23
00:01:29,600 --> 00:01:33,880
Speaker 1: the byzantine, expensive employer linked system that's a hallmark of

24
00:01:33,920 --> 00:01:36,880
Speaker 1: life in the United States of America. It accounts for

25
00:01:36,920 --> 00:01:40,679
Speaker 1: several trillion dollars of gross domestic product, which is about

26
00:01:40,720 --> 00:01:44,640
Speaker 1: eighteen percent of the economy. Amazon is just starting to

27
00:01:44,720 --> 00:01:47,400
Speaker 1: dip its toes into this area. We'll talk in a

28
00:01:47,440 --> 00:01:50,160
Speaker 1: couple of minutes with Laura Rosner, an economist who will

29
00:01:50,200 --> 00:01:53,880
Speaker 1: discuss how Amazon could affect prices in this industry and

30
00:01:53,960 --> 00:01:56,880
Speaker 1: the broader economy. But first I want to bring in

31
00:01:56,920 --> 00:02:00,480
Speaker 1: my colleague, Spencer Soaper. He's a reporter for Blomberg in

32
00:02:00,520 --> 00:02:04,200
Speaker 1: Seattle who covers Amazon. Spencer, thanks for joining us on

33
00:02:04,240 --> 00:02:07,440
Speaker 1: Benchmark today. Glad to be here. So Spencer, can you

34
00:02:07,520 --> 00:02:09,800
Speaker 1: just tell us a little bit about this new healthcare

35
00:02:09,880 --> 00:02:13,400
Speaker 1: venture that Amazon announced. What exactly are they doing? We

36
00:02:13,520 --> 00:02:16,000
Speaker 1: we don't know exactly what they're doing other than making

37
00:02:16,000 --> 00:02:19,600
Speaker 1: a lot of waves. Um. They announced a partnership with

38
00:02:19,960 --> 00:02:24,200
Speaker 1: Berkshire Hathaway and JP Morgan. All we know is that

39
00:02:24,240 --> 00:02:27,919
Speaker 1: they're frustrated with the growing costs of providing health care

40
00:02:27,960 --> 00:02:32,239
Speaker 1: for their workers and the complexity around providing health care

41
00:02:32,240 --> 00:02:36,280
Speaker 1: for their workers. This is something that Amazon CEO Jeff

42
00:02:36,320 --> 00:02:41,240
Speaker 1: Bezos and Berkshire Hathaway CEO Warren Buffett, and JP Morgan

43
00:02:41,320 --> 00:02:45,239
Speaker 1: CEO Jamie Diamond have commiserated with uh you know about

44
00:02:45,360 --> 00:02:48,160
Speaker 1: for some time now, um, and now they've decided to

45
00:02:48,919 --> 00:02:51,519
Speaker 1: team up to see what they can do. But beyond

46
00:02:51,600 --> 00:02:55,920
Speaker 1: them teaming up and collaborating, we really don't know how

47
00:02:56,000 --> 00:02:58,520
Speaker 1: far this could go. It could be as simple as

48
00:02:58,560 --> 00:03:03,640
Speaker 1: simply combining their employees and insured you know, estimated to

49
00:03:03,639 --> 00:03:06,840
Speaker 1: be about maybe two and a half million people insured

50
00:03:06,919 --> 00:03:09,440
Speaker 1: by the three companies together, if you include their employees

51
00:03:09,440 --> 00:03:12,840
Speaker 1: and dependence to have you know, just better bargaining power

52
00:03:13,120 --> 00:03:15,640
Speaker 1: in the marketplace. And it could be as complex of

53
00:03:15,680 --> 00:03:20,400
Speaker 1: them actually reaching into the healthcare industry and providing services,

54
00:03:20,440 --> 00:03:25,399
Speaker 1: whether it be UH pharmacy services or urgent care services,

55
00:03:25,520 --> 00:03:28,800
Speaker 1: or even on site healthcare services. So we're really not

56
00:03:28,919 --> 00:03:31,919
Speaker 1: sure how far and deep they're willing to go. Now,

57
00:03:32,040 --> 00:03:34,280
Speaker 1: why do you think Amazon has waited this long to

58
00:03:34,440 --> 00:03:38,120
Speaker 1: do something in the healthcare industry, Well, we know they've

59
00:03:38,120 --> 00:03:41,440
Speaker 1: been interested. At least Jeff Bezos has been interested in

60
00:03:41,480 --> 00:03:45,520
Speaker 1: healthcare for some time. Many years ago, the company actually

61
00:03:45,560 --> 00:03:49,880
Speaker 1: invested in drug store dot Com, which was ultimately purchased

62
00:03:49,880 --> 00:03:54,119
Speaker 1: by Walgreens and and shuttered, But at that time Bezos

63
00:03:54,200 --> 00:03:56,920
Speaker 1: was interested in drug store dot com and pharmacy in

64
00:03:56,920 --> 00:04:01,040
Speaker 1: particular as a gateway to older shop rs. UH. It

65
00:04:01,160 --> 00:04:03,560
Speaker 1: was a time when you know, maybe the fifty plus

66
00:04:03,600 --> 00:04:07,040
Speaker 1: crowd was a little wary of e commerce, wary of

67
00:04:07,080 --> 00:04:10,600
Speaker 1: putting their credit card information online, and saw a more

68
00:04:10,600 --> 00:04:14,920
Speaker 1: convenient pharmacy experiences a way to get them acclimated to

69
00:04:15,440 --> 00:04:20,680
Speaker 1: e commerce. That vision never really materialized, and to this day,

70
00:04:20,839 --> 00:04:24,880
Speaker 1: Amazon's lack of a pharmacy service when you consider them

71
00:04:24,880 --> 00:04:29,360
Speaker 1: getting into groceries and think about all of the big

72
00:04:29,400 --> 00:04:32,680
Speaker 1: box retailers and grocers that have pharmacy options in their

73
00:04:32,720 --> 00:04:37,719
Speaker 1: stores like Walmart and Kroger and Target and Costco. This

74
00:04:37,839 --> 00:04:40,760
Speaker 1: is a disadvantage for them because every time you go

75
00:04:41,240 --> 00:04:43,719
Speaker 1: to or even a CVS or Walgreens, every time you

76
00:04:43,760 --> 00:04:46,720
Speaker 1: go to one of these stores to refill a prescription,

77
00:04:47,400 --> 00:04:50,839
Speaker 1: you have to walk through abundant choices of other retail

78
00:04:50,880 --> 00:04:54,440
Speaker 1: products that you can buy, and and Amazon capitulates those

79
00:04:54,440 --> 00:04:57,960
Speaker 1: purchases to to these pharmacies. But the reason they haven't

80
00:04:57,960 --> 00:05:02,279
Speaker 1: gotten into it is it's very common. Plex is highly regulated,

81
00:05:02,360 --> 00:05:06,240
Speaker 1: and so that differentiates it from their core business of

82
00:05:06,279 --> 00:05:10,920
Speaker 1: selling you know, largely unregulated products online. There there are

83
00:05:11,320 --> 00:05:15,800
Speaker 1: layers of middlemen and government bureaucracy to fight through, which

84
00:05:15,839 --> 00:05:19,800
Speaker 1: would be a new frontier for for Amazon. I think

85
00:05:19,800 --> 00:05:22,200
Speaker 1: this is a good time now to bring in Laura Rosner.

86
00:05:22,560 --> 00:05:25,800
Speaker 1: Laura as a senior economist and partner with Macro Policy

87
00:05:25,880 --> 00:05:29,839
Speaker 1: Perspectives LLC, a research firm in New York. Previously, she

88
00:05:29,920 --> 00:05:32,600
Speaker 1: was a researcher at the Federal Reserve Bank of New York,

89
00:05:32,640 --> 00:05:35,800
Speaker 1: as well as an economist at Barclay's and BNP Power Box.

90
00:05:36,120 --> 00:05:38,760
Speaker 1: She joins us by phone today. Laura, thanks so much

91
00:05:38,800 --> 00:05:41,560
Speaker 1: for coming on our podcast. Hi, thank you very much

92
00:05:41,800 --> 00:05:44,760
Speaker 1: the pleasure. Laura. We've heard Spencer just now talking a

93
00:05:44,800 --> 00:05:49,160
Speaker 1: bit about the healthcare business, about drug prices. You've done

94
00:05:49,200 --> 00:05:51,599
Speaker 1: some research into this area. Can you tell us a

95
00:05:51,600 --> 00:05:55,120
Speaker 1: little bit about how drug prices work, or how healthcare

96
00:05:55,160 --> 00:05:59,359
Speaker 1: prices work, and how someone like Amazon could potentially affect

97
00:05:59,440 --> 00:06:02,680
Speaker 1: change in the sure So, I mean, let's start with

98
00:06:02,800 --> 00:06:06,920
Speaker 1: some context for so for more than a decade, growth

99
00:06:06,960 --> 00:06:12,200
Speaker 1: and healthcare spending has outfaced growth in total GDP, and

100
00:06:12,560 --> 00:06:18,160
Speaker 1: health care inflation has outstripped total inflation in our economy.

101
00:06:18,279 --> 00:06:22,880
Speaker 1: So rising healthcare costs is not something new. I think

102
00:06:22,920 --> 00:06:29,400
Speaker 1: it's combining with changes in demographics and is creating some

103
00:06:29,560 --> 00:06:35,680
Speaker 1: urgency to uh to improve the situation in general. You

104
00:06:35,720 --> 00:06:38,320
Speaker 1: know again, I'm h and let me start over here.

105
00:06:38,400 --> 00:06:41,760
Speaker 1: I mentioned that total health care prices in our our

106
00:06:41,839 --> 00:06:46,359
Speaker 1: economy have been growing faster than overall inflation. Despite that,

107
00:06:46,640 --> 00:06:51,239
Speaker 1: we've seen the differential narrow over the last several years.

108
00:06:51,560 --> 00:06:55,560
Speaker 1: And one reason for that is that the government has

109
00:06:55,560 --> 00:07:01,479
Speaker 1: been taking a more active role in negotiating down healthcare prices,

110
00:07:01,480 --> 00:07:06,919
Speaker 1: both both services and potentially drug prices too. So now

111
00:07:07,040 --> 00:07:10,360
Speaker 1: if we have a new partnership with potentially a private

112
00:07:10,400 --> 00:07:14,800
Speaker 1: sector firms playing a more active role in negotiating down

113
00:07:14,880 --> 00:07:18,360
Speaker 1: those prices, I would think that that could really add

114
00:07:18,400 --> 00:07:22,600
Speaker 1: to some of the disinflationary forces in the economy. Right now, Lord,

115
00:07:22,680 --> 00:07:24,400
Speaker 1: can you tell us a little bit more, I mean,

116
00:07:24,440 --> 00:07:29,840
Speaker 1: how could these companies negotiate prices in the private sector.

117
00:07:29,840 --> 00:07:34,080
Speaker 1: Wouldn't they really need some massive size and scale or

118
00:07:34,360 --> 00:07:36,600
Speaker 1: is that something that you know based on your research,

119
00:07:36,640 --> 00:07:39,120
Speaker 1: they might be able to accomplish. So sure. Let me

120
00:07:39,280 --> 00:07:42,200
Speaker 1: first say when I mentioned the government is using their

121
00:07:42,240 --> 00:07:46,000
Speaker 1: market power to negotiate prices lower. The government can do

122
00:07:46,040 --> 00:07:49,920
Speaker 1: that because it accounts for about thirty seven percent of

123
00:07:50,320 --> 00:07:54,520
Speaker 1: total healthcare expenditures through its Medicare and Medicaid programs, so

124
00:07:54,600 --> 00:07:57,600
Speaker 1: it has a huge footprint and it can set prices

125
00:07:57,720 --> 00:08:01,200
Speaker 1: rather than just take them. Now, the three companies that

126
00:08:01,280 --> 00:08:04,640
Speaker 1: have formed this partnership, they're very large too, but not

127
00:08:04,800 --> 00:08:08,760
Speaker 1: as large as the government, so they'll probably my guests

128
00:08:08,800 --> 00:08:13,360
Speaker 1: is they'll probably look to other ways to increase efficiencies

129
00:08:13,400 --> 00:08:17,520
Speaker 1: and force uh lower prices. And again we know we

130
00:08:17,560 --> 00:08:20,360
Speaker 1: know very little at the at the time, but some

131
00:08:20,520 --> 00:08:25,880
Speaker 1: possibilities are using the dominance of Amazon in e commerce

132
00:08:26,080 --> 00:08:31,360
Speaker 1: to introduce things like comparison shopping to healthcare insurance and

133
00:08:31,440 --> 00:08:37,600
Speaker 1: also prescription drugs. Also just creating electronic marketplace that increases

134
00:08:37,800 --> 00:08:43,880
Speaker 1: transparency and price discovery, also public information about health care services.

135
00:08:44,320 --> 00:08:47,120
Speaker 1: We could see UH it open up the door to

136
00:08:47,720 --> 00:08:52,240
Speaker 1: suppliers to provide services to a broader range of customers,

137
00:08:52,320 --> 00:08:55,480
Speaker 1: um and tying these prices more to supply and demands.

138
00:08:55,880 --> 00:08:59,120
Speaker 1: So a lot of the changes was seeing Amazon already

139
00:08:59,160 --> 00:09:05,080
Speaker 1: implement in other products. Um again, the frequency of price change,

140
00:09:05,400 --> 00:09:09,520
Speaker 1: the data collection, all of this has really disrupted a

141
00:09:09,520 --> 00:09:14,000
Speaker 1: lot of different industries, including textbooks where it started, also apparel.

142
00:09:14,480 --> 00:09:17,840
Speaker 1: Now it's just getting into groceries. So I don't see

143
00:09:17,880 --> 00:09:20,720
Speaker 1: any reason why we couldn't see some of those tactics

144
00:09:20,760 --> 00:09:25,200
Speaker 1: also applied to healthcare, despite some of the hurdles and

145
00:09:25,240 --> 00:09:28,920
Speaker 1: obstacles that were mentioned earlier. And I'll also say, as

146
00:09:28,960 --> 00:09:34,200
Speaker 1: an economics editor, I frequently edit stories about the current

147
00:09:34,240 --> 00:09:37,120
Speaker 1: phenomenon of low inflation, not just in the United States

148
00:09:37,120 --> 00:09:40,160
Speaker 1: but in the global economy, and we've written about how

149
00:09:40,440 --> 00:09:43,120
Speaker 1: Amazon has played a role, or at least some people

150
00:09:43,240 --> 00:09:47,920
Speaker 1: blame Amazon for keeping prices down, which you know, may

151
00:09:48,040 --> 00:09:51,200
Speaker 1: in turn, you know, make global economic growth a little

152
00:09:51,240 --> 00:09:53,400
Speaker 1: more sluggish in this part of the cycle than it

153
00:09:53,440 --> 00:09:57,720
Speaker 1: had been in previous decades. Laura, do you agree with

154
00:09:57,800 --> 00:10:02,239
Speaker 1: that thesis? And as much as holding down healthcare prices

155
00:10:02,360 --> 00:10:06,000
Speaker 1: is a good thing, is that something that could further

156
00:10:06,440 --> 00:10:09,160
Speaker 1: hold down inflation the global economy and keep us talking

157
00:10:09,200 --> 00:10:12,120
Speaker 1: about this topic in years to come. Sure it's a

158
00:10:12,160 --> 00:10:16,280
Speaker 1: great question. So first of all, yes, I think Amazon

159
00:10:16,400 --> 00:10:21,040
Speaker 1: definitely has had an effect on retail pricing and core

160
00:10:21,160 --> 00:10:25,439
Speaker 1: goods inflation. However, we should keep in mind that's only

161
00:10:25,760 --> 00:10:30,360
Speaker 1: a small share of our total inflation goods prices excluding

162
00:10:30,400 --> 00:10:35,520
Speaker 1: food and energy, or only of our total consumer basket. Um.

163
00:10:35,559 --> 00:10:38,200
Speaker 1: So Amazon has had an impact and I would expect

164
00:10:38,200 --> 00:10:43,080
Speaker 1: that impact to continue over time. Another source of the

165
00:10:43,120 --> 00:10:47,559
Speaker 1: disinflation that is related to this partnership but isn't directly

166
00:10:47,600 --> 00:10:51,320
Speaker 1: a consequence of Amazon by any means, is just the

167
00:10:51,400 --> 00:10:57,400
Speaker 1: government and again our nations desire to lower healthcare costs

168
00:10:57,520 --> 00:11:01,640
Speaker 1: across the board. Healthcare is a our share of our economy.

169
00:11:02,000 --> 00:11:05,959
Speaker 1: Healthcare costs has been rising faster than total inflation. The

170
00:11:06,080 --> 00:11:09,640
Speaker 1: said that its inflation target at a time when healthcare

171
00:11:09,720 --> 00:11:13,920
Speaker 1: costs were rising a lot faster. Now they're not, and

172
00:11:14,920 --> 00:11:19,560
Speaker 1: the Amazon partnership looks like it could bring more disruption

173
00:11:19,679 --> 00:11:24,240
Speaker 1: to those prices and maybe even bring them down even further.

174
00:11:25,080 --> 00:11:28,640
Speaker 1: So we're going to see a period where, due to this,

175
00:11:29,040 --> 00:11:34,400
Speaker 1: in part innovation and changes in business models, we're seeing

176
00:11:34,520 --> 00:11:38,080
Speaker 1: less health care inflation, and that's lowering total inflation. It's

177
00:11:38,120 --> 00:11:41,480
Speaker 1: not a sign that the economy is weak. It's not

178
00:11:41,559 --> 00:11:46,000
Speaker 1: a sign that we're losing momentum or that we're near deflation.

179
00:11:46,320 --> 00:11:48,560
Speaker 1: It's just going to make it harder for the FED

180
00:11:48,600 --> 00:11:51,679
Speaker 1: to achieve its inflation target. And it and it says

181
00:11:51,720 --> 00:11:53,920
Speaker 1: that all health equal, the FED can afford to be

182
00:11:53,920 --> 00:11:57,680
Speaker 1: a little more patient and normalizing its policy in order

183
00:11:57,679 --> 00:12:01,200
Speaker 1: to get overall inflation up to that two percent level.

184
00:12:01,559 --> 00:12:05,479
Speaker 1: And we're talking just after the stock market has undergone

185
00:12:05,600 --> 00:12:09,600
Speaker 1: a pretty steep drop, and you know, partly on fears

186
00:12:09,679 --> 00:12:12,160
Speaker 1: that the Fed was going to race rates faster because

187
00:12:12,240 --> 00:12:15,440
Speaker 1: inflation was rising, because wages were rising a little faster.

188
00:12:15,760 --> 00:12:18,840
Speaker 1: So this, all things being equal, would lean a little

189
00:12:18,840 --> 00:12:23,080
Speaker 1: bit against the narrative of inflation rising at a faster

190
00:12:23,160 --> 00:12:27,080
Speaker 1: pace than the FED having to raise rates. Right absolutely.

191
00:12:27,080 --> 00:12:29,720
Speaker 1: In fact, I really think the market is going to

192
00:12:29,840 --> 00:12:34,160
Speaker 1: be disappointed if it's looking for an acceleration and inflation.

193
00:12:34,280 --> 00:12:37,920
Speaker 1: There are a lot of forces that will likely keep

194
00:12:37,960 --> 00:12:42,160
Speaker 1: inflation lower this expansion, even as we move towards the later,

195
00:12:42,840 --> 00:12:45,840
Speaker 1: the later phases of this expansion, Even if we see

196
00:12:45,840 --> 00:12:50,160
Speaker 1: actual weakness in the stock market and tightness in the

197
00:12:50,240 --> 00:12:55,040
Speaker 1: labor market, there are forces such as technology such as healthcare,

198
00:12:55,679 --> 00:13:00,480
Speaker 1: that are lowering inflation, depressing it relative to where it

199
00:13:00,520 --> 00:13:03,400
Speaker 1: should be given where we are in the cycle, and

200
00:13:03,679 --> 00:13:07,240
Speaker 1: and I think ultimately the market will be a little

201
00:13:07,280 --> 00:13:10,880
Speaker 1: disappointed when inflation comes in more muted. Again, it's not

202
00:13:10,920 --> 00:13:13,680
Speaker 1: a bad thing. I think any central banker would love

203
00:13:13,760 --> 00:13:18,400
Speaker 1: to have, you know, the puzzle of pretty low, stable

204
00:13:18,440 --> 00:13:22,479
Speaker 1: inflation and a tight labor market and a booming economy.

205
00:13:22,520 --> 00:13:26,160
Speaker 1: Those are that's a great problem to have. A lot

206
00:13:26,200 --> 00:13:28,760
Speaker 1: of people would like to have that problem. But let's

207
00:13:28,800 --> 00:13:31,520
Speaker 1: talk a little bit more about Jeff Bezos and what

208
00:13:31,679 --> 00:13:35,120
Speaker 1: he wants. I want to go back to Spencer again.

209
00:13:35,400 --> 00:13:37,280
Speaker 1: I know you said that the details are kind of

210
00:13:37,320 --> 00:13:41,319
Speaker 1: scant on this partnership. Bezos is working with Buffett and

211
00:13:41,400 --> 00:13:45,800
Speaker 1: Diamond on this new venture. But knowing Jeff Bezos and

212
00:13:45,840 --> 00:13:49,640
Speaker 1: how he gets into a business and disrupts it, takes

213
00:13:49,640 --> 00:13:53,840
Speaker 1: it over. Is Jeff Bezos looking for anything less than

214
00:13:54,400 --> 00:13:57,640
Speaker 1: some kind of total domination in the healthcare industry? Spencer,

215
00:13:58,200 --> 00:14:03,600
Speaker 1: I don't know about total domination, but definitely increased efficiency,

216
00:14:03,880 --> 00:14:08,719
Speaker 1: lower prices, and greater selection. When you think about healthcare,

217
00:14:09,000 --> 00:14:14,560
Speaker 1: if you're in an employer sponsored plan, which much of

218
00:14:14,559 --> 00:14:19,880
Speaker 1: the country is, your choices are locked in. And Amazon's

219
00:14:20,000 --> 00:14:23,400
Speaker 1: entire business model has been giving customers the most abundant

220
00:14:23,440 --> 00:14:29,400
Speaker 1: inventory at affordable prices with the greatest convenience. And so

221
00:14:30,160 --> 00:14:33,480
Speaker 1: you can think of any number of friction points in

222
00:14:33,920 --> 00:14:38,120
Speaker 1: your experience that they'll be targeting. They'll be looking at

223
00:14:38,160 --> 00:14:43,040
Speaker 1: any inefficiency, looking at eliminating middlemen. Um and Laura mentioned earlier,

224
00:14:43,080 --> 00:14:46,800
Speaker 1: just this notion of transparency, that's something that Amazon really

225
00:14:46,800 --> 00:14:50,800
Speaker 1: brought to retail goods with where people are even show

226
00:14:50,920 --> 00:14:53,520
Speaker 1: rooming on their smartphones. You know, you're in the aisle

227
00:14:53,560 --> 00:14:56,200
Speaker 1: of target looking at a product and you can check

228
00:14:56,240 --> 00:14:57,560
Speaker 1: on your phone to see if you get a better

229
00:14:57,560 --> 00:15:00,960
Speaker 1: deal from Amazon. This notion of price transparency that they

230
00:15:01,000 --> 00:15:05,680
Speaker 1: brought to the retail world is really absent in healthcare,

231
00:15:06,120 --> 00:15:09,160
Speaker 1: where you basically get a prescription, go to a pharmacy,

232
00:15:09,200 --> 00:15:11,520
Speaker 1: show him your health plan, and and pay what you're

233
00:15:11,520 --> 00:15:14,320
Speaker 1: told you're you're you're pretty much locked in. And so

234
00:15:14,360 --> 00:15:16,640
Speaker 1: if there are there are a number of opportunities that

235
00:15:16,680 --> 00:15:23,040
Speaker 1: they'll be looking for to increase consumer choice, eliminate inefficiencies,

236
00:15:23,240 --> 00:15:27,080
Speaker 1: and and and lower prices. Now, Spencer, they also said

237
00:15:27,120 --> 00:15:30,080
Speaker 1: that they're going to do this through an independent company

238
00:15:30,120 --> 00:15:34,400
Speaker 1: that's free from profit making incentives and constraints. How does

239
00:15:34,440 --> 00:15:38,480
Speaker 1: that jibe with Amazon's philosophy. Jeff Bezos is desired to

240
00:15:39,040 --> 00:15:42,560
Speaker 1: also give shareholders profits, and you know same for Buffet

241
00:15:42,600 --> 00:15:45,760
Speaker 1: and Time and as well well. Bezos isn't really known

242
00:15:45,760 --> 00:15:49,080
Speaker 1: for giving shareholders profits, so it aligns with his strategy.

243
00:15:49,120 --> 00:15:51,640
Speaker 1: That's where there may be some tension with UH, with

244
00:15:51,720 --> 00:15:54,480
Speaker 1: his partner C. E O S and his venture, but

245
00:15:55,040 --> 00:15:57,680
Speaker 1: he has a famous saying, your margin is my opportunity.

246
00:15:58,080 --> 00:16:00,160
Speaker 1: And so if you look at the double digit off

247
00:16:00,160 --> 00:16:03,280
Speaker 1: at margins of the insurance industry, you know that's certainly

248
00:16:03,280 --> 00:16:05,520
Speaker 1: a place where where they're going to be looking for

249
00:16:05,560 --> 00:16:08,880
Speaker 1: some fat that that can be trimmed. And Laura, that

250
00:16:09,040 --> 00:16:11,760
Speaker 1: same thing would hold for inflation. If you're looking to

251
00:16:12,400 --> 00:16:14,600
Speaker 1: reduce profit margins, if you don't have that kind of

252
00:16:14,640 --> 00:16:17,680
Speaker 1: margin pressure, that's something else that's probably going to be

253
00:16:17,800 --> 00:16:21,480
Speaker 1: weighing on prices, right, Yeah, I would expect So I

254
00:16:21,480 --> 00:16:25,200
Speaker 1: think I think again, if you look at the examples

255
00:16:25,280 --> 00:16:32,560
Speaker 1: in the retail industry, apparel, appliances, digital textbooks, I mean,

256
00:16:32,800 --> 00:16:37,560
Speaker 1: there are a lot of examples of where technology has

257
00:16:37,560 --> 00:16:41,680
Speaker 1: reduced inflation rates, not just the price level, but actually

258
00:16:41,720 --> 00:16:45,680
Speaker 1: it's changed price setting behavior. And I think that there's

259
00:16:45,800 --> 00:16:48,800
Speaker 1: scope and it will be interesting to see how this

260
00:16:48,920 --> 00:16:53,880
Speaker 1: partnership UH evolves in what what implications it has for

261
00:16:53,920 --> 00:16:59,840
Speaker 1: this much larger share of the consumer basket, which is healthcare. Well,

262
00:17:00,080 --> 00:17:02,440
Speaker 1: twenty years ago, I'm not sure most of us could

263
00:17:02,440 --> 00:17:05,000
Speaker 1: have envisioned how Amazon would be part of our daily

264
00:17:05,040 --> 00:17:07,520
Speaker 1: lives today, and I'm sure we're going to be saying

265
00:17:07,680 --> 00:17:11,359
Speaker 1: something similar to twenty years from now. Laura Rosner, Spencer Soaper,

266
00:17:11,400 --> 00:17:13,840
Speaker 1: thank you so much for joining us on Benchmark today.

267
00:17:14,280 --> 00:17:20,600
Speaker 1: Thank you. Benchmark will be back next week. Until then,

268
00:17:20,680 --> 00:17:23,720
Speaker 1: you can find us on the Bloomberg terminal, Bloomberg dot com,

269
00:17:23,800 --> 00:17:26,560
Speaker 1: or Bloomberg app, as well as wherever you enjoy podcasts,

270
00:17:26,560 --> 00:17:30,400
Speaker 1: including Apple Podcasts, Bloombercast and Stitcher. Please take the time

271
00:17:30,440 --> 00:17:32,439
Speaker 1: to rate and review the show while you're there, and

272
00:17:32,480 --> 00:17:34,760
Speaker 1: you can also find us on Twitter. You can follow

273
00:17:34,800 --> 00:17:38,520
Speaker 1: me at at scott Landman and Spencer. Your handle is

274
00:17:39,000 --> 00:17:42,800
Speaker 1: at Spencer Soaper. Benchmark is produced by tofor for HEAs

275
00:17:42,880 --> 00:17:46,359
Speaker 1: the head of Bloomberg Podcasts is Francesca Leaving. Thanks for listening.

276
00:17:46,520 --> 00:18:05,240
Speaker 1: See you next time. Stat Paper or a boy