An announcement from Jeff Bezos, Jamie Dimon, and Warren Buffet this week sent healthcare stocks tumbling and set media abuzz with speculation and surprise.
While that speculation ranged from “end of all healthcare woes” to “the end of all things single payer!” In truth, there is very little we do know except that it is intended to cover the industry giant’s employees and families. The press release and past interviews (here is a Warren Buffet interview) with the three CEOs certainly have all the right motives and tools to make big changes in healthcare and insurance game. Given the landscape of US healthcare system, its unclear how real significant savings could be achieved without finding a way to more efficiently use the federal funding currently poured into a myriad of health insurance and assistance programs (none of which effectively negotiate drug prices).
In a statement, Jeff Bezos indicated he understands the enormous complexity of “the healthcare system.” Considering just how much an understatement I know that is, it has been difficult to even speculate what these companies will have in store for this venture. I’ve no doubt it will come with high tech innovation, but how much it might benefit those that aren’t employees wasn’t a part of the announcement.
While intriguing, there simply aren’t enough details to speculate yet to much further.
Here’s the full press release:
Amazon (NASDAQ: AMZN), Berkshire Hathaway (NYSE: BRK.A, BRK.B) and JPMorgan Chase & Co. (NYSE: JPM) announced today that they are partnering on ways to address healthcare for their U.S. employees, with the aim of improving employee satisfaction and reducing costs. The three companies, which bring their scale and complementary expertise to this long-term effort, will pursue this objective through an independent company that is free from profit-making incentives and constraints. The initial focus of the new company will be on technology solutions that will provide U.S. employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost.
Tackling the enormous challenges of healthcare and harnessing its full benefits are among the greatest issues facing society today. By bringing together three of the world’s leading organizations into this new and innovative construct, the group hopes to draw on its combined capabilities and resources to take a fresh approach to these critical matters.
“The ballooning costs of healthcare act as a hungry tapeworm on the American economy. Our group does not come to this problem with answers. But we also do not accept it as inevitable. Rather, we share the belief that putting our collective resources behind the country’s best talent can, in time, check the rise in health costs while concurrently enhancing patient satisfaction and outcomes,” said Berkshire Hathaway Chairman and CEO, Warren Buffett.
“The healthcare system is complex, and we enter into this challenge open-eyed about the degree of difficulty,” said Jeff Bezos, Amazon founder and CEO. “Hard as it might be, reducing healthcare’s burden on the economy while improving outcomes for employees and their families would be worth the effort. Success is going to require talented experts, a beginner’s mind, and a long-term orientation.”
“Our people want transparency, knowledge and control when it comes to managing their healthcare,” said Jamie Dimon, Chairman and CEO of JPMorgan Chase. “The three of our companies have extraordinary resources, and our goal is to create solutions that benefit our U.S. employees, their families and, potentially, all Americans,” he added.
The effort announced today is in its early planning stages, with the initial formation of the company jointly spearheaded by Todd Combs, an investment officer of Berkshire Hathaway; Marvelle Sullivan Berchtold, a Managing Director of JPMorgan Chase; and Beth Galetti, a Senior Vice President at Amazon. The longer-term management team, headquarters location and key operational details will be communicated in due course.