Amazon's healthcare move takes aim at United States costs

Eileen GuzmanFeb 01, 2018

Amazon, JP Morgan Chase, and Berkshire Hathaway announced today they are forming a non-profit joint venture to manage and streamline their employee healthcare programs.

Shares of United States healthcare companies fell across the board on Wall Street after the news.

"In other words, the same company owns the insurance company and the doctors", he said.

Gary Herschman, an attorney with Epstein, Becker and Green in Newark, said the big players aiming to reverse the trend of higher health care costs by doing it themselves are part of a trend that is forcing providers to adapt and offer services to meet that demand.

There are very little details about the huge move except that it will focus on technology to help provide their current employees and their families with simple high-quality and most importantly affordable healthcare.

The potential disruption from three renowned innovators in technology and finance sent a shock wave through the health care sector, erasing billions in market capitalization in seconds.

Amazon's Galetti, Berkshire Hathaway's investment officer Todd Combs and J.P. Morgan Chase's managing director Marvelle Sullivan Berchtold are now seeking a management team to lead the new company and a headquarters location. But he noted that "the fact that three large, well-capitalized companies with the organizational will plan to attack rising healthcare costs and transparency is just another sign that longer-term, generics and branded pharmaceutical margins are in flux".

In the release announcing the new venture, Bezos, Buffet, and Dimon made a point of saying their companies would pursue lower costs "through an independent company that is free from profit-making incentives and constraints". "ORCRP010217-topic.html" class="local_link" >JPMorgan Chase & Co. to form a new health-care business, an attempt by three of the world's best-known companies to contain the spiraling cost of keeping their USA workers healthy. It was not clear whether the ultimate intention is to move beyond the three companies.

"Our goal is to create solutions that benefit our US employees, their families and, potentially, all Americans", Dimon added in the press release.

One of the people familiar with the partnership between the companies said it took form as Bezos, Buffett, and Dimon, who are friends, discussed the complications of the country's health care system and the challenges of providing insurance to their employees.

And Berkshire CEO Warren Buffett has some decidedly wrongheaded ideas about health care. The decision to make the project public and official was a recent decision which has created more questions than answers for the time being, Faber said. By doing so, Amazon, Berkshire and JPMorgan could gain more control over their spending and save money pharmacy-benefit managers now consume, he said.

Most health care analysts were more skeptical.

He and others added that even if companies aren't collecting - or sharing - medical records, there are a number of other ways a patient's habits and history could be used to glean important information about their health.

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