Amazon, Berkshire Hathaway and JP Morgan Chase have announced that they were banding together to provide healthcare for their 1.1 million employees.
For this purpose they plan to form a company “free from profit-making incentives and constraints” in order to improve employee satisfaction with their healthcare coverage as well as reduce costs.
The company initially will focus on technology solutions that provide U.S. employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost.
“The ballooning costs of healthcare act as a hungry tapeworm on the American economy,” said Berkshire Hathaway CEO Warren Buffett.
“Our group does not come to this problem with answers,” he continued, “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.”
The companies are keenly aware of the difficulties in front of them, said Amazon CEO Jeff Bezos.
“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,” he maintained. “Success is going to require talented experts, a beginner’s mind, and a long-term orientation.”
The trio’s healthcare initiative could reach beyond their employees, suggested JP Morgan Chairman Jamie Dimon.
“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 said.
Still in the formative stages, the healthcare initiative will be led 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 new company will likely be a big buyer of healthcare products and services with pricing leverage that can hurt the profit margins of existing healthcare players,” he told TechNewsWorld. customer interfaces, use of advanced analytics, and its negotiating power with suppliers in the e-commerce space,” he explained. “They will likely use these skills to disrupt the markets for healthcare products and services.”
One motive driving these companies is the desire to make employees healthier, said Jack E. Gold, principal analyst at J.Gold Associates.
“What they’re trying to do here is establish a program that lowers cost by making people healthier and using technology to do that,” he told TechNewsWorld. “If we can make people healthier, insurance costs should go down because they won’t be in doctors’ offices so often.”