Amazon, Berkshire Hathaway, JPMorgan create healthcare venture
A recent article in Fierce HealthCare shared that the three companies announced today they are partnering on ways to address healthcare for their U.S. employees, with the aim of improving employee satisfaction and reducing costs.
The partnership brings together three of the country’s most influential companies to try to improve a system that other companies have tried and failed to change: Amazon, the largest online retailer in the world; Berkshire Hathaway, the holding company led by the billionaire investor Warren E. Buffett; and JPMorgan Chase, the largest bank in the United States by assets.
The new venture 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 healthcare system is complex, and we enter into this challenge open-eyed about the degree of difficulty,” 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.”
While the specifics of the new company are still in the planning stages, the initial focus will be on technology solutions that provide “simplified, high-quality and transparent healthcare at a reasonable cost.”
Even before Tuesday’s announcement, there have been signs that Amazon is preparing to enter the healthcare market. Earlier this month, the company posted a job for an “experienced HIPAA professional.” Meanwhile, some hospitals have been testing out Amazon’s Alexa in the clinical environment.
Each of the companies already has some interplay with the health care system.
A USA Today article states Amazon has been exploring plans to enter the pharmacy market as a drug distributor. Indeed, analysts have speculated that CVS’ blockbuster deal to purchase Aetna is at least partially a reaction to Amazon’s rumored plans to disrupt the pharmacy supply chain.
Berkshire has among its companies, health care liability insurer MedPro Group.
And the JPMorgan Chase Institute studies health care costs, finding in an October 2017 report that health care spending is expected to grow faster than gross domestic product through 2025. U.S. spending on health care rose from 13% of GDP in 2000 to 18% in 2015.
The move also speaks to the desire to rip apart the traditional health-care system from distinctive silos. Experts have anticipated more deals and vertical integration in wake of CVS announcing its intention to buy Aetna.