Amazon, Berkshire Hathaway and JPMorgan Chase have announced that they will be partnering to launch a new healthcare alliance.
With the aim of “improving employee satisfaction and reducing costs”, the three companies are creating a non-profit, independent healthcare alliance to address healthcare for their US employees.
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As of 2017, the three companies had 840,000 global employees between them.
Shares of major US health insurance firms fell following the announcement, with Anthem and UnitedHealth Group falling by 5% to 10%, respectively.
“The healthcare system is complex, and we enter into this challenge open-eyed about the degree of difficulty,” said Amazon founder and 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. Success is going to require talented experts, a beginner’s mind, and a long-term orientation.”
Although the effort is in its early planning stages, the alliance has the potential to disrupt the health insurance marketplace. By using its bargaining power to negotiate directly with drug manufacturers, the alliance could bypass industry middlemen and provide a lower-cost option for employees.
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By GlobalDataWith spending on healthcare in the US reaching $3.4tn in 2016, the alliance’s aim of providing “simplified, high-quality and transparent healthcare at a reasonable cost” will most likely be welcomed.
“The ballooning costs of healthcare act as a hungry tapeworm on the American economy,” said Berkshire Hathaway chairman and CEO Warren Buffett. “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.” The initial formation of the company will be 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. Further details, including the longer-term management team, headquarters location and key operational details, are yet to be announced.
In the past, other corporations have formed similar alliances with the aim of improving employee healthcare. In 2016, 20 companies including Coca Cola, American Express, IMB and Macy’s joined the Health Transformation Alliance to combine data on the population health of their employees.
