US: Amazon, Berkshire, JPMorgan to form health care co.

By Barry Eitel

SAN FRANCISCO

Amazon, Berkshire Hathaway and JPMorgan Chase announced Tuesday the trio would launch their own health care company for their employees based in the United States.

The surprise announcement sent shares of health insurers plunging during morning trading.

The goal in creating their own program, the three companies announced, was to build a health care company that did not have to be incentivized by profits. Instead, this independent company will focus on providing health care to employees at a “reasonable cost”.

The new company will seek “technology solutions” to health issues, according to the announcement.

“The ballooning costs of healthcare act as a hungry tapeworm on the American economy,” Warren Buffett, the CEO of Berkshire Hathaway, said in a statement. “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 three companies employ 500,000 workers combined. Amazon is the dominant online retailer in the U.S. and JPMorgan is one of the nation’s leading financial firms. Berkshire Hathaway is the world’s third largest publically-traded company.

“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,” Amazon founder and CEO Jeff Bezos said in a statement. “Success is going to require talented experts, a beginner’s mind, and a long-term orientation.”

It was not disclosed if the company would act like a traditional health insurer or be some sort of mediator between employees and insurance companies. While the proposed company would provide health care for workers’ families, it was not clear if it would be expanded to provide health care for the general public.

JPMorgan Chase CEO Jamie Dimon suggested the yet-to-be-invented technology health care “solutions” innovated by their company, at least, would provide long-lasting benefits for others.

“Our people want transparency, knowledge and control when it comes to managing their healthcare,” he said in a statement. “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.”