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a patient is treated for the flu by float nurse Nellie Reyes in the emergency room at Palomar Medical Center in Escondido California
Image: a patient is treated for the flu by float nurse Nellie Reyes in the emergency room at Palomar Medical Center in Escondido California. REUTERS/Mike Blake

Amazon, JPMorgan and Berkshire Hathaway Join Forces for US Healthcare

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Image: a patient is treated for the flu by float nurse Nellie Reyes in the emergency room at Palomar Medical Center in Escondido California. REUTERS/Mike Blake

The three American giants are pooling resources to offer their employees improved, affordable healthcare. David Kirkpatrick, CEO of Techonomy, called the healthcare partnership “brilliant.”

The Healthcare Challenge

Jeff Bezos has been trying to break his way into health care for some time now. This has been an open interest. However, the Amazon founder and CEO still managed to surprise both the business and healthcare communities in the United States when he came together with Jamie Dimon and Warren Buffett in this effort.

That however is exactly what is happening. Amazon, JPMorgan Chase, and Berkshire Hathaway are pooling their resources in order to change the way their American employees receive health care. This new angle for group health care coverage is stunning the industry.

The Healthcare Plan

The intention of this strategy, which remains in its preliminary stages and is focused exclusively on the employees of these American companies for the moment, will nearly definitely disrupt the way the wider healthcare industry will function in the future.

This represents the first major move Amazon has taken in the healthcare industry, an area in which the country has been setting its sights for a considerable amount of time. The industry has been waiting for the company to make its first move to step in.

The partnership among Amazon, JPMorgan Chase, and Berkshire Hathaway will disrupt the supply chain for healthcare by placing pressure on the middlemen to profit.

Healthcare Stocks Fall

The three companies have jointly created an independent business “that is free from profit-making incentives and constraints.” That step was enough to cause healthcare stocks to tumble in the United States.

Both CVS Health and Express Scripts Holding saw notable initial stock slumps: 4.9 percent and 6.9 percent respectively. Similarly, Anthem Inc. and Cigna Corp, the health insurance giants saw slipping stock prices as did biotechnology companies.

American Healthcare’s Future

The group of companies did not make their announcement at such an early phase in order to cause harm to the health care industry. Instead, it wanted to reveal its intentions so it would be able to start partnering with other organizations as well as so it could hire a CEO, reported Bloomberg.

While the initial effort of the independent company will be to cover the U.S. employees of the three American giants, while reducing their healthcare costs and boosting their bargaining power, the long term goals are loftier. The hope is to demonstrate a new way of thinking for American healthcare to improve the quality of life for employees and their families in an affordable way. Eventually, the initiative could move beyond the three companies.

“Hard as it might be, reducing health care’s burden on the economy while improving outcomes for employees and their families would be worth the effort,” said Bezos. “Success is going to require talented experts, a beginner’s mind, and a long-term orientation.”

Note: The opinions expressed in this article are the author's own and do not necessarily reflect the view of Alvexo on the matter.