Three of the largest companies in the United States are teaming up to improve healthcare for their employees. Amazon, Berkshire Hathaway, and JPMorgan Chase are in early talks to start a healthcare company for employees of these companies.
Using technology, all three want to cut down the costs of healthcare and reduce expenditures for employees.
Hungry Tapeworm On The American Economy
There still aren't any details available on how the new company will be structured and how it would work among the three giants. This move could disrupt the healthcare market in the United States as after the announcement was made, healthcare companies had dropped in the stock market.
The three companies employ more than 1.1 million people. Amazon reported in October that it has 541,900 employees worldwide. Warren Buffett's Berkshire Hathaway employed 367,000 by the end of 2016. JPMorgan Chase employs more than 240,000 people.
"The ballooning costs of healthcare act as a hungry tapeworm on the American economy. Our group does not come to this problem with answers. But we also do not accept it as inevitable," said Warren Buffett in a statement announcing the new company. "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 statement says that the three companies will be working to come up with a company that is free from "profit-making incentives and constraints." The new company would be focused on providing the U.S. employees and their families a more transparent healthcare experience with the aid of technology.
Amazon Healthcare Disruption
For some time now, Amazon has been rumored to be stepping into the healthcare arena. This is the company's most aggressive move yet.
In May 2017, the company was looking for a general manager to strategize its move into the pharmaceutical business.
Amazon then acquired pharmaceutical licenses in several states in the United States but said it only did so to sell medical supplies. While the licenses Amazon acquired wouldn't sell or store drugs, it has been in discussions with generic drugmakers.
There are also reports saying that Amazon's bullish move motivated the CVS-Aetna merger as a preemptive strike to Amazon stepping into the healthcare market.
In a statement about the new healthcare company, Amazon founder Jeff Bezos says that one of the reasons for starting the company is to reduce healthcare's burden on the economy. In 2017, healthcare spending has accounted for about 18 percent of the U.S. economy.
