Three of the biggest corporations in the U.S. are teaming up to revolutionize the industry that many see as broken and in deep need of revitalization.
Amazon, Berkshire Hathaway and JPMorgan Chase are coming together to create a new healthcare company with the goal of providing their employees high-quality care for a low price. Together, the three companies have well over 500,000 employees in the U.S. alone. Amazon themselves will be adding around 50,000 more with their HQ2.
The initial focus of the new entity will be on new technological solutions that allow U.S. employees and their families to access simplified, high-quality and transparent health care. This will be a long-term project that will be free from profit-making incentives and constraints.
“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.”
It seems that the three massive companies do not have immediate answers to one of the U.S.’ largest issues, but the sheer amount of resources they can throw at the problem is more than enough to offer cutting-edge solutions and dive incredibly deep into the situation. The notion of a fresh approach to the healthcare industry is enticing but daunting, even for the combined trillion-dollar-plus revenues of Amazon, JPMorgan Chase, and Berkshire Hathaway.
“The healthcare system is complex, and we enter into this challenge open-eyed about the degree of difficulty,” said Jeff Bezos, Amazon founder and CEO. “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.”
The new health care company is in the early stages of planning and will be spearheaded by several executives from each of the representative companies. A concrete headquarters and management team will be announced at a later date. Still though, the mere idea of these three companies coming together to disrupt the space, even if it is only for their employees, will force the hands of the U.S. pharmaceutical and medical for-profit sector, possibly leaving them scrambling and looking for ways to answer the growing demand for transparent care.
The announcement even drew official responses from the government, as the White House’s economic advisor went on CNBC to discuss the plan, saying that they believe individual workers should have better healthcare for less.
Health care association companies like this have been successful before; Kaiser Permanente, who’s revenue approached $65 billion in 2016, started as a care company for workers in the Kaiser shipyards.
A possible downside is that these three companies already have large healthcare companies working with them for benefits and insurance. If Amazon, Berkshire Hathaway and JPMorgan CHase were to drop contracts with these providers, it could be a serious hit to those companies and result in jobs and revenue lost.