From today’s LA Times:
Three of the nation’s most formidable companies — Amazon.com, Berkshire Hathaway Inc. and JPMorgan Chase & Co. — sent shock waves through the healthcare industry Tuesday by announcing a joint plan to reduce healthcare costs for their U.S. employees.
Although the companies said their focus mainly would be on providing improved healthcare for their own U.S. workers, which total nearly 1 million, the move immediately triggered speculation that any solutions they develop could spread throughout the industry.
That sent healthcare, drug and health-insurance stocks tumbling even though the three companies provided few initial details about their venture, with investors guessing that the trio’s initiative eventually could crimp sales growth and profits for others in the healthcare field.
Consumers might see a benefit if the companies could develop a blueprint for curbing the surge in healthcare and drug costs while maintaining or enhancing patient care, a scenario that government and the industry so far have struggled to achieve.
The speculation of a disruption to the industry was fueled by the stature of the three companies’ billionaire chief executives: Amazon’s Jeff Bezos, who already has radically changed the retail industry; Warren Buffett, the famed investor who also oversees dozens of companies under Berkshire’s umbrella; and Jamie Dimon, whose JPMorgan Chase is the nation’s largest bank with $2.5 trillion in assets.
Bezos and Buffett also are two of the nation’s richest people, with net worths of $119 billion and $92 billion, respectively, while Dimon’s net worth is just over $1 billion, according to Forbes.
The three said they would start “an independent company that is free from profit-making incentives and constraints” and that its early focus “will be on technology solutions” that would provide “simplified, high-quality and transparent healthcare at a reasonable cost.”
Read the complete article here.