What we know about the new healthcare company Amazon, JPMorgan, and Berkshire Hathaway are forming

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Jeff Bezos

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It’s official: Amazon is getting into healthcare.

Amazon, along with Warren Buffett’s Berkshire Hathaway and JPMorgan, are teaming up to form an independent venture that’ll be focused on healthcare for their US employees.

“The healthcare system is complex, and we enter into this challenge open-eyed about the degree of difficulty,” Amazon CEO Jeff Bezos said, the first time he’s addressed the company’s healthcare interests since news the online retail giant was making moves to potentially enter the sector bubbled up in 2017. “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.”

Here’s what we know about the new venture

  • The new independent company will be nonprofit.
  • To start, the focus of the company will be on technology solutions that will provide “simplified, high-quality and transparent healthcare at a reasonable cost.”
  • The venture will be geared toward employees of the three companies, rather than healthcare consumers overall in the US, though JPMorgan CEO Jamie Dimon said that potentially, all Americans could benefit.
  • The hope is to lower the cost of healthcare while at the same time improving health outcomes and patient experiences.

Beyond that, there aren’t a lot of specifics about how the three companies will reach the goal of lowering costs and improving outcomes.

“Our group does not come to this problem with answers. But we also do not accept it as inevitable,” Buffett said in the release.

In its initial stages, the venture will be led by Berkshire Hathaway investment officer Todd Combs, JPMorgan managing director Marvelle Sullivan Berchtold, and Amazon senior vice president Beth Galetti.

Combs has been frequently cited as Buffett’s potential successor and also serves as a board member at JPMorgan. Sullivan Berchtold joined JPMorgan in August 2017, according to her LinkedIn page. Prior to working at JPMorgan, she was the global head of mergers and acquisitions at the pharmaceutical giant Novartis. Galetti is the senior vice president of human resources at Amazon, according to LinkedIn.

It’s still unclear whether the joint venture will create its own health plan, or if it will take another approach to tackling healthcare costs for employers. Even so, the news was enough to send healthcare stocks – especially pharmaceutical supply chain members and health insurers – plummeting on Tuesday morning.

The companies also noted that more details about the venture will be announced later, including where it will be based.