- Kevin Lamarque/Reuters
- Amazon, Berkshire Hathaway, and JPMorgan are teaming up to launch a new healthcare company.
- The move came as a shock to the healthcare industry, sending stocks plummeting on Tuesday morning.
- Jeff Bezos, Warren Buffett and Jamie Dimon have spoken at length about the healthcare system in the past.
Jamie Dimon, Jeff Bezos, and Warren Buffett have a new plan to tackle the rising cost of healthcare in the US.
Bezos’s Amazon, along with Buffett’s Berkshire Hathaway and Dimon’s 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,” Bezos said in a release. “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.”
So far, the companies have only provided a few details about the initial phase of the joint venture, so it’s unclear exactly how this new effort will play out. But healthcare has been on these business titans’ radars for a while, and what they’ve said could inform how this venture ultimately works.
Buffett has been the most outspoken, saying that he supports a single-payer system, in which the government provides near-universal healthcare coverage.
“With my limited knowledge, I think that probably is the best system, because it is a system – we are such a rich country. In a sense, we can afford to do it,” Buffett told PBS’s “News Hour” in June 2017. “But in almost every field of American business, it pays to bring down costs. There’s an awful lot of people involved in the medical – the whole – just the way the ecosystem works, that there is no incentive to bring down costs.”
And on multiple occasions he has compared costs to a parasitic worm.
Charlie Munger, Berkshire Hathaway’s vice chairman, has also been outspoken about moving to a single-payer healthcare system. Munger is a fan of Kaiser Permanente, a health system on the West Coast that contains both health plans and healthcare providers. “If the whole nation had Kaiser Permanente care, the average quality of the care would go way up and the cost would go way down,” Munger said.
If healthcare in the US were to move toward a more single-payer system, it might look a lot like that.
JPMorgan CEO Jamie Dimon has had the frustration people have over their healthcare costs on his mind as well.
“Low job growth, a lack of opportunity for many, declining wages, students and low wage workers being left behind, economic and job uncertainty, high healthcare costs and growing income inequality all have created deep frustration,” Dimon wrote in his 2016 annual letter.
Amazon CEO Jeff Bezos hasn’t said a whole lot about healthcare above considering the potential for artificial intelligence, including Amazon’s voice assistant Alexa, to help with an individual’s health. Bezos’s personal venture capital arm has invested in a number of biotech companies, including Grail, a company developing a cancer-screening blood test to catch cancer early on, and Zocdoc, Denali Therapeutics, and Juno Therapeutics.
The three are going to have a lot to prove. This isn’t the first time employers have banded together to try to lower healthcare costs. While the news sent healthcare stocks plummeting on Tuesday morning, analysts were skeptical of any imminent disruption.