:bpohh:Amazon, Berkshire Hathaway and JPMorgan Team Up to Disrupt Health Care
Amazon, Berkshire Hathaway and JPMorgan Team Up to Disrupt Health Care
By NICK WINGFIELD and KATIE THOMASJAN. 30, 2018
Employees at an Amazon warehouse in Florence, N.J. The company will join forces with Berkshire Hathaway, and JPMorgan Chase to try to improve health care. CreditBryan Anselm for The New York Times
SEATTLE — Amazon, Berkshire Hathaway and JPMorgan Chase announced on Tuesday that they would form an independent health care company to serve their employees in the United States.
The three companies provided few details about the new entity, other than saying it would initially focus on technology to provide simplified, high-quality health care for their employees and their families, and at a reasonable cost. They said the initiative, which is in the early planning stages, would be a long-term effort “free from profit-making incentives and constraints.”
The partnership brings together three of the country’s most influential companies to try to improve a system that other companies have tried and failed to change: Amazon, the largest online retailer in the world; Berkshire Hathaway, the holding company led by the billionaire investor Warren E. Buffett; and JPMorgan Chase, the largest bank in the United States by assets.
It also illustrates the rapid changes affecting the sector in the United States, where lines that have separated traditionally distinct sectors, like care provision and insurance, are increasingly blurred. CVS Health’s deal last month to buy the health insurer Aetna for about $69 billion is just one example of the shifts underway.
“It could be big,” Ed Kaplan, who negotiates health coverage on behalf of large employers as the national health practice leader for the Segal Group, said of the announcement. “Those are three big players, and I think if they get into health care insurance or the health care coverage space they are going to make a big impact.
Mr. Kaplan said larger insurers were frustratingly inefficient when it came to fixing problems like preventing people from visiting the emergency room when they did not need to, or requiring a doctor’s visit for routine tasks like refilling a prescription.
“There should be a way to avoid things like that, but they’re not really innovating,” he said of existing health insurance companies. “They’re talking a good game, but they’re not really doing it.”
He said Amazon, Berkshire Hathaway and JPMorgan Chase would face challenges such as assessing risk and other skills that competing insurers are skilled at, but that they could hire talented employees who could provide that.
“The health care system is complex, and we enter into this challenge open-eyed about the degree of difficulty,” Jeff Bezos, Amazon’s founder and chief executive, said in a statement. “Hard as it might be, reducing health care’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.”
Amazon has long been mentioned by health care analysts and industry executives as a potential new entrant into the sector. But much else is also changing, from possible changes to government programs like Medicare after the overhaul of the tax law, to the uncertain future of the Affordable Care Act. All the while, medical costs have persistently been on the rise.
“The ballooning costs of health care act as a hungry tapeworm on the American economy,” Mr. Buffett said in the statement on Tuesday. “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.”
The announcement on Tuesday again highlighted investor worry about Amazon disrupting the health care industry. Shares of UnitedHealth were down 5 percent in premarket trading, while Anthem’s were down 3.5 percent, erasing many of the gains such companies have made over the past 12 months.
We are doomed. Bow before our dystopian cyberpunk future.
I don't trust megacorporations to do anything other than make it as cheap as possible on their end.
Is an Amazon drone going to take my blood pressure while investing algorithms use my heartbeat to try to short the market?
