The richest person in the world is partnering with the Oracle of Omaha to tackle the vexing issue of America’s costly healthcare system.
Amazon founder and CEO Jeff Bezos and Berkshire Hathaway Chairman and CEO Warren Buffett announced Tuesday they would partner with JPMorgan Chase & Co. to find technology solutions to provide their U.S.-based employees with simplified, high-quality, and transparent healthcare at a reasonable cost.
“The ballooning costs of healthcare act as a hungry tapeworm on the American economy,” said Buffett in a press release. “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 three companies, which employ approximately 1.1 million people in the U.S., will create an independent company “free from profit-making incentives and constraints” to pursue this goal. The entity will be led by Beth Galetti, a senior vice president at Amazon; Todd Combs, an investment officer of Berkshire Hathaway; and Marvelle Sullivan Berchtold, a managing director at JPMorgan Chase & Co.
“The healthcare system is complex, and we enter into this challenge open-eyed about the degree of difficulty,” added Bezos. “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.”
Some analysts see similarities between Amazon’s history of disrupting established industries, such as booksellers and grocery stores, and this new move, which could go head-to-head with healthcare companies, such as Aetna, Cigna, and UnitedHealth.
“The announcement was pretty light on specifics in terms of what this new company will actually do,” said Will Hinde, healthcare managing director at the consulting firm West Monroe Partners, which has offices throughout the U.S., including Seattle. “At this point, they could be talking as small as employee clinics and as large as the largest integrated healthcare company. But the industry is ripe for disruption, and this group of companies has the money and intelligence to succeed.”