Amazon, Berkshire Hathaway and JPMorgan Chase, the three corporate moguls, have announced that they would form an independent healthcare company in the United States, for their employees.
This move by the three behemoths, the popular U.S. business leaders would pose serious challenges to the world’s most expensive healthcare system, whose mounting costs have hurt corporate profit. It is now unclear, as for how extensively the three partners have planned to serve their employees, in their existing health coverage, whether they would simply help workers find a local doctor, steer employees to online medical advice or use their muscle to negotiate lower prices for drugs and procedures. This alliance will apply only to their employees.
This venture which is supposedly is not-for-profit, will initially focus on developing technology for a simplified, high-quality and transparent healthcare system for more 500,000 of their US employees. They declined to elaborate on their plans and strategy but said they were searching for a CEO.
Experts and analysts from the healthcare industry say the new alliance might eventually succeed in negotiating directly with drug makers, doctors and hospitals and use their vast databases to get a better handle on the costs of those services.
Berkshire Hathaway Chairman and CEO, Warren Buffet told, comparing the healthcare industry to a tapeworm, the staggering costs of healthcare is like a hungry tapeworm on the American Economy and the alliance is coming to solve the problem with answers, at least to their employees.
US’s spending on healthcare industry has been increasing yearly faster than inflation and accounted for 18 percent of the economy in 2017. More than 160 million Americans are offered health benefits by corporations.
But Tuesday’s announcement landed like a lightning, sending stocks of insurers and other major health companies down under. Shares of healthcare companies like UnitedHealth Group and Anthem plunged, dragging down the broader stock market.