Corporate Giants Join In Health Insurance Effort

Marcus Newton
February 1, 2018

The new venture gives Amazon another industry to shake up. The Health Transformation Alliance, a group of 46 large employers launched two years ago to fix the health-care system, negotiated better drug contracts with CVS Health Corp. and

Amazon is moving to broaden its services portfolio, and the scale of the health care business is one of the company's greatest opportunities to address, the Techonomy founder and CEO said.

Amazon, Berkshire Hathaway and JPMorgan Chase & Co. are creating a new company focused on technology solutions to deliver "simplified, high-quality and transparent health care at a reasonable cost", they said in a statement before the market opened Tuesday.

Morningstar analysts said the move is "an intriguing partnership that opens up Amazon to a more serious push into other health care products and services" rather than "directly entering the market through an acquisition". "But the industry is ripe for disruption, and this group of companies has the money and intelligence to succeed".

Some suggested it would be an iteration of self-insurance, which wouldn't be a surprise, since 70 percent of New Jersey's insurance coverage is self-funded. "They take the time to get to know who their customers are".

And now the wellness credits are gone, and we've got "private exchanges" and "defined contribution" benefits.

Amazon, Berkshire Hathaway, and JP Morgan Chase have more than 1.1 million employees worldwide. It was not clear whether the ultimate intention is to move beyond the three companies. So I think what they are going to do is bring to bear that kind of expertise through technology to help their employees shop more smartly for health care. 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 health care law. They did not elaborate on their strategy, but said they are searching for a chief executive officer. "It's starting to pick up momentum now that the big corporations are catching on in the West and Northwest, and around the country, that have been doing direct contracting".

More news: Alexis Sanchez: Jose Mourinho expects crowds to target Man Utd forward
More news: Las Vegans should have decent shot at seeing lunar eclipse
More news: Ikea's founder has died, age 91

Berkshire's Buffett has criticized high cost healthcare for years. And at the federal level, it's a driver of USA debt. "We're always supportive of disruptive innovation, and health care certainly is in need of it".

The three CEOs will oversee a nonprofit company tasked with finding a "fresh approach " to health care.

The decision to bring together Dimon, Bezos and Buffett is "brilliant", especially for Amazon - already one of the "most brilliant companies in the world", Kirkpatrick said during a guest spot on "Bloomberg Daybreak: Americas". I mean, that's actually possible for them to do.

Health insurers that provide benefit management or health plans to Amazon, JPMorgan and Berkshire could be among the hardest hit. "We haven't really seen the other side of the equation".

Warren Buffet, chief executive of Berkshire Hathaway, said the ballooning costs of healthcare now act as a "hungry tapeworm" on the American economy. The group we have made does not come with immediate solutions to these problems but we believe that by using our resources collectively and using them with the country's talent could control the rise in the health cost in time while increasing patient satisfaction. But we also do not accept it as inevitable.

It also stressed that the goal of the initiative is to improve health care "for all of our US employees", while reducing costs.

Amazon CEO Jeff Bezos chimed in saying "Success is going to require talented experts, a beginner's mind, and a long-term orientation".

Other reports by MaliBehiribAe

Discuss This Article