Amazon is creating a health care company—with two big-name partners
Amazon is teaming up with two influential companies to try to improve a system that others have tried and failed to change over the years.
Amazon, Berkshire Hathaway and JPMorgan Chase will form an independent company, as yet unnamed, that will address health care for the U.S. employees of their respective companies with the aim of lowering costs and improving satisfaction — outside a focus on profit making and other constraints.
The initial focus of the new company will be tech solutions that can make quality, transparent health care accessible at a manageable cost, the three companies said. They noted that this new long-term venture would leverage the scale of each of them alongside their various specialties.
“The healthcare system is complex, and we enter into this challenge open-eyed about the degree of difficulty,” Amazon founder and CEO Jeff Bezos said. “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.”
The three companies bring significant financial and operational scale to healthcare. Berkshire Hathaway had $27.4 billion in comprehensive income for the full-year 2016, Amazon is projected to report earnings around $177.3 billion for its full-year 2017 on Thursday and JPMorgan Chase controls $2.5 trillion in assets. Amazon also brings to the table its Whole Foods Market retail footprint.
“The ballooning costs of health care act as a hungry tapeworm on the American economy,” Warren Buffett, CEO, Bershire Hathaway said in a statement. “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 effort currently is in the planning stages, and its initial formation will be helmed by Todd Combs, a Berkshire Hathaway investment officer; Marvelle Sullivan Berchtold, who is a managing director of JPMorgan Chase; and Beth Galetti, an Amazon senior VP.
“The three of our companies have extraordinary resources, and our goal is to create solutions that benefit our U.S. employees, their families and, potentially, all Americans,” JPMorgan Chase chairman and CEO Jamie Dimon said.