Amazon made its long anticipated move into health, joining forces with two other US corporate giants to form an independent healthcare company that will be “free from profit making incentives”.
The new company, a venture with Berkshire Hathaway and JPMorgan Chase, will initially focus technology to provide the trio’s employees and their family members with “simplified, high-quality and transparent healthcare at a reasonable cost”.
The hope is the companies’ combined, which covers finance, e-commerce and insurance, will enable them to take a novel approach to the challenge of rising healthcare costs in the US.
Berkshire Hathaway’s chief executive officer Warren Buffet said: “The ballooning costs of healthcare act as a hungry tapeworm on the American economy.
“We share the belief that putting our collective resources behind the country’s best talent can check the rise in health costs while concurrently enhancing patients satisfaction and outcomes.”
The new company is still in the planning stages. But once fully launched will be jointly led by Todd Combs, an investment officer of Berkshire Hathaway, Marvelle Sillivan Berchtold, a managing director at JPMorgan Chase, and Beth Galetti, a senior vice president at Amazon.
Jeff Bezos, founder and chief executive officer of Amazon, said: “The healthcare system is complex, and we enter into this challenge open-eyed about the degree of difficulty.”
There’s no doubt that healthcare costs in the US have skyrocketed in recent years and as a direct result employee health insurance has also reached new heights.
According to Kaiser Family Foundation, a health policy research group, the cost of a premium for a single person in the US rose 4% in 2017 to $6,690 (€5,376.15) and is up around 50% over the past decade.
“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,” Bezos added.
The e-commerce giant’s move into healthcare had been widely trailed over the last year. Although it arrived a bit short on detail, news of the plans was enough to see shares in existing health insurance providers plummet. UnitedHealth, the biggest health insurer in the US, saw its stock fall 7.1% and its recently acquired health services unit Optum was also down 5%.