Amazon, Berkshire Hathaway, and J.P. Morgan Chase are forming a not-for-profit health care venture to lower health care costs for their US employees, the companies announced Tuesday morning, sparking a slide in the shares of a host of health care-related companies. Only recently have doctors and insurers even been able to talk the same language through a massive federally financed move toward electronic medical records.
Only 50 percent of companies with three to 49 employees offered coverage past year, according to the nonprofit Kaiser Family Foundation. "It will take a substantial amount of research first, and it will take some substantial amount of resources probably in many geographies to have the kind of impact [Amazon, Berkshire Hathaway an JPMorgan Chase] are saying they'll like to have", he said. She said the drive for transparency, "which is lacking now in drug pricing and also in broader healthcare delivery in America, would point to a more transformative effort by the new entity". Lower the cost of research? The group has grown to nearly 40 members. It also stated that the undertaking would be a "long-term effort". Intel, notes American Benefits Council president James Klein, has been a leader in direct contracting with healthcare providers. Our group does not come to this problem with answers.
"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 collaboration will likely pressure profits for middlemen in the healthcare supply chain.
Indeed, the announcement sends a message that the trio of companies has given up on the traditional ways in which employers have tried to reduce costs or manage costs better, Paul Fronstin, an economist with the non-profit Employee Benefits Research Institute, told The Associated Press.
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For their part, pharmacy-benefits managers have said they save employers billions and that their clients have the ability to do audits to confirm they are getting all the promised drug discounts.
This move could turn the healthcare system upside down. "The three of our companies have extraordinary resources, and our goal is to create solutions that benefit our USA employees, their families and, potentially, all Americans".
Amazon's entry into healthcare has been rumored for a long time. The organization advises around 12,000 organizations that buy health plans for millions of employees.
It is interesting to note that one of the largest US reinsurance companies, Gen Re, is at the core of Berkshire Hathaway's empire. When these three threaten to disrupt an industry, those in it had better listen carefully and adapt as quickly as they can. "We look forward to hearing more about this new initiative and how we can work together to improve health care for everyone".
Within hours of the announcement, which hit Wall Street at 7am on Tuesday, billions of dollars were wiped from the value of the USA healthcare industry's largest companies, an indication, observers said, of the threat to these businesses such a joint venture was seen to represent. The news was enough to rattle investors in established health insurers and trigger a sell-off in their stocks. These three companies are certainly well positioned to make an important contribution.
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