New Amazon venture aims to lower health care costs
January 30, 2018
Amazon.com, Berkshire Hathaway and JPMorgan Chase & Co said in a statement on Tuesday that they plan to create an independent firm "free from profit-making incentives and constraints." It will initially focus on technological solutions to provide employees and their families with health care "at a reasonable cost."
"The ballooning costs of health care act as a hungry tapeworm on the American economy," said Berkshire Hathaway Chairman and CEO, Warren Buffett. "Our group does not come to this problem with answers. But we also do not accept it as inevitable."
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"Hard as it might be, reducing health care'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," Jeff Bezos (pictured above), Amazon founder and CEO, said.
The American health care system faces an uncertain future after President Donald Trump's attempts to dismantle the comprehensive Obamacare health reforms, by introducing more expensive private insurance policies for many and ending public provision for others.
"The three of our companies have extraordinary resources, and our goal is to create solutions that benefit our US employees, their families and, potentially, all Americans," he added.
Amazon spreads its wings
The move comes amid growing speculation that Amazon is likely to enter the prescription drug business and that has sent tremors through the pharmaceutical supply chain. Amazon has been rumored to be hiring over 100 people for its new London insurance department aimed at the UK, Germany, France, Spain and Italy. Some believe the move is a first step in a plan to secure large parts of the worldwide €4 trillion insurance industry.
Drugstore operators CVS Health Corp and Walgreen Boots Alliance as well as pharmacy benefits manager Express Scripts Holding fell between 4.5 percent to 6 percent in premarket trading on Tuesday. Health insurers also fell, with UnitedHealth's 6.2 percent drop the steepest.
Berkshire Hathaway controls businesses in areas includes insurance, utilities, freight rail transportation, finance, manufacturing, retailing and services. JPMorgan Chase is a global financial services firm with assets of $2.5 trillion and operations worldwide.
jbh/tr (Reuters, AP)