The three corporate giants has announced that they would partner to cut US healthcare costs for hundreds of thousands of their employees.
The alliance is a sign of how frustrated American businesses are with the state of the nation’s health care system and the rapidly spiraling cost of medical treatment.
The new, not-for-profit venture will initially focus on technology for “simplified, high-quality and transparent healthcare” for their more than 500 000 U.S. employees, the companies said. They did not elaborate on their strategy, but said they are searching for a chief executive officer, reports Reuters.
Healthcare industry experts say the new entity could eventually negotiate directly with drugmakers, doctors and hospitals and use their vast databases to get a better handle on the costs of those services. That could undercut the industry’s “middlemen,” from health insurers to pharmacies and benefits managers.
“The ballooning costs of healthcare act as a hungry tapeworm on the American economy,” said Berkshire Hathaway Chairman and CEO Buffett. “Our group does not come to this problem with answers. But we also do not accept it as inevitable.”
U.S. healthcare spending has been increasing annually faster than inflation, and in 2017 accounted for 18 percent of the economy. Corporations sponsor health benefits for more than 160 million Americans.
Share their strategies
The three CEOs plan for their companies to be the only clients of the joint venture, however, they intend to share the strategies and technology they ultimately develop to reduce costs for the economy and the government, reports Reuters.
Investors in the sector expect Amazon will become a major disruptor of healthcare, just as it has done in the retail industry, fueled by media reports in recent months that the company was considering entering the pharmacy business. Teaming up with JPMorgan and Berkshire offers new opportunities to shake up the industry, reports Reuters.