The three business giants unveiled the plan on Tuesday with few details other than to say the focus of the venture is on “improving employee satisfaction and reducing costs” for each company’s U.S. employees. By CNBC’s estimate, Amazon, Berkshire Hathaway and JPMorgan Chase have more than 1.1 million domestic employees.
“The healthcare system is complex, and we enter into this challenge open-eyed about the degree of difficulty,” said Jeff Bezos, Amazon founder and CEO. “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.”
Amazon’s participation in the venture is yet another example of Bezos’ outsized ambition to leverage the enormous clout of the e-commerce giant well beyond the retail sector of the economy. Last year, Amazon expanded into the brick-and-mortar supermarket business with its purchase of Whole Foods. Amazon in the past few years has poured billions of dollars into building up its Amazon Prime streaming platform and Amazon Studios film and TV production unit. The company is in the midst of a search for a new leader for Amazon Studios, a recruiting process that has been closely watched in Hollywood.
The partners in the health care effort emphasized that the unnamed venture is still in the early planning stages. Berkshire Hathaway investment officer Todd Combs is spearheading the launch with Marvelle Sullivan Berchtold, a managing director of JPMorgan Chase, and Beth Galetti, a senior VP at Amazon.
The three CEOs made clear in announcing the plan that they view the U.S. health care system as deeply flawed in ways that are a danger to the national interest. The goal is to leverage the considerable resources of the three private companies into a drive for technology-driven innovations at a company that will be “free from profit-making incentives and constraints,” according to the news release.
“The ballooning costs of healthcare act as a hungry tapeworm on the American economy. Our group does not come to this problem with answers. But we also do not accept it as inevitable,” said Berkshire Hathaway chairman-CEO Warren Buffett. “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 comes at a time of turmoil in the health care biz as the Trump administration’s efforts to repeal Obama-era health care reforms have stalled but federal funding and other support for existing Obamacare programs are still in jeopardy. The venture is a clear signal that business leaders are fed up with the partisan gridlock on health care policy. Although the new company will focus on initiatives to benefit the employees of the partners, there’s no doubt the goal is to develop innovations that can have a wider application beyond the halls of the three companies.
“Our people want transparency, knowledge and control when it comes to managing their healthcare,” said Jamie Dimon, chairman-CEO of JPMorgan Chase. “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.”
(Pictured: Jeff Bezos and Warren Buffett)