“A hungry tapeworm on the American economy,” Berkshire Hathaway Chairman and CEO, Warren Buffett, believes this is what health care costs are today. Thus, with a goal to create a new company that will provide high-quality healthcare at lower costs for US employees, Buffet teams up with CEOs of Amazon and JP Morgan Chase.
The new healthcare company aims to offer services at low costs; it will be “free from profit-making incentives and constraints”. The CEOs plan to boost health care satisfaction for the employees of Amazon, Berkshire Hathaway and JPMorgan Chase. They unveiled their new venture sometime in January.
“The initial focus of the new company will be on technology solutions that will provide U.S. employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost,” according to the companies.
The humongous enterprises thrive in multiple industries, from retail to banking, like Berkshire holding large companies such as Geico and Fruit of the Loom. Jeff Bezos and Jamie Dimon, on the other hand, are well-renowned leaders who have proven themselves great in what they do, especially solving complex business problems.
The three companies, when taken together, have more than 950,000 employees worldwide. Bezos, Buffet, and Dimon all admitted that they are aware of the challenges they’re facing when handling people.
“The health care system is complex, and we enter into this challenge open-eyed about the degree of difficulty,” Jeff Bezos, Amazon founder and CEO said. “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.”
White House economic adviser Gary Cohn responded to the announcement, and told CNBC “we agree in that philosophy. We think that individual workers should have to pay less for health care.”
When Cohn talked about the executive order last October, he said that the Trump Administration already “created association healthcare plans, which is the exact same thing that those companies did.” The order allows employers to combine options when offering insurance. It also lets groups to acquire coverage across the state lines. NPR’s Scott Horsley explained it’s, “a move that Republicans have long advocated as a way to lower costs.”
“Smaller businesses could pool their employees together to get more purchasing power,” Cohn added, “so they could save money on health care.”
NPR’s Scott Hensley mentioned in the Morning Edition that such events have happened before – non-health care companies set to join the healthcare business, “in fact, it has happened repeatedly.”
“One of the most prominent examples is what is now Kaiser Permanente, a big provider of health care in this country. It started with the Kaiser shipyards and providing, first, workers comp kind of care and, later, more integrated health care for employees,” Scott explains. “So it is possible.”
However, in-depth details about the new healthcare company haven’t yet been released. Important details such as, the name of the company, foundation of operations, and long term leaders were not disclosed in the news released in January.
For now, what’s clear is that the new healthcare company will be led by executives from the titan firms: managing director of JPMorgan Chase, Marvelle Sullivan Berchtold; investment officer of Berkshire Hathaway, Todd Combs; and senior vice president at Amazon, Beth Galetti.
“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,” JPMorgan’s Dimon said.
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