Jeff Bezos, Jamie Dimon and Warren Buffet Take Aim at Health Care
Amazon CEO Jeff Bezos recently announced that the company would be partnering with Jamie Dimon’s JP Morgan Chase and Warren Buffet’s Berkshire Hathaway to address a hot-button issue in America: health care.
The three companies have revealed an unnamed company that will give their U.S. workers and families better health insurance options. What will set their company apart? It will be “free from profit-making incentives and constraints.”
photo Will O’Neill via Flickr
Combined, the three companies have 840,000 global employees.
The current goal of the company is to provide an insurance product to their own employees and employee family members. There are no plans – as of yet – to offer insurance to other companies.
“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,” Buffet said.
While experts agree that the three companies have the resources to disrupt the industry, health care is a notoriously difficult industry to change.
The cost of health insurance has been steadily rising over the last few decades. In 2017, the average annual premium for a single worker hit $6,700. Family coverage hit $18,800. These costs are split between the employer and the employee.
In 2017, premiums increased by 4% for individual plans and 3% for family coverage.
Employers had been footing most of the bill for employee health insurance, but costs are slowly shifting to employees. Last year, families paid about $5,700 for their premiums. Solo coverage cost an employee about $1,200.
Premiums aren’t the only cost to consider in the equation. Deductibles have also increased to an average of $1,500 in 2017. In 2006, the average deductible was $584. Insurance companies have also trimmed their coverage, with some scrapping coverage for home care, medical supplies and more.
photo Andrew Aliferis via Flickr
For now, Bezos, Buffet and Dimon will focus on their own employees, but experts agree that they will likely expand their services if all goes well.
The company’s efforts are still in the early stages. Each has already named a member to work on the effort, but they have yet to decide on operational details, a location for their headquarters or a long-term management team.
“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,” Dimon said.
Shares of major health insurance companies, like Anthem, UnitedHealth, Cigna and Aetna, fell on news of the company. Shares of CVS, Walgreens and hospital operator Humana were also lower on the news.
Buffet has compared the U.S. healthcare system to a “tapeworm” and says the biggest issue is that the industry is not “cost-conscious.” Buffet says the industry should provide “better care in reality and also in terms of how the people feel about the care that they’re receiving.”
The Berkshire CEO also confirmed that his company’s $377 million stake in Teva Pharmaceutical was not related to the new health care venture.
The trio of CEOs aren’t the only ones taking aim at health care. Apple recently announced that it is preparing to expand into the health care industry for its employees. The company will launch health clinics for its workers, called AC Wellness. The clinics are expected to open this spring.
Author: Jacob Maslow
