Amazon.com Inc. (NASDAQ:AMZN), Berkshire Hathaway Inc (NYSE:BRK) and JPMorgan Chase & Co (NYSE:JPM) are joining forces to start a separate company that provides healthcare to US employees and their families.
The three companies said they aim to improve employee satisfaction and reduce the costs of healthcare through the independent entity, which will be "free from profit-making incentives and constraints”.
To start, the healthcare company will focus on technology solutions and will be led by: Todd Combs, an investment officer at Berkshire Hathaway; Marvelle Sullivan Berchtold, a managing director at JPMorgan Chase; and Beth Galetti, a senior vice president at Amazon.
Berkshire Hathaway boss Warren Buffett said combining resources with Amazon and JPMorgan mean they can attract the country’s best talent, check the rise in health costs and enhance patient satisfaction and outcomes.
“The ballooning costs of healthcare act as a hungry tapeworm on the American economy,” he said.
“Our group does not come to this problem with answers. But we also do not accept it as inevitable”.
Reducing healthcare's burden on US economy worth the effort, says Bezos
Amazon founder and chief executive Jeff Bezos admitted there would be a degree of difficulty in the new venture, given the complexity of the healthcare system.
"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," he said.
JPMorgan chairman and chief executive Jamie Dimon said his employees want “transparency, knowledge and control” when it comes to managing their healthcare.
“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,” he said.
US healthcare stocks slide
US healthcare stocks fell on the news, including UnitedHealth Group Inc (NYSE:UNH), CVS Health Corp (NYSE:CVS) and Cardinal Health (NYSE:CAH).
Shares in Amazon, Berkshire and JPMorgan were little changed in pre-market trading.