Amazon is sneaking into the healthcare industry to partner with Warren Buffett’s Berkshire Hathaway and New York’s JP Morgan to create a company that helps US workers find “at a reasonable cost” Quality medical services and solve the “hungry American tapeworm” problem.
On Tuesday, the business giant provided some details and said the project is in its early stages of planning. But it has become a shame that the stock shifted to Medicare and pharmacy chains from the Amazon, which has long been concerned with the huge health markets in the United States.
Buffett said in a statement: “The [inflation] cost of [healthcare] is like that of the starved tapeworm in the U.S. economy.” Our team did not answer that question. But we also do not accept that this is inevitable. Instead, we believe that placing our collective resources under the nation’s best talent allows us to promptly examine the rise in healthcare costs while increasing patient satisfaction and outcomes. ”
With more than a million employees across these three companies, if the plan is successful, it can provide a model for new entrants to a rapidly consolidating market in recent years.
Shares of United Health, the nation’s largest health-insurer, fell 5%. Its rival Aetna fell 3%, despite announcing quarterly profit up 75%.
Amazon, Berkshire and JPMorgan Chase said the new company initially focused on technology but did not provide details. In a statement, the trio said the new entity will be independent with “no incentive and restraint for profits,” but they did not say how much they would invest or if they plan to expand beyond their own employees.
Any solution the company designs will find a huge receptive audience. The U.S. health insurance market covers about 151 million non-elderly people and employer-sponsored programs make up the largest part of the United States.
According to data from the U.S. Medicare and Medicaid Service Center, total healthcare spending in 2016 reached 3.3 trillion U.S. dollars, accounting for 18% of GDP and 4.3% more than in the previous year.
Buffett has been a persistent critic of the cost of health care in the United States, and last year he said the threat to businesses is greater than the corporate tax rate.
Companies get tax cuts by providing health benefits to their employees, which many employers also see as key tools for attracting and retaining employees. However, costs are rising and health care consumes more and more of the budget. Small businesses are under special pressure.
According to the not-for-profit Kaiser Family Foundation, only 50% of three to 49 employees provided insurance coverage last year. This is even lower than the 66% ten years ago. The federal Affordable Care Act requires all companies with 50 or more full-time employees to provide it.