This past Tuesday, three corporate giants — Amazon, Berkshire Hathaway and JP Morgan Chase — launched their joint venture to form an independent healthcare system for their US employees.
The announcement set off shockwaves in the healthcare industry as well as the financial market. Immediately after the press release stocks of insurance and healthcare companies plummeted, paving a path for the new conglomerate.
The decision by the three companies highlights their frustration with the current healthcare system. Congress has remained gridlocked over the issue for the past several years, and private companies have shouldered the brunt of rising healthcare costs. This new enterprise seeks to untangle the current healthcare system and simplify it in a way to relieve costs for their employees. Jeff Bezos, the founder of Amazon and key proponent of the undertaking, voiced his thoughts on the issue, speaking both to the inherent difficulties as well as the final results. “The health care system is complex, and we enter into this challenge open-eyed about the degree of difficulty. 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.
What the new plan would actually entail, however, remains unclear. The venture could entirely overhaul the new system, or only implement small changes that would improve the lives of its employees only minimally. Some experts on the subject believe the plan would be more encompassing in nature. “It could be big,” said Ed Kaplan, a health care negotiator for the Segal Group. “Those are three big players, and I think if they get into health care insurance or the health care coverage space, they are going to make a big impact.” Others remain unconvinced. “This is not news in terms of jumbo employers being frustrated with what they can get through the traditional system,” said Sam Glick, a consultant at Oliver Wyman in San Francisco. “The idea that they could have any sort of negotiation leverage with unit cost is a pretty far stretch.”
While the results of such an effort remain to be seen, the initiation of a new trend is becoming clear. Frustrated with the efforts of the government, companies are taking such matters into their own hands. As models for many companies across the world, the success of these three giants will be pivotal in determining the future of the nation’s growing healthcare crisis.
