Amazon is teaming up with Berkshire Hathaway and JPMorgan Chase to form a new healthcare company (PDF) that will aim to service the US and be “free from profit-making incentives and constraints.”
Berkshire Hathaway chairman and CEO, Warren Buffett described the company-in-the-making’s mission as follows:
The ballooning costs of healthcare act as a hungry tapeworm on the American economy. Our group does not come to this problem with answers. But we also do not accept it as inevitable. Rather, 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.
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That could be huge for the healthcare industry in the US, where services can be extremely expensive for patients, while hospitals are reportedly struggling to make bank. Quartz noted that the market value of 10 major publicly listed health insurance and pharmacy stocks fell by a combined $30 billion in the first two hours of trading yesterday as a result of the announcement from Bezos et al.
Amazon has been rumored to be interested in entering the healthcare space in the past: following its $13.7 billion acquisition of grocery chain Whole Foods, it was reported to be eyeing pharmacy firms CVS and Walgreens as its next targets – but nothing seems to have panned out since.
The three firms didn’t go into detail about their plans for the new company, but noted that it’ll focus on “technology solutions that will provide US employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost.” It’ll be interesting to see what comes of it in the coming months and years.