Jeff Bezos, Warren Buffett, and Jamie Dimon have decided to start a health care company. At this point, nobody has any idea what it will actually do.
That didn’t stop investors from dumping shares of pharmacies like CVS and insurers like UnitedHealthcare this morning after Amazon, JPMorgan, and Buffett’s Berkshire Hathaway announced that they were teaming up to create an independent company aimed at bringing down their own employees’ healthcare expenses. The mere specter of a future where everybody is buying prescription drugs on Amazon with a Bezoscare card was apparently enough to scare Wall Street.
“The ballooning costs of healthcare act as a hungry tapeworm on the American economy,” Buffett said in a press release. “Our group does not come to this problem with answers. But we also do not accept it as inevitable.” As you might expect from that statement, venture’s exact goals are vague. For now, it will apparently focus on coming up with “technology solutions” aimed a making health care cheaper and simpler for U.S. employees at Amazon, Berkshire, and JPMorgan (which together have 1.2 million workers worldwide). The company will also be “free from profit-making incentives and constraints.”
Right now, this sounds less like an attempt to conquer an industry, and more like a very large lab in which to test out healthcare savings ideas. It’s possible the new company will find a successful formula it can sell to other companies (at which point, it might not be so free from those profit-making incentives). But as of now, all we’ve really seen is a boiler-plate statement about ambitions. The investor jitters might be a bit premature.
Still, there are reasons to think that this team-up could be a big deal, eventually. It’s long been rumored that Amazon was considering getting into the prescription drug business, possibly by starting an online pharmacy. Instead, it’s forming a corporate supergroup—like the Traveling Wilburys, but with more spreadsheets—with America’s biggest bank and Berkshire, which has a massive and very profitable insurance division (its holdings include Geico). Buffett’s company also edged into the world of health insurance in 2016, when it founded a division offering medical stop-loss coverage—which self-insured companies use to cope with unexpectedly large claims from their employees.
So even if this is just an experiment at this stage, it’s still combining the talents of the world’s most sophisticated retail, logistics, and shipping company, a conglomerate specializing in insurance, and a gigantic financial institution with a long-running interest in the health care space. It seems like something interesting ought to come out of that. Maybe that something will revolutionize health care delivery and coverage in the U.S. Or maybe it’ll be the “Segway of health insurance,” as one skeptical health wonk joked. Either way, it’ll be interesting to watch.
Support our journalism
Help us continue covering the news and issues important to you—and get ad-free podcasts and bonus segments, members-only content, and other great benefits.Join Slate Plus