Amazon just took a surprising turn into the healthcare industry, teaming up with investing hero Warren Buffet and New York-based bank JPMorgan Chase, the Washington Post reports. The project is still in the planning stages, so there isn't yet a lot of info on what form it will take. The idea, however, is to reduce costs while improving patient care with the aid of technology. "The ballooning costs of (health care) act as a hungry tapeworm on the American economy," Berkshire Hathaway founder Warren Buffet said in a statement.
The new health company will be independent of its founding firms and "free from profit-making incentives and constraints," it said. It will be led by executives from all three firms, with much of its focus on employer-granted health benefits, it seems. "Our goal is to create solutions that benefit our US employees, their families and, potentially, all Americans," said JPMorgan Chase CEO Jamie Dimon.
There were some clues that Amazon was dabbling in healthcare. CNBC reported last summer that a secret "1492 squad" at Amazon was posting jobs related to the use of medical records, had invested in cancer startup Grail, and hired a healthcare and life sciences director away from Box. Amazon CEO Jeff Bezos also noted recently that Alexa and Echo devices could be used by both health providers and patients.
The healthcare system is complex, and we enter into this challenge open-eyed about the degree of difficulty. 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. Success is going to require talented experts, a beginner's mind, and a long-term orientation.
Despite not having a single-payer system, US healthcare costs are the highest in the world, making it prohibitively expensive American consumers and companies alike. As the Post notes, only 50 percent of US firms with up to 49 employees offer coverage, down 66 percent from a decade ago. The Affordable Care Act requires all companies larger than that to offer it.
The news is certainly an eye-opener, and many investors, insurance companies, politicians and others will no doubt watch intently to see how the new company takes shape. Jeff Bezos, for his part, seems to have a realistic view of what it can accomplish, though.
"The healthcare system is complex, and we enter into this challenge open-eyed about the degree of difficulty," he said in a statement. "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. Success is going to require talented experts, a beginner's mind, and a long-term orientation."