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New kids on the health block
On Tuesday, Amazon, Berkshire Hathaway and JPMorgan Chase announced plans to create an independent, not-for-profit healthcare company to reduce employer healthcare costs for their combined 1+ million employees globally.

Why are they doing this?
Healthcare in the U.S. is an incredibly complex and convoluted system – and the political charge around it has made lasting reforms challenging. Healthcare is a huge expense for employers: healthcare expenditures per capita in the U.S. are double that of comparable countries. These three companies believe they can do it better themselves. Some think the Bezos + Buffett + Dimon CEO trio will be able to disrupt health care – others think they’re out of their element on this one.



The skeptics argue that companies have been chewing on this problem for decades and not solved it. They point out that 1 million employees is not actually a meaningful pool of patients and so this consortium will not have market power. 

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The believers point to the economic power of these companies – and the star power of their CEOs – to suggest that this initiative is bound to lead to real change. Waste in the system (e.g., insurance companies’ profits) could be eliminated and, if technology solutions can incentive patients to make smart, efficient healthcare decisions, the believers think this partnership could really bring down healthcare costs.


So will it work?
It’s too early to know. This initial announcement didn’t include any real detail on how the consortium would operate. Will they limit patient choice? Will they ration care? Will tech solutions drive efficiency in the delivery of care? Either way, Wall Street was spooked - the market value of 10 of the largest healthcare companies dropped by an aggregate of $30 billion after the news broke!

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Amazon is coming!

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