Business Wire, January 30, 2018
SEATTLE & OMAHA, Neb. & NEW YORK–(BUSINESS WIRE)–Amazon (NASDAQ: AMZN), Berkshire Hathaway (NYSE: BRK.A, BRK.B) and JPMorgan Chase & Co. (NYSE: JPM) announced today that they are partnering on ways to address healthcare for their U.S. employees, with the aim of improving employee satisfaction and reducing costs. The three companies, which bring their scale and complementary expertise to this long-term effort, will pursue this objective through an independent company that is free from profit-making incentives and constraints. The initial focus of the new company will be on technology solutions that will provide U.S. employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost.
Tackling the enormous challenges of healthcare and harnessing its full benefits are among the greatest issues facing society today. By bringing together three of the world’s leading organizations into this new and innovative construct, the group hopes to draw on its combined capabilities and resources to take a fresh approach to these critical matters.
“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,” said Berkshire Hathaway Chairman and CEO, Warren Buffett.
“The healthcare system is complex, and we enter into this challenge open-eyed about the degree of difficulty,” said Jeff Bezos, Amazon founder and CEO. “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.”
“Our people want transparency, knowledge and control when it comes to managing their healthcare,” said Jamie Dimon, Chairman and CEO of JPMorgan Chase. “The three of our companies have extraordinary resources, and our goal is to create solutions that benefit our U.S. employees, their families and, potentially, all Americans,” he added.
The effort announced today is in its early planning stages, with the initial formation of the company jointly spearheaded by Todd Combs, an investment officer of Berkshire Hathaway; Marvelle Sullivan Berchtold, a Managing Director of JPMorgan Chase; and Beth Galetti, a Senior Vice President at Amazon. The longer-term management team, headquarters location and key operational details will be communicated in due course.
By Don McCanne, M.D.
The headline in this morning’s online edition of The New York Times: “Amazon, Berkshire Hathaway and JPMorgan Team Up to Disrupt Health Care.” Disruption? Above is reproduced the actual full statement from Business Wire (A Berkshire Hathaway Company). So what is their message?
For decades the business community has struggled with trying to provide health benefits for their employees, but costs have continued to rise well in excess of inflation in spite of policies put in place to slow the growth in costs – policies that have displeased employees such as high deductibles and other cost sharing and narrow provider networks that limit choice in health care, not to mention passing some of the premium increases on to the employees.
In this communication, Warren Buffett, Jeff Bezos and Jamie Dimon acknowledge the need to ensure employee satisfaction and the need to control health care costs. They have now decided to join forces to use their brilliance and expertise to finally solve this problem for the benefit of their own employees. As successful businessmen they have decided that the best approach would be to establish a not-for-profit independent company looking for solutions in technology that will “provide U.S. employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost.”
Warren Buffett says, “Our group does not come to this problem with answers.”
Jeff Bezos says, “The healthcare system is complex, and we enter into this challenge open-eyed about the degree of difficulty… Success is going to require talented experts, a beginner’s mind…”
Jamie Dimon says, “Our people want transparency, knowledge and control when it comes to managing their healthcare.”
The release states, “The longer-term management team, headquarters location and key operational details will be communicated in due course.”
So they do not have a plan, but they plan to have a plan.
They intend to start with talented experts, but they appear to be looking in the technology world when they need to turn to the health policy arena since mere technological gimmicks are not going to have a significant impact on the problems that concern them.
The obvious caveat when they turn to the policy community is that they have to sort out those who propose policies proven to be capable of achieving their goals from those who propose policies based predominantly on anti-government, pro-market ideology. We already have the latter, and it is what has brought us to our knees. Several other nations have the former which has provided them with comprehensive care for everyone at an average of half of what we spend per capita on health care.
Warren Buffett already knows this. He recently said, “With my limited knowledge, I think that (single payer) probably is the best system. We are such a rich country. In a sense, we can afford to do it.”
An independent health benefit company serving their employees, even if including the employees of a large conglomeration of other companies, could not adapt most of the beneficial features of a well designed single payer model. Most of the policy defects that result in the dysfunction of our health care financing would remain in place. As smart businessmen, the last thing they should want is to invest considerable effort and resources into a venture that proves pretty much for naught.
Rather than setting up yet another technology-based company wouldn’t it be better to begin with a group of experts who understand the health needs of patients and the community at large and the public policies that would deliver on those needs? But leave out those who place markets first such as the insurers, pharmaceutical executives, for-profit corporate executives and the like.
Maybe Buffett, Bezos and Dimon should simply arrange a visit with us at Physicians for a National Health Program. Not only are we physicians, we are also policy people who support policy for the people, not for the rent seekers.
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