Amazon, Berkshire Hathaway, JP Morgan Chase partnership seeks to revolutionize health care.
In an interview with CNBC, Berkshire Hathaway CEO Warren Buffett said that a joint venture with Amazon CEO Jeff Bezos and JP Morgan Chase CEO Jamie Dimon is aimed beyond just making small changes in health care costs.
“I love the idea of tackling what I regard as the major problem of our economy,” Buffett told CNBC.
At the end of January 2018, the CEOs announced the launch a new health care partnership in an effort to provide high-quality care while reducing costs, according to a press release issued by the companies.
The press release stated that the initial focus of the collaboration will be to provide technology solutions that offer employees streamlined, high-quality, and transparent care without profit-related constraints. The 3 organizations hope to pool their resources to take an innovative and disruptive approach to health care, according to the release.
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Buffett told CNBC that it would be easy to shave off a few percentages of health care spending; however, there is a bigger problem that must be addressed.
Compared with other industrialized countries, the United States is at a competitive disadvantage, Buffett told CNBC. He said that US health care costs are at approximately 18% of gross domestic product (GDP) with every indication of increasing, while other countries are around 11% of GDP.
Despite the hurdles this new company faces due to the complexity of the health care system, Buffet told CNBC that he is confident they have the right partners to take on the challenges with the help of a “top-notch CEO.”
On the day the partnership was announced, stocks for health care stakeholders, including insurers and pharmacy benefit managers, took a hit. Many innovative companies have tried to tackle the problems within the US health care system in the past, but not with such influential partners involved, according to the interview.
“The goal is to deliver better care in reality and also in terms of how people feel about the care they are receiving because that’s important too,” Buffet told CNBC. “And to find ways to take cost out of the system, while not impairing the quality of what people receive. And that’s enormously complicated.”
Buffett told CNBC that this partnership will not only be beneficial to the 3 companies, but will also serve as a model that other entities can emulate to stop the constant increase of health care costs.
If successful, this approach may change the future of health care.
“It would be very easy, I think, to go in and shave off 3 or 4% just by negotiating powers,” Buffett told CNBC. “We’re for something much bigger than that.”