Corporate financial giants Amazon, JP Morgan Chase and Berkshire Hathaway, led by billionaire Warren Buffet, are teaming up on the healthcare front.
In a news release Tuesday, the companies said their initial focus will be on technology solutions to provide high quality and transparent health care for their employees in the US.
"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," Buffett said.
Experts say the alliance has the potential to change how Americans shop for health care.
"This is definitely a reflection of the fact that health care costs much more in the United States, both the total, what you pay for your premium and each individual thing, how much you pay for Tylenol or Sovaldi, which is a treatment for Hepatitis C, or the piece of metal that goes in your hip. All those prices are much higher in the United States than they are elsewhere and so people outside the health care industry are saying, hey there's that much opportunity then maybe we can step in," said R. Adams of UCSF Center on Healthcare Value.
"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."
Adams explained, "Amazon may actually be able to do some of the health care. They may be able to negotiate for drug prices and deliver the drugs. They have gotten licenses to be a pharmacy in a variety of states and probably have been thinking this way for a very long time."
Announcement of the joint venture was short on details, but it was enough to give the health care industry cause for concern.
"The strongest reaction, the reason you're seeing those biggest insurers in the country, who have sort of carved up the country mostly, you're seeing the response in their stock prices is that there's a threat to them," said Adams. "There's a threat to the insurers that they might get replaced, if Amazon, especially, can be successful then someone might take their place."