Stocks in US health companies are down sharply after Jeff Bezos and Warren Buffett announced they want to get into the healthcare business.
Frankly, we don't know who to root for in this one.
The Amazon boss said he would be teaming up with Berkshire Hathaway and JPMorgan Chase and Co to start an company focused on lowering the cost of health insurance in America.
The trio, who include the world's richest man and the number three on the list, were scant on the details about their new venture, but said reducing expenses for workers will be the focus. The announcement concedes the operation is "in its early planning stages" right now.
"The healthcare system is complex, and we enter into this challenge open-eyed about the degree of difficulty,” Bezos said.
"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.”
The news of the new venture comes as Amazon is soliciting 20 major US cities for the most appealing host plan for its new headquarters, asking for things like tax breaks and real estate discounts.
The new company will be run by a trio of execs from the three founding companies: Todd Combs of Berkshire Hathaway, Marvelle Sullivan Berchtold, managing director of JPMorgan Chase, and Amazon senior VP Beth Galetti.
"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," said Warren Buffett.
"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."
While the unnamed Bezos-Buffett health firm might not currently have much to offer in the way of actual plans, its impact is certainly being felt throughout the US healthcare world. At the time of writing, shares in United Health Group are down 3.82 per cent, Anthem is down five per cent, Wallgreens Boots is down 4.63 per cent, and mail order pharmacy Express Scripts is down 3.71 per cent. ®