Amazon, Berkshire, and JPMorgan Shake up the Healthcare Market

13 Mar Amazon, Berkshire, and JPMorgan Shake up the Healthcare Market

In what some are considering a bold and new move, Amazon.com, JPMorgan Chase & Co., and Berkshire Hathaway Inc. have announced that they plan to tackle the rise of health care premiums by entering the health market themselves with a new company. It is a plan that some are considering brave while others consider hopeless.

Their goal is to try and disrupt the healthcare market by eating the initial costs of insuring people through offering low plans with high benefits. This would will starve the other health market companies and force them to become competitive.

How Will They Change the Market?

How precisely these three companies are going to do it is still a mystery as they have only released a 400-word press release and state that the process is still in its “early stages of development.”

“Amazon may spur new technology innovations [and] can increase the efficiency of healthcare delivery.” reported Idris Adjerid, an IT professor at the University of Notre Dame’s Mendoza College of Business.”

Though the initial shockwave of the announcement caused many healthcare companies’ stocks to plummet, not everyone believes this is realistic or possible.

Though these significant players could cause a ripple throughout the medical world, it is hard to ascertain if they have the economic backing to maintain such low costs without risking their new company’s stability. Healthcare costs have been on the rise for years, and the question is whether they could stay in the market long enough to cause a lasting impact.

Rising Costs

They are not the first to make such announcements, and prices continue to climb. The U.S. healthcare market has been fighting rising costs for years and even the introduction of the Affordable Healthcare Act did not have the effect they wanted.

One thing that the entire idea has in its favor is that one of the most renowned investors, Warren Buffet has backed the project. But also one of the largest banking firms in the United States is putting its capital behind the plan. It is one of the more powerful partnerships seen in modern American corporate history.

Jeff Bezos, Amazons founder and chief executive said, “The health care system is complex, and we enter into this challenge open-eyed about the degree of difficulty. Hard as it might be, reducing health care’s burden on the economy while improving outcomes for employees and their families would be worth the effort.”

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