Ama­zon, Buf­fett and JPMor­gan join forces on health care

Ripon Bulletin - - Nation/Dollars & Sense -

NEW YORK (AP) — Three of cor­po­rate Amer­ica’s heav­i­est hit­ters — Ama­zon, War­ren Buf­fett and JPMor­gan Chase — sent a shud­der through the health in­dus­try Tues­day when they an­nounced plans to jointly cre­ate a com­pany to pro­vide their em­ploy­ees with high­qual­ity, af­ford­able care.

The an­nounce­ment was short on de­tails about pre­cisely what the in­de­pen­dent com­pany will do. But given the three play­ers’ out­size in­flu­ence — and Ama­zon’s abil­ity to trans­form just about ev­ery­thing it touches — the al­liance has the po­ten­tial to shake up how Amer­i­cans shop for health care, and the stocks of in­surance com­pa­nies, drug dis­trib­u­tors and oth­ers slumped in re­ac­tion.

“One of the mes­sages they are send­ing is they’ve given up on tra­di­tional ways in which em­ploy­ers have tried to re­duce costs or man­age costs bet­ter,” said Paul Fron­stin, an econ­o­mist with the non­profit Em­ployee Ben­e­fits Re­search In­sti­tute.

Ben­e­fits ex­perts spec­u­lated that this new com­pany could cre­ate a vir­tual mar­ket­place that makes shop­ping for health care as easy as buy­ing a shirt on Ama­zon. Or it could move di­rectly into buy­ing pre­scrip­tion drugs. Or it could be a sys­tem that by­passes in­surance com­pa­nies al­to­gether and con­tracts di­rectly with doc­tors and hos­pi­tals for bet­ter deals.

Em­ploy­ers are up for try­ing al­most any­thing to con­trol ris­ing health care costs, which have been con­sum­ing big­ger por­tions of their bud­gets for years and bur­den­ing their em­ploy­ees.

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