Amazon, Berkshire Hathaway, JPMorgan create a health insurance company.....

[Plainview]

In the beginning it'll only be for the employees and families of those three companies. They hope to expand it to the rest of the US. It's not a for-profit business which should keep premiums very low. I need to read more about it. What I've read thus far I like.

Health insurance companies were hit in the stock market and I'm happy. They're dirty. They're all dirty. Health care should never be a for profit business. People's health issues should not be a source for people to make billions.

https://finance.yahoo.com/news/amaz...aper-healthcare-staff-123250565--finance.html

Amazon.com Inc, Berkshire Hathaway and JPMorgan Chase & Co will form a healthcare company aimed at cutting costs for their U.S. employees, they said on Tuesday, sending shares in the broad healthcare sector sharply lower.

The independent company will be "free from profit-making incentives and constraints," they said. It will initially focus on technology to provide "simplified, high-quality and transparent healthcare" at a "reasonable" cost for its more than 500,000 employees in the United States, they said.

Investors in the healthcare sector have been nervous about technology giant Amazon becoming a competitor and eating away at profits, just as it has done in the retail sector.

Amazon has been looking at the pharmacy business and pharmacy distribution, according to numerous media reports and Wall Street analysts.

With Amazon teaming up with JPMorgan, a leading financial company, and Berkshire, the third largest public company in the world, the behemoth online retailer could broaden the scope of its efforts to affect U.S. health insurers.

The announcement knocked about $19 billion off UnitedHealth Group Inc's market capitalization in premarket trading.

U.S. healthcare spending increases each year faster than inflation, and in 2017, accounted for 18 percent of the U.S. economy.

Corporations, which sponsor healthcare plans for more than 160 million Americans, and the U.S. government are trying to cut costs.

"Investors have continually asked what unexpected development might spoil the strong investor sentiment towards managed care. Unfortunately, this seems tailor-made to fit the bill," BMO Capital Markets analyst Matt Borsch said in a research note.

Shares in health insurers UnitedHealth, Anthem Inc and Cigna Corp all fell 5 percent premarket.

Drugstore operators CVS Health Corp and Walgreen Boots Alliance as well as pharmacy benefits manager Express Scripts Holding Co dropped between 5 percent to 7 percent.

Drug distributors Cardinal Health and McKesson were down more than 4 percent.

The plan, currently in the early stages, will be spearheaded by Berkshire investment officer Todd Combs, JPMorgan managing director Marvelle Berchtold and Amazon senior vice president Beth Galetti.

"The ballooning costs of healthcare act as a hungry tapeworm on the American economy," said Berkshire Hathaway Chairman and Chief Executive Officer Warren Buffett. "Our group does not come to this problem with answers. But we also do not accept it as inevitable."​

 

[Garp]

I'm not smart enough to know if this will work, but I hope it does. And I hope it crushes all other insurance or forces them to adapt.

 

[hrudey]

I for one welcome O'BezosCare.

 

[sharkboy1200]

Sounds cool, hope it's good for people in the future.

 

[Intellivision]

We'll see how this shakes out, but I wouldn't celebrate yet.

Amazon, Berky and JP Morgan are all for profit companies. They aren't selling you stuff to breakeven. And no non-profit company is going to do that either. Non-profit companies make profit just like any other company. The only difference is how the earnings are distributed, so you aren't going to see the CEO of this new company making $100 million in stocks or options.

 

[hrudey]

We'll see how this shakes out, but I wouldn't celebrate yet.

Amazon, Berky and JP Morgan are all for profit companies. They aren't selling you stuff to breakeven. And no non-profit company is going to do that either. Non-profit companies make profit just like any other company. The only difference is how the earnings are distributed, so you aren't going to see the CEO of this new company making $100 million in stocks or options.

They're doing it to reduce the cost of healthcare for *their* employees, which necessarily that the savings are going to their bottom line. And that's fine. Basically, they're taking what a lot of companies can already do with self-funded plans and going a step beyond by administering the thing themselves too.

The thing that will be interesting is how they decide what is going to be covered and whether they'll adjust their offerings or benefits based on state mandates, since even a self-funded plan falls under ERISA and is therefore exempt from pretty much all state mandates. I'm curious to see how they'd end up negotiating arrangements with medical providers, since while they have a lot of clout, they're not going to have the population that a United Healthcare might for example, and they're most likely not going to be in the business of purchasing hospitals and surgery centers to provide the care on that front.

What I do think they can definitely pull off is to get the actual administration of their plans in place to be much more efficient, since they're going to only be supporting the range of plans they directly offer, so it'll be easier to automate further with less errors on the claim processing side. I am confident that they'll be able to do the administration far more cheaply than what they'd be paying the third party insurer to administer their plan, so if they can come up with a solution to the contracts with the medical providers, this will be huge for them. If they can combine that with an in-house basic medical office for their larger facilities (maybe things like urgent care / routine care / primary care) to reduce further the amount of money they have to expend externally, it could be a real winner.