It was only a matter of time until Amazon tried their hand at one of, if not the most, complicated industries on the planet.
And now it’s happening: Jeff Bezos is teaming up with a real nerd herd of corporate kings in Berkshire Hathaway and JPMorgan to launch an independent healthcare company, aimed at providing cheaper coverage to their nearly 1m collective US employees.
The move is already a major headache for traditional US healthcare providers (within the first 2 hours of the announcement, the market value of 10 large health insurance and pharmacy stocks dropped by a combined $30B).
Just beggin’ to be disrupted
With the rise of corporate healthcare costs, the industry has been askin’ for a shake-up over the last few years.
The total cost of healthcare per worker for employers has risen nearly 3% this year (its 6th consecutive year of small upticks), in return pushing up the costs for what employees have to pay out of pocket.
Problem is, healthcare costs have risen faster than wages and inflation. That means premiums for employer-provided insurance plans have shot up 19%, while employee pay has increased only 12%.
Now the bigwigs are stepping in
Warren Buffett called the rapid rise in healthcare costs a “hungry tapeworm on the American economy,” while Bezos explained fixing the healthcare industry will require “talented experts” and a “beginner’s mind.”
Sure, cutting healthcare costs for their employees means cutting costs for themselves, so it’s not all pure intentions from Bezos and the gang.
But, when 3 of titans of corporate America make a move like this, people listen — and if Bezos and co’s personal cost-cutting interests happen to benefit 950k people between the 3 companies worldwide, then good on them.
The million dollar question: can they do it?
There are (justifiably so) a ton of skeptics. Their actual plan to carry out this daunting task remains endlessly vague, leaving many people wondering what the h*ll any of this actually means.
Will Amazon hospitals soon be a thing? Are we going to start picking up medicine at Whole Foods? Is Jeff Bezos a nicer Lex Luthor? Stay tuned.