Amazon.com, Berkshire Hathaway and JPMorgan Chase are forming an independent company, “free from profit-making incentives and constraints” to “provide U.S. employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost.” They say they’ll be “tackling the enormous challenges of healthcare and harnessing its full benefits.”
While the initial focus will be on technology, and the efforts will initially be aimed only at employees of the three firms, one suspects that the ambitions are slightly bigger: building a business that can somehow tamp down the pressures that drive health-care costs ever upward. In remaking the market for health-care services, they might even divert some small fraction of that gross national spending into their own pockets.
Most large companies self-insure. They generally pay outside firms to administer their health insurance for them, but they are financially responsible for the claims. A large employer is a little statistical universe, with unusually healthy employees balancing out the bills for the unusually sick ones. The large companies do have some experience managing health insurance.
Amazon totally outclasses the existing healthcare insurance companies in terms of IT technology.