It’s easy to make the joke about Amazon Prime Co-pays, but news that Amazon is pushing into Healthcare with JP Morgan and Berkshire Hathaway is, as Joe Biden would say a “Big Fucking Deal.”
“The ballooning costs of [healthcare] act like a hungry tapeworm on the American economy,” Buffett said in a statement. “Our group does not come to this problem with answers. But we also do not accept it as inevitable. Rather, we share the belief that putting our collective resources behind the country’s best talent can, in time, check the rise in health costs while concurrently enhancing patient satisfaction and outcomes.”
With the Trump administration’s purposeful undermining of the Affordable Care Act, the free market responded.
Tossing on my MBA hat, this partnership and their push for affordable healthcare makes sense for a few key reasons:
- Amazon has best-in-class infrastructure and supply chain knowledge. Berkshire Hathaway is invested in insurance and reinsurance companies – GEICO, Gen Re, NRG, Berkshire Hathaway Assurance, et cetera. JP Morgan is, well, JP Morgan. If anyone can put this together, it’s a ruthless businessman, a ruthless, calculated investor, and wall street slime.
- If the stated goal is to curb the rise in healthcare costs, you could not do better than Bezos and Buffet in a cost-containment capacity.
- Companies get a huge tax break for offering health insurance benefits to their workers. In fact, through 2014, employer-provided health care benefits will keep the U.S. Treasury from getting its hands on $659 billion. Amazon, Berkshire Hathaway, and JP Morgan have over a million employees between them – that’s a hefty break.
- Jeff Bezos, Warren Buffet, and Jamie Dimon are not stupid when it comes to data-driven investing or basic economics. Healthcare spending in 2016 totaled $3.3 trillion dollars, accounting for 18% of the nation’s GDP. It rose 4.3% YoY.