The new development is likely to have a significant impact upon the way that U.S. healthcare is organized. As a sign of the anticipated level of disruption, PharmaPhorum reports that the announcement adversely impacted on share price of some of the biggest health insurance and pharmacy companies. An estimated $30 billion was lost from the combined value of the ten biggest companies on January 30, 2018.
State of health insurance
There was a double blow for the pharmaceutical sector following a piece in Donald Trump’s State of the Union address. Here the U.S. president restated his ambition to seek firmer controls over the price of prescription medicines in the U.S., a move seemingly out of kilter with the Republican Party’s free market agenda.
Healthcare spending in the U.S. is big business. Healthcare spending totaled $3.3 trillion in 2016 (the latest available figures), which was 4.3 percent higher than the previous year, The Guardian unveils.
A non-profit solution to healthcare woes?
With the Amazon-Berkshire Hathaway-JP Morgan partnership, the three companies have stated they are seeking to improve customer satisfaction and lower the costs related to healthcare for their employees. Taken together, this is a large number of people, some 950,000 workers. This is an indication that the trio are unhappy with the services and costs offered by established healthcare providers.
The three groups aim to establish an independent non-profit company. This will be a technology driven company, setting out to give employees (together with their employees), what Forbes quotes as a “simplified, high-quality and transparent healthcare at a reasonable cost.”
Warren Buffet has not mixed his words over his concerns with conventional insurance schemes, stating: “The ballooning costs of healthcare act as a hungry tapeworm on the American economy. Our group does not come to this problem with answers. But we also do not accept it as inevitable.”
He adds further: “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.”
The scheme remains in its early stages. The longer-term plans, together with the management team, headquarters location and key operational details will all be decided within the next few months. If it works the model could see other major corporations set-up internal services for their employees, laying down a challenge to sector specific businesses.
