With growing concerns about the healthcare costs plaguing employees, Amazon, Berkshire Hathaway and JP Morgan Chase are forming a new company to address these concerns. Though in the early stages of development, investors reacted negatively to the news. Stock prices fell for health insurers and healthcare providers significantly. 6 out of the 10 companies on the S&P 500 are healthcare providers and the news dislocated their position on that table.
Despite the lack of information on this new venture, it is reported that the health initiative will be an independent entity, free from profit incentives and limitations. The company will focus on all the employees of Amazon, Berkshire Hathaway and JP Morgan Chase in the US, an estimated 1 million. However, analysts are claiming that Amazon and JP Morgan employees should already have great health coverage. Perhaps one that is better than any other industry in the US. If this is true then questions will be asked; such as why would an employee risk a great healthcare package for an experiment? Will this venture be more cost effective? Or even will this new initiative affect employees at other companies positively or negatively?
Moreover, the companies’ expertise in the healthcare sector is questionable. Would you trust healthcare coverage from a retail company, an insurance company or even a bank over companies that have been in the healthcare business for decades?
It is nothing new for large companies to fund their own health insurance but will they take over the responsibilities of the administrative duties or will they hire a third party on contract to take care of those responsibilities? Will this be an avenue for them to test new models of payment and care delivery?
With the high cost of healthcare in the US, employees are in dire need of a better solution as employers have increased deductibles and expenses. Leaving them with less money to spend. We patiently await the details of this venture and how it will improve the lives of employees.
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