What in the Sam Hell is going on in the US health care system and US health care stocks? Well, on Tuesday, January 30th three major powerhouse employers announced they have decided to join forces to create an independent non-profit healthcare company.
Amazon, Warren Buffett’s Berkshire Hathaway, and JPMorgan said they plan to form the new venture, which will be focused on building technology solutions that will provide “simplified, high-quality and transparent healthcare at a reasonable cost” to US-based employees and their families.
Based on how few details were in the release about what this company looks like, the stock market’s reaction looked quite dramatic. The announcement sent healthcare stocks plummeting on Tuesday morning, especially health insurers and members of the pharmaceutical supply chain. Talk about a ripple effect!
“The health care system is complex, and we enter into this challenge open-eyed about the degree of difficulty,” Amazon CEO Jeff Bezos said, the first time he’s addressed the company’s health care interests since news the online retail giant was making moves to potentially enter the sector bubbled up in 2017. “Hard as it might be, reducing healthcare’s burden on the economy while improving outcomes for employees and their families would be worth the effort. Success is going to require talented experts, a beginner’s mind, and a long-term orientation.”
Now before most Americans think this provides an alternative to their current employer healthcare of the government provided healthcare, a key focus of this announcement is that the venture will be geared toward employees of Amazon, JPMorgan & Warren Buffett’s Berkshire Hathaway, rather than health care consumers overall in the US, though JPMorgan CEO Jamie Dimon did say that potentially, all Americans could benefit.
This is a very interesting announcement, as some major China technology employers have already begun to disrupt the Chinese healthcare industry. Technology companies like Alibaba and Tencent have made health care a priority for years, and are using China as their laboratory. After testing online medical advice and drug tracking systems, they are now focused on a more advanced tool: artificial intelligence (AI).
The companies’ technological push is encouraged by the government. Beijing has said it wants to be a leader in A.I. by 2030 and pledged to take on the United States in the field. While officials have emphasized the use of artificial intelligence in areas like defense, automated stock trading platforms and self-driving cars, they have also aggressively promoted its use in health care.
This begs the question, will other large employers follow suit to create their own non-profit healthcare venture to combat the U.S. healthcare situation? We can’t wait to watch the dominoes fall and find out more!
Like the idea of complex algorithms trading for you? Check out this software.