Amazon, Berkshire Hathaway and JPMorgan Chase & Co. announced they are partnering on ways to address health care for their U.S. employees, with the aim of improving employee satisfaction and reducing costs.
The three companies will pursue this objective through an independent company that is free from profit-making incentives and constraints. The initial focus of the new company will be on technology solutions that will provide U.S. employees and their families with simplified, high-quality and transparent health care at a reasonable cost.
“Our people want transparency, knowledge and control when it comes to managing their health care,” says Jamie Dimon, chairman and CEO of JPMorgan Chase. “The three of our companies have extraordinary resources, and our goal is to create solutions that benefit our U.S. employees, their families and, potentially, all Americans.”
The effort is in its early planning stages, with the initial formation of the company jointly spearheaded by Todd Combs, an investment officer of Berkshire Hathaway; Marvelle Sullivan Berchtold, a managing director of JPMorgan Chase; and Beth Galetti, a senior vice president at Amazon. The longer-term management team, headquarters location and key operational details will be communicated in due course.
John Greenbaum, national employee benefits practice leader at Risk Strategies Company, says the news is unsurprising to him. “For some time now, employers of all sizes have been struggling on behalf of their employees to deal with a system completely out of alignment with their needs. Costs rise, even as covered services fall, affecting wage growth, worker well-being and business productivity,” he says. “Employers are fed up with the misalignment and are actively looking to change how they sponsor employee health coverage.”
Greenbaum says his firm has seen a strong and growing trend of employers willing to pursue alternative methods for providing effective health and prescription drug coverage benefits to their employees—direct contracting, bundled payments, direct primary care, reference-based pricing, utilization of on-site clinics, improved pharmacy benefit arrangements, and more.
The National Business Group on Health (NBGH) also finds employers are pursuing ways to support changes in how health care is paid for and delivered to drive more effective, efficient and affordable care. Bundled payments with centers of excellence are becoming more prevalent and risk-based arrangements with high value networks and Accountable Care Organizations (ACOs) and self-insured health benefit plan models in which employers directly contract with medical providers, are on the rise in select markets.