SEATTLE -- Amazon, Berkshire Hathaway and JPMorgan Chase said on Tuesday that they would form a health-care company aimed at lowering the cost of care for their U.S. employees and reducing costs to the companies.
The new entity, backed by the three U.S. corporate titans that collectively employ more than 1 million people globally, is described as a long-term venture "free from profit-making incentives and constraints." The initial focus, the companies said in a news release early Tuesday, would be on technology that provides employees with simplified health care at a reasonable cost.
Few details were available in an early-morning news release announcing the venture, which included statements from the leaders of each company.
"The healthcare system is complex, and we enter into this challenge open-eyed about the degree of difficulty," said Amazon founder and chief executive Jeff Bezos. "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."
Berkshire Hathaway CEO Warren Buffett called the rising costs of healthcare "a hungry tapeworm on the American economy."
"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 chief of the conglomerate said.
The new company's management team, headquarters and other details will be announced later, the companies said. The effort is being led initially by Berkshire Hathaway investment officer Todd Combs, JPMorgan Managing Director Marvelle Sullivan Berchtold, and Amazon human-resources chief Beth Galetti.
Investors scrambled on Tuesday to assess the impact of the new venture on existing U.S. health care providers, some of whom had been wary of Amazon's long-rumored move into the health care market.
Shares of UnitedHealth Group fell 6.7 percent in pre-market trading. CVS and Anthem were both recently down 5.3 percent, and Aetna slipped 4 percent.
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