A source close to one of the organizations said it will take time before concrete details emerge.
The formal announcement yesterday that Amazon is joining forces with Berkshire Hathaway and JP Morgan Chase to collaborate on a healthcare company did not quell years of speculation about the digital retail giant’s medical ambitions. Instead, it may have intensified it for months or years to come.
It was no mistake that yesterday's market-rocking press release contained few concrete details: A source close to one of the 3 principals told Healthcare Analytics News™ that healthcare company concept isn’t yet fully formed. As far as concrete details and timelines go, the press and the public must sit tight, the source said.
The source said the effort is in the exploratory phase. The trio has not set out to create an insurance company, which much of the early speculation suggested. After the announcement, stock prices for insurance giants like UnitedHealthcare, Aetna, and Humana all plummeted down a straight line, though they have since regained some lost ground.
The organizations are also not out to create a hospital company or a pharmaceutical retailer. The source said they have identified an industry marred by inefficiencies and gaps, and they want to solve them using their finances, scalability, and technology. Amazon, JP Morgan Chase, and Berkshire Hathaway combine to move trillions of dollars and product daily with limited losses, but the American healthcare system struggles to transfer a medical record or prescription down the street. The companies see plenty of ripe, low-hanging fruit waiting to be picked, the source said.
At the outset, Berkshire Hathaway and JP Morgan Chase will essentially serve as clients of a company spearheaded by Amazon, the source said.
The new company will likely share any potential care or payment innovations with the rest of healthcare, with some exceptions, the source also noted.
Amazon’s entry into healthcare has been rumored for a long time. Vague as the press release was, the source claimed that rumors would intensify and information would trickle out if the companies began their staff search prior to a formal announcement. Taking control of that speculation early on could give the 3 companies a better ability to gauge their new market.
The press release noted only that “the longer-term management team, headquarters location, and key operational details will be communicated in due course.” Only 1 wire service carried it: BusinessWire, itself a property of Berkshire Hathaway.