Health Stocks Drop After Amazon, Berkshire Hathaway And JPMorgan Chase Announcement
KELLY MCEVERS, HOST:
Three corporate giants are teaming up to try to improve the health care system and make it more affordable. Amazon, JPMorgan Chase and Warren Buffett's Berkshire Hathaway say they will create a separate company to provide health care to their employees in the U.S. After this announcement, the share prices of some of the biggest health insurance and pharmaceutical companies dropped. With me to talk about all this is NPR health policy correspondent Alison Kodjak. Hi there.
ALISON KODJAK, BYLINE: Hey, Kelly.
MCEVERS: OK, so this big announcement comes out early this morning, and it sets off all this speculation across the health care industry. What does the announcement actually say?
KODJAK: Well, it doesn't say that much actually. It was less than a page long, and there are only about three short paragraphs of information along with three prepared quotes from the company's leaders. And basically what it says is that they're going to pool their resources, meaning their brains, their money and their employees, to make health care more efficient and more pleasant and cheaper for their employees.
But - and as you mentioned, it says they're going to create a whole new company and, very importantly, one that is not aimed at making a profit. And the last little bit is it mentions technology solutions will be an early focus, but it doesn't say what particular problems those solutions are going to solve.
MCEVERS: Well, what could they be? What could those technology solutions be?
KODJAK: Well, again, they're not offering specifics. But with Amazon in the picture, it's clear there's a retail, customer service expertise out there. And I talked to someone who's familiar with the plan. He says one idea that the companies are thinking about is creating this sort of dashboard for their workers to deal with their health care.
So it could be like an Amazon shopping interface kind of thing where they can look up doctors and get reviews and quality information. They could possibly make appointments, find out who's available today. They - rather than having to wait weeks for appointment, they maybe could book tests or find out the price for tests and book it immediately online.
MCEVERS: So this obviously, as we said, created a lot of excitement today, a lot of anxiety. Do these companies have the ability to really change things in the health care industry?
KODJAK: Well, that's a big question. You know, health care costs have been a huge problem for companies and for individuals for a long time. The Kaiser Family Foundation pointed out today that while wages have risen about 64 percent since 1999, health insurance premiums have gone up more than 224 percent, which is a huge gap.
KODJAK: Warren Buffett - you know, he in his quote said this is a, quote, "hungry tapeworm." And so that's the problem they're trying to tackle. They're giving us so little information, though, about what they plan to do that it's hard to judge whether they can succeed. There are experts who are saying, you know, never underestimate Amazon; they can do almost everything. And then there are those who say, we've tried this before. And it's that first group, I would say, that - they've been watching Jeff Bezos, who created this giant Amazon corporation. And it started with just books, and now we know it's, you know, really turned the retail industry upside down.
MCEVERS: What are the other experts saying?
KODJAK: Well, the - yeah, those are the ones who've said we've seen it all before. There are lots of companies that have tried to figure out new ways to cut health care costs. There are coalitions of corporations. There are research groups. You know, the companies have created self-insurance to do this, but most of them end up going through health insurance companies. So the Amazon factor is a really big part of this. If they decide they can really get rid of the middleman, the insurance company, one Duke health care economist said that would be a big game changer.
MCEVERS: So at this point, we've just got this announcement. I mean, when do you think we'll know more?
KODJAK: Well, that's a big question. The people I spoke to today said they released the information early to avoid speculation and leaks and that kind of thing. One big question that will be - that will give us a clue is when they decide who is going to run this new company. I don't know exactly when they're going to make that decision, but when they do, that choice is going to reveal a little bit about where the venture is focused - if it comes from Amazon or if it comes from outside.
MCEVERS: NPR's Alison Kodjak, thanks a lot.
KODJAK: Thank you, Kelly. Transcript provided by NPR, Copyright NPR.