What’s particularly interesting about the alliance of Amazon.com (NASDAQ:AMZN), JP Morgan Chase (NYSE:JPM) and Berkshire Hathaway (NYSE:BRK.A, NYSE:BRK.B) is its relationship to business basics.
Despite various efforts, the healthcare costs in the U.S. continue to grow. According to the CMS, the spending is forecasted to go from $3.5 trillion in 2017 to $5.7 trillion in 2026. There are many reasons for this: fraud, waste, complex regulations, special interests, just to name a few.
Yet the fact is that many businesses are feeling the pressures. For the most part, the growth trends somehow need to be muted. At the same time, there needs to be more of a focus on quality outcomes.
The Amazon, JPM Berkshire group pools together a workforce of over 1.2 million. And yes, these companies have some of the world’s best business leaders: Jeff Bezos, Jamie Dimon and Warren Buffett. They have all had transformative impacts on society.
Basically, it seems like a pretty good bet that they should be able to come up with a compelling strategy.
What We Know So Far
Now the alliance is still kind of fuzzy. There isn’t even a name for it!
Rather, just like a Jeff Bezos operation, the focus is on finding top-notch talent. Just this week, there was the announcement of Jack Stoddard as the COO. He has more than 20 years in the health-technology industry, serving as executives of companies like Accolate, Optum, Health Dialog, and The Advisory Board.
According to his LinkedIn profile, Stoddard has been “applying technology, data, science, people, and design thinking to improve the healthcare consumer experience, elevate clinical quality and lower the total cost of care.”
Before this there was another critical hire for the CEO spot. This went to Atul Gawande, a general and endocrine surgeon at Brigham and Women’s Hospital in Boston. He is also the author of various books on medicine.
It’s true that Gawande seems like an odd choice, as he does not have much operational experience. But then again, when it comes to taking on the complexities of the healthcare industry, there really needs to be a new approach.
Here’s what Jeff Bezos had to say in the announcement for Gawande:
“We said at the outset that the degree of difficulty is high and success is going to require an expert’s knowledge, a beginner’s mind, and a long-term orientation. Atul embodies all three, and we’re starting strong as we move forward in this challenging and worthwhile endeavor.”
Next Steps
In the annual report for JP Morgan, Jamie Dimon provided some more details on the alliance. They include high-level goals like finding ways to provide better incentives to lower costs, looking at understanding the tough issues and coming up with ways for healthcare consumers to make better choices and evaluating.
And of course, there will be a big focus will be on leveraging technologies like AI (Artificial Intelligence), mobile and cloud computing.
In other words, much of the attention will be on researching the issues and finding solutions. According to Dimon: “The effort will start very small, but there is much to do, and we are optimistic.”
So do not expect quick results. The healthcare industry is just too massive and complex. However, Jeff Bezos, Jamie Dimon and Warren Buffett seem to be on the right track and they certainly have the resources to make a big difference.
Tom Taulli is the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.
