Amazon, Berkshire, JP Morgan Establish Health Care Co.

“Alexa, can you lower my health care costs?” An announcement this week from three of the largest companies in the United States has the potential to shake up the health care industry for years to come. As CNBCPolitico, and numerous others first reported, Amazon, Berkshire Hathaway, and JP Morgan are joining forces to establish an independent health care company, the goal of which is to use technology solutions to lower their employees’ health care costs. “The health care system is complex, and we enter into this challenge open-eyed about the degree of difficulty,” Jeff Bezos, Amazon’s founder and CEO, said in a joint press release from the three companies. “Hard as it might be, reducing health care’s burden on the economy while improving outcomes for employees and their families would be worth the effort.”

As CNBCPolitico, and others have noted, telemedicine providers including American Well and Teladoc stand to benefit significantly from Amazon, Berkshire, and JP Morgan’s move into the health care space, given their longstanding emphasis on saving patients time and money. “Amazon wants to create health care coverage for its employees that starts with technology,” Roy Schoenberg, chief executive of American Well, said in an interview with CNBC. “Telemedicine fits that bill to the T.” Along similar lines, Politico notes that “telemedicine companies are already positioning themselves to pitch their technology to the three companies’ new health care entity as a way to reduce costs.”

Some experts have expressed doubts about the feasibility of the new venture, pointing to companies including Intel and Walmart that have had limited success in this field in the past. “It’s not news that jumbo employers are frustrated with escalating costs and lousy experiences in the health care system,” Oliver Wyman’s Sam Glick told Politico. Others, though, are optimistic, and note that there’s plenty of room for innovation. “The health care system is absolutely ripe for disruption,” Robert Wachter, chairman of the medicine department at the University of California, San Francisco, said in an interview with Politico. “Nobody’s figured out how to do it yet.”

Rumors of Amazon’s entry into the health care space have been circulating for months now; as we reported last July, the company’s top-secret health care lab, dubbed “1492,” was focused on projects including electronic health records and telemedicine. Amazon has also sought to encourage developers to lend their talents to developing new health-related skills for its signature Alexa device. Last year, for example, the company and Merck announced the Alexa Diabetes Challenge, with $125,000 to be awarded to the developer who creates the best “Alexa voice-enabled solution” for diabetes management.

Click here to read the CNBC article on the Amazon-Berkshire-JP Morgan health care venture.

Click here to read the Politico article on the Amazon-Berkshire-JP Morgan health care venture.

Click here to read the Amazon-Berkshire-JP Morgan press release on their health care venture.

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