Though there are still few details about the new healthcare venture between Amazon, Berkshire Hathaway and JPMorgan, the announcement apparently spooked some healthcare executives enough to call the bank about their concerns.
That includes at least two of the country’s five largest health insurers, according to The Wall Street Journal, which cited anonymous sources familiar with the matter. In response, JP Morgan CEO James Dimon personally spoke to some healthcare leaders to assure them that the venture will only serve the three companies’ employees and therefore not compete with them.
Still, the initial announcement does seem to suggest that venture could eventually expand to reach beyond just the people who work at Amazon, Berkshire Hathaway and JPMorgan. The firms said want to “to create solutions that benefit our U.S. employees, their families and, potentially, all Americans."
Health insurance stocks tanked last Tuesday when the three firms announced their new initiative, but quickly recovered. Part of what soothed initial fears is that a WSJ report last week indicated the companies scrapped plans to take over the administration of their employees’ pharmacy and health benefits, and will focus instead on lowering healthcare costs by leveraging data and technology.
During his quarterly call with investors, Cigna CEO David Cordani said the insurer sees the firms’ foray into healthcare as a sign that employers are pushing for greater value for their healthcare dollars. That’s good news for Cigna, he added, as it’s already committed to providing that value for employer clients.
“We see initiatives like this as presenting more opportunities than not,” Cordani said.
Overall, a JPMorgan spokesman told the WSJ, feedback from the healthcare industry has been “overwhelmingly positive.” In fact, some JPMorgan bankers are fielding calls from tech firms that are interested in the new venture’s potential for disruption.