The company announced that it is partnering with Warren Buffett's Berkshire Hathaway (BRK.A) - Get BRK.A Report and JPMorgan Chase & Co. (JPM) - Get JPMorgan Chase & Co. (JPM) Report to create a company to address the healthcare needs of their U.S. employees.
Healthcare providers across the board were tanking Tuesday shortly after the opening bell.
Anthem Inc. (ANTM) - Get Anthem, Inc. Report was down 3.75%, Humana Inc. (HUM) - Get Humana Inc. (HUM) Report fell 4.6%, Aetna Inc. (AET) declined 3%, CVS Health Corp. (CVS) - Get CVS Health Corporation Report fell 4% and UnitedHealth Group Inc. (UNH) - Get UnitedHealth Group Incorporated Report dropped 5%. The Health Care Select Sector ETF (XLV) - Get Health Care Select Sector SPDR Fund Report dropped 2%.
The consortium announced Tuesday that the new independent company would be "free from profit-making incentives and constraints," meaning it will not have to turn a profit to be considered successful.
"The initial focus of the new company will be on technology solutions that will provide U.S. employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost," a statement from the companies said.
There are few companies with deeper pockets than Amazon, Berkshire Hathaway and JPMorgan, so the fact that they are willing to lose money on this venture doesn't bode well for competitors who do have to worry about their bottom lines.
"The healthcare system is complex, and we enter into this challenge open-eyed about the degree of difficulty," said Jeff Bezos, Amazon's founder and CEO. "Hard as it might be, reducing healthcare's burden on the economy while improving outcomes for employees and their families would be worth the effort. Success is going to require talented experts, a beginner's mind, and a long-term orientation."
The companies said the effort is still in its early planning stages and that information concerning a long-term management team, headquarters location and other operational details will be forthcoming.
Shares of Amazon were down 1.43% in morning trading, while Berkshire fell 0.03% and JPMorgan fell 0.1%.
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