Amazon Inc. (AMZN) is back to its old disruptive ways.
The company announced that it is partnering with Warren Buffett's Berkshire Hathaway (BRK.A) and JPMorgan Chase & Co. (JPM) 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) was down 3.75%, Humana Inc. (HUM) fell 4.6%, Aetna Inc. (AET) declined 3%, CVS Health Corp. (CVS) fell 4% and UnitedHealth Group Inc. (UNH) dropped 5%. The Health Care Select Sector ETF (XLV) 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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