Amazon, JPMorgan and Berkshire Hathaway just assembled to save U.S. healthcare

Amazon, JPMorgan and Berkshire Hathaway said Tuesday they are banding together to create a healthcare company to provide employees access to care “free from profit-making incentives and constraints.”

The independent entity aims to “provide U.S. employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost.”

In a statement announcing the project, Warren Buffett, CEO of Berkshire Hathaway, described the skyrocketing cost of U.S. healthcare as a “hungry tapeworm on the American economy.”

The shock announcement sent the share price of companies like CVS, United Health and Aetna plummeting in early trading Tuesday.

How the new company will circumvent the broken healthcare market is unclear, though it said it will look to technology solutions.

"Our group does not come to this problem with answers,” Buffet said. “But we also do not accept it as inevitable. Rather, we share the belief that putting our collective resources behind the country's best talent can, in time, check the rise in health costs while concurrently enhancing patient satisfaction and outcomes.”

Each of the three giants will put up one of their executives to lead the new company. Berkshire’s investment officer Todd Combs and JPMorgan’s Marvelle Sullivan Berchtold will join and Beth Galetti, a senior vice president at Amazon, to lead the new venture.

“The healthcare system is complex, and we enter into this challenge open-eyed about the degree of difficulty," Amazon CEO Jeff Bezos said in the statement.

The companies are hoping their sheer size will help find a solution to lowering healthcare costs.

"The three of our companies have extraordinary resources, and our goal is to create solutions that benefit our U.S. employees, their families and, potentially, all Americans," JP Morgan CEO Jamie Dimon said.

Cover image: Jeff Bezos, chief executive officer of Amazon, arrives for the third day of the annual Allen & Company Sun Valley Conference, July 13, 2017 in Sun Valley, Idaho. (Drew Angerer/Getty Images)