Here’s what happened. Warren Buffett, Jeff Bezos and Jamie Dimon announced that they’d like to fix healthcare. The three industry titans said they’re going to try to fix healthcare for their own employees, but JP Morgan CEO Dimon’s broader ambition was evident in his statement: “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.” (emphasis ours). Bezos’s statement was less outwardly ambitious, but probably more scary to the status quo: “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,” Bezos said.
Why scary? Well Bezos used to have just a pretty cool online bookstore. Now look at Amazon — a digital retail juggernaut that eats anything in its path, not to mention also being top dog in cloud computing. Bezos started out selling books and ended up besting IBM. When Bezos aims at a business sector, he doesn’t want to put a Band-Aid where it hurts, he wants to perform radical invasive life-changing surgery on it. That’s what healthcare no doubt needs. But past bloviators who claimed to want to fix it didn’t have the pedigree and know-how of this group. The announcement that Buffett, Bezos and Dimon launched the initiative — forget about that they’re a long way from solutions — immediately knocked points off healthcare and insurance stocks like Anthem, Aetna and Cigna. The big three even took a bite out of CVS’s and Walgreen’s prices. Scariest part for the status quo? The new initiative will be “free from profit-making incentives and constraints.” After the big three shock wears off though, Aetna and the like can probably take it: they’re profits were up 75.5% last quarter.
