Corporate giants take action to cut healthcare costs

by Bradley Adams

Public Relations Manager

Amazon, Berkshire Hathaway, and JPMorgan Chase & Co. announced on Jan. 30 a partnership to cut healthcare costs and improve services for their US employees. The first goal of these companies is to target technology solutions to simplify the healthcare system.

The US healthcare system is one of the government’s most pressing and demanding issues and there have been many attempts to cut healthcare costs. Large companies thinking they can fix the system isn’t a new idea. Previous companies such as Macy’s and American Express have joined the Health Transformation Alliance, an organization striving to try and fix the healthcare system by lowering costs, but has proven unsuccessful so far.

In a statement to Time magazine, Jamie Dimon, JP Morgan Chase & Co. chairman, said, “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.” The companies are hoping that with their sheer size they have an ability to make a cut in costs for citizens.

CVS is also trying to help by lowering provider costs by adding walk-in medical clinics at more of its physical locations. As of now, the company has more than 1,100 MinuteClinics and 9,800 physical locations. CVS is attempting to leverage its physical locations with a proposed 69 billion dollar acquisition of health insurer Aetna. Its goal is to create a health system that integrates pharmacy and health benefits while delivering preventative care services through its retail clinics.

Ever since the announcement, JP Morgan Chase & Co, and Berkshire Hathaway’s shares went down, while Amazon’s went up. In addition, competing companies such as Express Scripts and Aetna sank 3 percent, while CVS and UnitedHealth fell 4 percent.

“The healthcare system is complex, and we enter into this challenge open-eyed about the degree of difficulty,” said Amazon CEO Jeff Bezos in the official press release. “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.” Unfortunately, as of now, the companies have yet to explain how they will cut costs and help those in need.

(Sources: CNBC, Time, and Forbes)

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