Tuesday, January 30, 2018

Something to Know - 30 January

Due to the fact that auditing a college course "Political Journalism" requires a heavy dose of reading (8 books), and some writing, I have not been passing on any information lately.   However, my wife alerted me to this subject this morning, and with good reason, it is worth passing on.  The cost of health care is largely driven by the middle layers of bureaucracy, each taking a slice of the pie, for no real good reason.   In this story, some benevolent corporate CEOs are stepping up to form a non-profit medical insurance company to replace an obscene structure of greed.   Can you imagine if more corporations join Warren Buffet and his friends in creating a voice that can negotiate the cost of pharmaceuticals as well?   This concept is new, and will drive needed changes in this business.

Amazon, JPMorgan, Berkshire creating new healthcare company

Amazon, JPMorgan, Berkshire creating new healthcare company
Berkshire Hathaway Chairman and CEO Warren Buffett is interviewed in 2016. (John Peterson / Associated Press)

Amazon is diving into healthcare, teaming up with Warren Buffett's Berkshire Hathaway and the New York bank JPMorgan Chase to create a company that helps their U.S. employees find quality care "at a reasonable cost."

The business giants offered few details Tuesday and said that the project is in the early planning stage."The ballooning costs of [healthcare] act as a hungry tapeworm on the American economy," Buffett said in a prepared statement. "Our group does not come to this problem with answers. 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."

The new company will be independent and "free from profit-making incentives and constraints." The businesses said the new venture's initial focus would be on technology.

The companies did not say whether the project would expand beyond Amazon, Berkshire or JP Morgan. However, JPMorgan Chase Chairman and Chief Executive Jamie Dimon said, "our goal is to create solutions that benefit our U.S. employees, their families and, potentially, all Americans."

Shares in healthcare companies took a big hit in early trading Tuesday, suggesting the threat of the new entity to how healthcare is paid for and delivered in the broader economy.

Any solutions the company devises would find a huge and receptive audience. With about 151 million non-elderly people, employer-sponsored coverage is the largest part of the U.S. health insurance market.

Companies get a tax break for offering health benefits to their workers, and many employers also see them as a crucial tool for attracting and keeping workers. But costs are soaring and healthcare consumes a growing chunk of their budgets. Small businesses have been under particular strain.

Only 50% of companies with three to 49 employees offered coverage last year, according to the nonprofit Kaiser Family Foundation. That's down from 66% more than a decade ago. The federal Affordable Care Act requires all companies with 50 or more full-time employees to offer it.

Patriotism is not a short and frenzied outburst of emotion but the tranquil and steady dedication of a lifetime.
- Adlai Stevenson

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