According to the news report by Bloomberg, the big boss of JP Morgan Chase & Co., Jamie Dimon is finally opening up about the healthcare venture that is going to be a three way partnership between his company, Amazon.com Inc. and Berkshire Hathaway.
In January, the three companies had made a joint announcement that they were forming a venture which would use technology to make healthcare more affordable for their employees. This venture could also be potentially open to other companies and customers as a second step in its development. However, since then none of the three companies have provided and details about the venture.
In his annual letter to the bank’s shareholders, Chief Executive Officer of JP Morgan, Jamie Dimon revealed some of his plans for this new venture. Dimon told his shareholders in the letter that they would be updating all investors about the project over a period of years, which implied that this was going to be a long-term project.
Dimon stated that they planned to start this project on a very small-scale, but that there was much to be done. He also said that they partners would be hiring a strong management team to solve some of the critical problems as well as issues that they were going to face in making this project a reality.
According to the annual letter, some of the goals that Dimon hoped to achieve through this partnership with Amazon and Berkshire were aligning incentives between the doctors, patients as well as insurers, reducing instances of fraud and waste and resolving the issue of why so much money was being spend on end-of-life care.
To achieve this goal, the new venture would be using virtual technology, massive amounts of data, the best possible management team, stronger customer engagement as well as a better set of options for customer choices. After the letter, Dimon gave an interview to Yahoo Finance, during which stated that the venture still does not have a CEO and operations haven’t yet commenced.
So far, Dimon is the first of the three leaders to officially chalk out what is expected from the envisioned healthcare venture. Warren Buffet, the Chairman of Berkshire Hathaway, did not refer to the healthcare venture at all in his annual letter to his shareholders in February this year.
The most information that Buffet has given so far about this joint venture was during his interview with CNBC in February. During that interview, Buffet stated that one major goal he wanted to achieve from this healthcare venture was to stop the health care industry from eating away a large portion of the economy of the US. He also stated that he was hoping to find a way to deliver lower cost health care to their customers as well as employees.
Buffet, like Dimon, was careful to say that this kind of a project would take time. In fact, he stated that it wasn’t something easy that they were planning. Had it been easy, it would already have been done. So, people shouldn’t expect miracles out of the joint venture any time soon.
Jeff Bezos, the Chief Executive Officer as well as founder of Amazon.com Inc. typically publishes his annual letter to his stakeholders in April. Thus people are waiting to see whether Bezos would have more details about the healthcare venture in his letter due to be out this month. So far, however, the announcement made by Amazon on January 30 was brief and did not contain any details about this partnership.
After this letter, the S&P Health Index went up by 0.4%.