Shares in health care companies took a big hit in trading Tuesday following word that Amazon, Warren Buffett’s Berkshire Hathaway and the New York bank JP Morgan Chase are teaming up to create a health care company “free from profit-making incentives and constraints.”
UNL Economist Eric Thompson tells KLIN News that is not surprising. He points out that a similar decline occurred in grocery stores when Amazon entered that market.
Thompson says it’s common for the entry of Amazon or other tech leaders into new industries to create some pressure on incumbent providers.
Thompson says that Amazon has a reputation for innovation and disrupting traditional industries…and Thompson says it’s natural to expect that they may be able to do the same in health care.
Buffett calls the skyrocketing costs of health care the “hungry tapeworm on the American economy.”
Representatives of the companies say that while the venture initially targets the employees of their companies…they hope it will become a model for the country.