Amazon, JPMorgan Chase, and Berkshire Hathaway announced on Jan. 30 that they will be collaborating to create a healthcare company for their employees in the United States.
The announcement came with no concrete details about how the plan will take effect, according to The New York Times. The alliance between the three huge companies — an electronic commerce company, Warren Buffet’s conglomerate holding company, and the largest bank in the world — seems to be attempting to combat the rising cost of healthcare for large-company employees. ABC News reported that the three companies have a total of approximately 1 million employees nationally.
“The ballooning costs of health care act as a hungry tapeworm on the American economy,” Buffett said in Tuesday’s statement, Bloomberg reported. “Our group does not come to this problem with answers. But we also do not accept it as inevitable.”
According to CNNMoney, the announcement had an astounding effect on healthcare shares in the stock market. Shares of health insurers such as UnitedHealth, Anthem, Aetna, and Cigna were sharply lower after, as well as shares drugstore retailers CVS and Walgreens. Shares of Amazon also went up 8 percent. JPMorgan Chase and Berkshire Hathaway remained unchanged.
Amazon is prepared to invest $5 billion to build and employ HQ2, hiring up to 50,000 new employees. This will add 50,000 new users to the new proposed healthcare plan. Philadelphia was named a finalist in Amazon's recent list of top 20 cities in which to build its new headquarters. Two of the three proposed Philadelphia locations, as well, are just a few blocks from Penn's campus.
JPMorgan and Chase is also a prevalent company for students at Penn. JPMorgan Chase is the second-most popular choice for jobs and internships for Wharton students, second to Boston Consulting Group.
In terms of Penn’s own healthcare system within its hospital, the University recently announced its merge with Princeton University's healthcare system, which will result in an additional $7 billion in annual revenue for Penn. According to Penn’s Human Resources website, Penn offers its employees extensive healthcare benefits, providing four comprehensive options for each individual and their families.
In an interview for the Huffington Post, Penn President Amy Gutmann recognized Philadelphia as fertile ground for tech companies, also mentioning Penn’s healthcare system.
“Philadelphia has so much to offer for any innovative company – top talent, ideas and creativity from our universities, partnerships with global companies, one of the best health care systems in the world...,” Gutmann said.
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