Three guys walk into a bar. They’re Warren Buffett, Amazon.com’s Jeff Bezos and JPMorgan Chase’s Jamie Dimon. They decide to transform the American health care system.
That’s probably not how these three men decided to form a new company to address health care costs for their U.S. employees, and possibly for many more Americans. The three companies, with a combined market cap of $1.62 trillion, did not provide details of how the collaboration between their CEOs came about. And while their announcement Tuesday didn’t include many specifics, based on their very different business backgrounds it’s possible to see what each might bring to the table.
Bezos, 54, runs one of the world’s biggest retail operations and by some measurement he’s now the wealthiest person on the planet. Amazon grew from a book retailer into one of the world’s most valuable companies in part because it’s extremely skilled in distributing products. It’s long been willing to lose money in order to offer customers lower prices than its competitors can bear — and in the process gain a loyal customer base. That’s what millions of Prime members love about it.
Amazon has never been consistent at turning profits because of its focus on sales growth. That’s what many investors fear about it. Investors in health care have long thought Amazon was going to get into that field and force companies that make and distribute medications or medical devices to drastically lower their prices.
When the three companies said they want to create a partnership “free from profit-making incentives and constrains,” Amazon would seem to be the blueprint.
By contrast, few associate fear with Buffett, the 87-year-old “Oracle of Omaha.” He’s respected for his 70 years of successful investing, beloved by many for giving billions to charity — he has said he plans to give away at least…