The idea for industry titans Amazon (AMZN), JPMorgan Chase (JPM), and Berkshire Hathaway (BRK.A, BRK.B) to join forces to combat ballooning medical costs in the U.S. came from one of Warren Buffett’s investment lieutenants, Todd Combs.
“I can’t answer with 100% precision, but my impression is that it came about because there’s a fellow quite young that works for us, Todd Combs, who is also on JPMorgan’s board,” Buffett told Yahoo Finance’s Andy Serwer in a wide-ranging interview. “Todd and I have talked a lot about health care. And, I think Todd developed some ideas about how something like this might work. I think he’s the one that actually talked to [JPMorgan Chase CEO Jamie Dimon].”
Combs, a value investor who previously ran hedge fund Castle Point Capital, joined Berkshire Hathaway in 2010. Last year, Combs told Yahoo Finance that his job at Berkshire Hathaway consists primarily of reading. In fact, he estimates that he spends 80% to 90% of his time reading, whether it’s combing through SEC filings, scanning conference call transcripts, or devouring a couple of dozen trade magazines. For him, the reading commences when he gets into Berkshire’s offices on Farnam Street at 7:00 a.m. or 8:00 a.m.
These days, he’s been spending his time on healthcare, particularly searching for the initiative’s CEO.
“I’ll bet [Todd is] spending over 40 hours a week just on the healthcare initiative, and it’s totally toward getting the right CEO in place,” Buffett said. “There’s no sense jumping ahead and trying to plan out something. We need an extraordinary CEO because it takes a lot of imagination and it takes a whole lot of execution. And it takes somebody that has a fervor for doing this beyond just having a job.”
“I hope every company in the United States steals the idea from us”
Buffett, 87, has characterized the high healthcare costs as a “hungry tapeworm on the American economy.”
“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,” Buffett said at the time.
Buffett told Yahoo Finance that this will be a bigger objective beyond the three companies involved.
“I hope if we can figure out a way to have better care at lower cost and stem the constant rise as a percentage of GDP, I hope every company in the United States steals the idea from us,” Buffett said.
Julia La Roche is a finance reporter at Yahoo Finance. Follow her on Twitter.