The three-way venture, which seemingly came out of nowhere when announced, brought together three of America’s biggest companies led by three of America’s most prominent chief executives — Warren Buffett, Jeff Bezos, and Jamie Dimon.
And now, Buffett is having one of his top lieutenants, Todd Combs, an investment manager at Berkshire Hathaway and a member of JP Morgan’s board of directors, spend most of his time making this venture work.
In an exclusive interview with Yahoo Finance editor-in-chief Andy Serwer, Buffett said that, “[Combs] is spending over 40 hours a week just on the healthcare initiative.”
And the reason comes down to one chart — the rising percent of GDP spent on healthcare.
At the 2017 annual meeting of Berkshire Hathaway shareholders, Buffett said, “medical costs are the tapeworm of American economic competitiveness.”
When Buffett was beginning his career as an investor in the 1960s, healthcare costs were about 4% of GDP. By the end of 2016, healthcare spending by the government and individuals accounted for more than 18% of GDP.
Right now Combs’ focus, according to Buffett, is on getting a CEO in place to lead this venture.
“We need an extraordinary CEO because it takes a lot of imagination, and it takes a whole of execution,” Buffett told Yahoo Finance. “And it takes somebody that has a fervor for doing this beyond just having a job. It may take a month or two. It may take six months. But we have to have the right person.”
As outlined by the companies, the combined venture is aimed at creating an “independent company that is free from profit-making incentives and constraints.” This, of course, does not mean the company will be a non-profit, but that making money need not be its main concern.
“The initial focus of the new company will be on technology solutions that will provide U.S. employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost,” the companies said back in January.
In April, Jamie Dimon spoke with Yahoo Finance and outlined his view on this venture and why it’s a necessity that companies like Berkshire, Amazon, and JP Morgan find ways to lower healthcare costs not only to improve their businesses but to improve outcomes for their employees.
“Remember,” Dimon said, “we already do this. We buy insurance and we self-insure for all of our employees. We do wellness programs, chronic care, education, nutrition, gyms, all these things are trying to get our employees healthier. But we know we can do better.”
And when Buffett takes the stage at the Berkshire Hathaway annual shareholders meeting on Saturday, expect him to be asked more about this healthcare venture and how Todd Combs is doing in preventing America’s economic tapeworm from continuing to eat away at our economic potential.
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