Jamie Dimon, Chairman and CEO of JPMorgan Chase & Co. Photo by Scott Olson, Getty Images
When Amazon, JPMorgan Chase, and Berkshire Hathaway announced in January that they were collaborating on a healthcare venture, most of the focus was on Amazon, the tech giant that has been dancing around a proper healthcare entrance for a number of years.
But the other two partners are also interesting -- what makes an investment bank and a conglomerate real estate company interested in the healthcare space, and what do they have to offer there? JPMorgan Chase CEO Jamie Dimon shed some light on that question, not to mention the question of what exactly this venture will do, in a letter to shareholders published last week as part of the bank's annual report.
"JPMorgan Chase, along with our partners Amazon and Berkshire Hathaway, recently formed a joint venture that we hope will help improve the satisfaction of our healthcare services for our employees (that could be in terms of costs and outcomes) and possibly help inform public policy for the country," Dimon wrote. "The effort will start very small, but there is much to do, and we are optimistic."
Dimon specifically discusses the venture in a section of the letter subtitled "America's growing fiscal deficit and fixing our entitlement programs," in which he zeroes in on healthcare spending as a financial issue.
"The core issue underpinning the entitlements problem is healthcare in the United States," he wrote. "Here are just a few places where we know we can do better: The United States has some of the best healthcare in the world, including our doctors, nurses, hospitals and clinical research. However, we also have some of the worst -- in terms of some outcomes and costs. Administrative and fraud costs are estimated to be 25 percent to 40 percent of total health-care spend. Chronic disease accounts for 75 percent of spend concentrated on six conditions, which, in many cases, are preventable or reversible. While we don't know the exact fix to this problem, we do know the process that will help us fix it. We need to form a bipartisan group of experts whose direct charge is to fix our healthcare system. I am convinced that this can be done, and if done properly, it will actually improve the outcomes and satisfaction of all American citizens."
According to the letter, the healthcare venture will hire a team that will start to work to apply "top management, big data, virtual technology, better customer engagement, and the improved creation of customer choice" to a number of healthcare problems including misaligned incentives; waste and fraud; over- and underutilization of specialized medicines; and the rising cost of end-of-life care, which patients and families don't always even want.
Of interest to the digital health world, Dimon said other focuses will be on creating better workplace wellness programs and "empowering employees to make better choices and have the best options available by owning their own healthcare data with access to excellent telemedicine options, where more consumer-driven health initiatives can help."