On January 30th, three American business giants announced a partnership “to address healthcare for their U.S. employees, with the aim of improving employee satisfaction and reducing cost.” The three companies – Amazon, JPMorgan and Berkshire Hathaway – are known for innovation and it’s clear that the scale of their partnership could be a disrupter to the healthcare industry.

But with few if any specifics around what the three companies would actually build or create, the buzz created by the announcement quickly led to more questions.

From the press release…

“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.

Tackling the enormous challenges of healthcare and harnessing its full benefits are among the greatest issues facing society today. By bringing together three of the world’s leading organizations into this new and innovative construct, the group hopes to draw on its combined capabilities and resources to take a fresh approach to these critical matters.”

The lack of specifics didn’t deter media outlets, industry experts and elected officials from making speculations.

At Vox, Dylan Scott suggested the announcement might mean that the companies would become self-insured and “take all the administrative responsibility of running a health plan, rather than contract it out to a third party.”

Sen. Bernie Sanders (I-VT) who is no stranger to promoting out-of-box solutions for health care interpreted the announcement differently and wondered if this could be the start of some businesses embracing the changes for which he’s been advocating.

“Could this be the beginning of the American business community understanding that a not-for-profit Medicare for All, single payer system makes sense not only for the average American, but for the business community as well”, Sanders Tweeted.

At CNN Money, Tami Luhby speculated that Amazon could utilize its expertise and experience in optimizing distribution and supply channels.

What is known is that the yet-to-be-named initiative/company is being spearheaded by Todd Combs of Berkshire Hathaway, Marvelle Sullivan Berchtold of JPMorgan Chase and Beth Galetti of Amazon.

Look for updates here as more information is released.

The healthcare industry, the retail pharmacy industry and in fact lots of industries, were buzzing with the news that mega pharmacy chain CVS was pursuing a merger with Aetna, one of America’s oldest insurers. While the trend toward consolidation in healthcare is not new, a deal this size would be unprecedented in multiple ways. And the combined entity would have far-reaching implications for consumers, for employers and even the US government.

The negotiations are highly confidential, so any details about the deal, or the motivations behind it, are purely speculative. But Fred Goldstein, founder of Accountable Health Inc., offers a unique viewpoint on the merger. Goldstein points to a flaw in the Affordable Care Act known as the Medical Loss Ratio requirement.

“This requirement was put in place as a way to ensure that health plans did not make money by underutilizing medical care.  But it had the unintended consequence of insuring that costs never went down and here’s why.

Let’s assume that a hypothetical health plan offers a product at a $5,000 premium.  Based on this premium, they must spend 80% or $4,000 on Medical Care and the remaining $1,000 goes to cover administrative expenses and profit. At the same time, it’s fairly common knowledge that 30% and possibly more of healthcare costs are associated with waste, fraud and abuse.”

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