JPMorgan’s Chief Executive had to hit the phones to ease investment banking clients’ worries over the bank’s recent healthcare partnership with Amazon and Berkshire Hathaway.
Last week, the companies announced they are teaming up to create an independent healthcare company in an effort to fix the nation’s healthcare system, address healthcare for their U.S. employees and focus on reducing costs and improving customer satisfaction. To do that, they will create a constraint-free independent company that isn’t focused on profit-making incentives.
“The ballooning costs of healthcare act as a hungry tapeworm on the American economy,” said Berkshire Hathaway chairman and CEO Warren Buffett in a press release. “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.”
While this is good news for consumers, the announcement did cause some healthcare stocks to drop, including shares for UnitedHealth Group, Cigna, Humana, Anthem and Aetna.
And after some clients expressed their concerns to JPMorgan, Chief Executive Jamie Dimon quickly got on the phones to alleviate those fears, according to The Wall Street Journal.
As the largest U.S. bank by assets, JPMorgan definitely doesn’t want this new partnership to disturb its health-care investment-banking franchise, which collected $682 million in revenue in the U.S. last year.
“The response has been overwhelmingly positive,” said JPMorgan spokesman Brian Marchiony. “We’ve had hundreds of phone calls and emails from client CEOs, doctors and health-care administrators looking to see how they can get involved.” He added, “We see this as an opportunity to work with the industry to tackle the issues facing our country.”
Regarding the new endeavor with Amazon and Berkshire Hathaway, Dimon said his staff wants transparency, knowledge and control when it comes to their healthcare. Last year, JPMorgan spent $1.25 billion on medical benefits for its U.S. employees, covering almost 300,000 individuals.