Monthly Archives: January 2018

Amazon, Berkshire Hathaway and JP Morgan Chase join forces to tackle employees’ health-care costs

By Carolyn Y. Johnson

Three major employers, Amazon, Berkshire Hathaway and JP Morgan Chase, announced Tuesday they were partnering to create an independent company aimed at reining in health-care costs for their U.S. employees.

There were almost no details available about how the company would function or how it would disrupt and simplify the complicated fabric of American health care. But there’s no doubt that the companies, which collectively employ more than 1 million workers worldwide, have a real interest in ratcheting down their spending on health care. Health-care premiums are split between employers and employees and have been growing much faster than wages.

Major health company stock prices tumbled on the news, and the announcement stirred excitement — and questions — about how the three companies could bring their clout to containing costs in the massive employer-sponsored health insurance market, which provides coverage to approximately 160 million Americans.

“The U.S. health-care system is unsustainable in terms of its costs, and the entire debate by political leaders — whether it is Democrats or Republicans — has focused on repairing and replacing Obamacare and the ideological differences,” said John Sculley, who formerly led Apple and Pepsi-Cola and is now chief marketing officer of RxAdvance, a health tech company. “To have three of the most respected CEOs in the world step up and say that their companies are going to work together to focus on the real issues, of how do you make the U.S. health-care system sustainable and a better delivery of service than what we have today… it’s very positive.”

The announcement comes amid rampant rumors and anticipation that Amazon could disrupt health care as it has in other industries, particularly in the business of selling prescription drugs.

A person at one of the companies who is …read more

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It ‘feels a bit like 2006’ for stocks and the economy. That should scare us.

By Heather Long

The notes of Wilbur L. Ross, secretary of commerce, are pictured during the World Economic Forum annual meeting in Davos, Switzerland, on Jan. 24. (Denis Balibouse/Reuters)

The world’s elite are partying like it’s 2006, and that should probably scare us. Top business and political leaders, who met last week in the quaint ski chalet town of Davos, Switzerland, couldn’t stop talking about the booming global economy, record stock markets and President Trump’s tax cuts. They toasted the good times with bottles of bourbon that cost several thousand dollars each.

But there is something unnerving about all of this: 2006 was followed by 2008, the worst financial crisis of just about everyone’s lifetime. Some of the wisest minds at Davos said it feels eerily similar right now, and that’s not comforting.

“The biggest concern I have is no one thinks there’s a chance of a recession this year or next,” Carlyle Group co-founder David Rubenstein said. “The conventional wisdom is usually wrong.”

Harvard economist Kenneth Rogoff said, “I’ve never seen it so complacent. I mean never.”

Citigroup chief executive Michael Corbat noted, “My biggest concern is the market is ignoring all the risks.”

So what should we be worried about? Several fears were mentioned — publicly and privately — in the midst of lavish Davos celebrations.

North Korea. Blackstone chief executive Steve Schwarzman said he is now worried about politics, not economics, and called North Korea the “main event geopolitically.” He said he thinks it’s a mistake for investors to dismiss the possibility of military action.

“No one is listening in the financial markets,” said Schwarzman, who spends a lot of time in Asia. “I think they just think it won’t happen.”

South Korea’s Foreign Minister Kang Kyung-wha tried to sound optimistic in Davos about relations with North Korea. The two countries are sending a joint team …read more

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