Berkshire Hathaway CEO Warren Buffett, J.P. Morgan CEO Jamie Dimon and Amazon CEO Jeff Bezos have chosen a CEO for their health-care venture and will likely reveal the name within two weeks, Buffett told CNBC on Thursday.
The three announced a partnership in January to tackle rising health-care costs. Buffett said they’ve picked a leader and are “just tidying up a couple of things.”
Health-care experts have expressed skepticism on whether the three, while business icons, could simplify the current system. Many agree there’s plenty of costs to cut, but they doubt the companies can do it.
The interesting thing when interviewing job candidates, Buffett said, was they didn’t run into one that “didn’t think significant improvement was both possible and important.”
“It isn’t like there’s anybody out there that’s connected with the system that thinks we’ve already arrived at nirvana, and they know how difficult the job will be to make major changes,” Buffett said. “They’re all cheering for us to succeed.
“A number of them might not have wanted to be the one to help us succeed, … but nobody disagreed with the mission, the importance of it or the feasibility,” Buffett said. “But it’s also a very, very tough nut to crack, and it’s going to take significant time. We’ve got the right person.”
As CNBC has reported, Todd Combs, an investment manager at Berkshire, has been the lead recruiter for the venture, tasked with the tall order of finding a leader who can work across three companies with a combined 1.2 million employees and simultaneously help develop innovative solutions in a multitrillion-dollar industry. In addition, any candidate would have the pressure of the high-profile mission as well as the weight of working under these three business leaders.
Buffett, Dimon and Bezos haven’t outlined how exactly they plan to lower health-care costs. Dimon gave a bit more detail Thursday on where they could focus their efforts.
“This is a long-term thing,” Dimon said. “We’re not looking for immediate success, but there are a lot of ideas out there. There are a lot of things that can be done better. We know the fraud, the administrative costs, we know overuse and underuse of various drugs and specialized procedures. We know the end of life often costs far more than it should and is far more painful than it should be, and with big data, there’s so many things to do.”
Some employees have asked Dimon what the partnership means for them. His response: “We’re just going to try to do it better.”
“And you should expect we’re going to do it the right way with the same kind of heart we’ve had before, which will improve your lives and improve your wellness, improve the outcomes, give you more choice, which I believe you if you do all those things, it will effectively be cheaper,” he said. “And you’ll have much healthier employees.”
The three companies aren’t the first to take on rising health-care costs. Many have tried unsuccessfully over the years on their own or through alliances. Even Walmart, the nation’s largest private employer, hasn’t been able to change the system.
Ana Gupte, senior health care services analyst at Leerink Partners, told CNBC’s “Squawk Box” the industry is convinced the three can be disruptive. She pointed to Cigna, whose CEO, David Cordani, told CNBC in March he’d spoken to two of the three leaders.
“I don’t think they have a blueprint yet” Gupte said. “And simultaneously, in parallel of anything, it’s catalyzed a lot of change in event-driven investing opportunities in the public space and what private equity is doing.”