Reaction is pouring in across many industries on Tuesday’s news that Amazon.com Inc., Buffett’sBerkshire Hathaway Inc. and JPMorgan Chase & Co. plan to set upa new independent company – “free from profit-makingincentives and constraints” – so that the three partners can offerhealth-care services to their U.S. employees more transparently andat a lower cost.

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Given the amount of attention mere rumors and speculation of an Amazon entranceinto the health care space has garnered over the pastseveral months, it's unlikely the buzz about this news will diedown any time soon. The question will be whether the endeavor canlive up to the lofty goals.

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Experts throughout the industry each have their own take. Here'sjust a sampling of what's being said around the industry:

Evolution in the health care system

“This is another example of large successful organizationslooking to evolve, transform and disrupt the health care ecosystem,as we’ve seen with other industry announcements from companies likeCVS/Aetna, UHC/Davita and Advocate/Aurora. We have alwaysencouraged companies to take an active role to mitigate cost whileimproving quality and health outcomes, and we will continue toencourage organizations to take bolder steps to leverage theircollective strengths to create change.

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“While it’s too early to tell exactly how Amazon, Berkshire andJP Morgan are going to pursue their stated goals, and while theannouncement specified that - initially at least - this is aboutsolving for their own specific challenges, this certainly has theattention of the industry and has the potential to betransformative. We believe in the need for new solutions thatimprove employee satisfaction and reduce costs, and we fullysupport efforts to bring innovation and constructive disruption tothis industry. This could very well be a catalyst for some bigchanges.”

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--Frank Easley, senior vice president, health carestrategist at Aon

Fed up and not going to take it

“The news that Amazon, Berkshire Hathaway and JPMorgan Chase areteaming up to launch a new health care company is, frankly,unsurprising to me. For some time now, employers of all sizes havebeen struggling on behalf of their employees to deal with a systemcompletely out of alignment with their needs. Costs rise, even ascovered services fall, affecting wage growth, worker well-being andbusiness productivity. Employers are fed up with the misalignmentand are actively looking to change how they sponsor employee healthcoverage.

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“In our national practice counseling employers on thedevelopment of employee benefit programs we’ve seen a strong andgrowing trend of employers willing to pursue alternative methodsfor providing effective health and prescription drug coveragebenefits to their employees – direct contracting, bundled payments,direct primary care, reference-based pricing, utilization ofon-site clinics, improved pharmacy benefit arrangements andmore.”

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--John Greenbaum, national employeebenefits practice leader at Risk Strategies Co.

"Stealth mode" engaged

“We may not get a ‘single-payer’ system, but will we get aduopoly? Its non-profit structure is noteworthy. That, andstarting with their employees underscores a large and strongalignment of its interests with constituents unlike anythingoutside of Medicare.

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“It is also noteworthy that Amazon, along with its cloudservice, discussions with Cerner, massive customer base of affluenthouseholds, has also acquired wholesale pharmacy licenses in atleast 12 states. (That reportedly precipitated the CVS Aetnamerger.) It also is another indication that the project may alreadybe well under way but trying to keep its actions in ‘stealthmode.’”

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--Heywood Sloane and Bob Grieb, principalsof DiversifiedServices Group Inc.

If Amazon, then Apple?

“This will likely only be the start of the companies’proposition. Its scope could expand to partner with other employersin the U.S. market. This would provide a major competitive threatto other U.S. health care providers, which has already beenconfirmed by their shares dropping in value following theannouncement.

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“If Amazon establishes itself in the insurance market, it willnot be long before other alternative providers follow suit. Appleis already a partner with Vitality in the UK, with the pairreceiving press for their offer allowing Vitality customers toreceive the newest Apple Watch at a discounted price. Apple hasalso updated its health app, enabling U.S. customers to see theirmedical records on their phone. This could signal a potential moveinto the health care space.

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“Alternative providers are highly influential brands, havemasses of consumer data and resources, and are known for providingexceptional customer experiences – all of which makes them asignificant threat to the insurance industry.”

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--Danielle Cripps, Insurance Analyst at leading data andanalytics company GlobalData

The market is ready

“Amazon, JPM and BH are important voices calling out anincreasingly urgent problem for employers, who together form thelargest private payer in the American health care system. Theincentives are misaligned, and the market is ready for improvementsin member experience and cost control driven by technology.

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“Employers spend more than $1.2 trillion every year insuringmore than 170 million Americans. The vast majority of that—coveringmore than 108 million Americans and representing ~$700 billion inhealth care spend every year—is through a model calledself-funding, when the employers directly take all theaccountability (and absorb the risk) for health benefits, but onlypay for the health care their employees use. These self-fundedenterprises have essentially been running their own mini-insurancecompanies for decades.”

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--Ali Diab, CEO and co-founder of Collective Health

Watching and waiting

“This announcement received a lot of press but at this point nodetails have been shared. ... As people live longer and theworkforce evolves, addressing gaps in the U.S. health care systemwill be critical not just for employees and their families, but forall health care consumers.

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“Of course, the focus on technology solutions continues tointerest all of us. Amazon and others continue to exploreapproaches that improve the cost and quality of health care byleveraging technology in the consumer and provider space. We lookforward to partnering with both current and new entities to helppioneer new ways to improve health. We’ve also been out in front informing collectives that facilitate group purchasing of services –and more recently, an initiative that offers employers in a givenhealth care market a way to collectively address quality issueswith local providers. It goes without saying that we will bewatching this and other new ventures closely and keeping you up todate on developments.”

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--Tracy Watts, U.S. leader of health care reformat Mercer

Shift in power

“At 1.1 million employees and growing, they are already adecent-sized ‘health plan’ in themselves and could essentiallyoperate as its own payer entity or possibly an ‘Accountable CareOrganization’ for their employees.

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“At a minimum it gives the companies more power to hold existingpayer vendors more accountable for health and cost outcomes fortheir employees. It gives them a chance to deliver better healthcare and reduced costs and change the market dynamics in thecommercial health care space. Expand this to the number of captiveand loyal customers these firms collectively touch and you suddenlyhave the possibility of this becoming a huge disruptingdevelopment.”

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--Maulik Bhagat, managing director atAArete

Industry uncertainty

“Merger mania in the health care space is indicative of industrywide uncertainty. The various stakeholders will try anything tobetter the system. Whether it’s CVS and Aetna, Amazon, BerkshireHathaway and J.P. Morgan Chase, Ascension and Providence St.Joseph, they will use their scale, business savvy and technology,to drive costs out of the system — something CMS has struggled todo on its own.”

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--Lyndean Brick, CEO of The Advis Group

Regulations and red tape

“Considering the regulatory burden around every aspect of healthcare, any new entrant in the space is at a huge disadvantage. Inlight of today’s announcement, the potential merger of CVS andAetna is even more compelling, as a more coordinated approach tomedical care is necessary to lower the overall health care costsfor consumers.”

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--Mickey Chadha, Moody vice president

Finally, something new

“This is one of the first truly new and radically interestingannouncements coming out of the banking industry in some time. Ifyou think about banks and the challenges they’re facing, it’s aboutrelevance and, if they have consumer trust, how do they useit?”

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--Kevin Travis, partner with Novantas, talking toAmerican Banker

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Katie Kuehner-Hebert

Katie Kuehner-Hebert is a freelance writer based in Running Springs, Calif. She has more than three decades of journalism experience, with particular expertise in employee benefits and other human resource topics.