• Amazon, Berkshire Hathaway, and JPMorgan are teaming up to try to make healthcare more affordable for their US-based employees.
  • Americans spent an average of $714 on out-of-pocket healthcare in 2016, up 3.6% year-over-year.

Amazon, Berkshire Hathaway, and JPMorgan Chase are creating a new business to lower healthcare costs for US-based employees in a move that could shakeup the managed care industry.

The companies were not specific about what kind of enterprise they aim to create, noting only that they want to improve employee satisfaction while reducing costs, according to a joint release. Still, the news was enough to send shares of managed care providers lower.

Americans on average spent $714, or 1.6% of their take-home pay on out-of-pocket healthcare costs in 2016, according to a report from JPMorgan. That was up 3.6% from the year before and up 13.5% from 2013. The bank also found that the US spent 18% of gross domestic product on healthcare, up from 13% in 2000.

Healthcare has been a focus of Warren Buffett

The rising cost of healthcare has been a focus of Berkshire Hathaway's chairman and CEO Warren Buffett and his partner Charlie Munger for some time. In May, the pair criticized the current healthcare system and suggested that a single-payer healthcare system in the US could be the long-term solution.

Buffett and Munger also lavished praise on Kaiser Permanente, a large managed-care consortium. Kaiser Permanente is made up of multiple branches to handle a variety of healthcare needs and operates their health plans on a not-for-profit basis, with a mix of for-profit businesses and health centers mixed in to help subsidize the other parts of the group. 

Tuesday's announcement was short on details, but the Berkshire partners praise of Kaiser Permanente and the stated goals of the new group, the Berkshire-JP Morgan-Amazon healthcare business could take a similar approach.

'Healthcare at a reasonable cost'

The companies, which employ a combined 1.1 million people worldwide, plan to create a new, independent company they say is "free from profit-making incentives and constraints." Initially, it will focus on technology solutions designed to "provide US employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost."

"The ballooning costs of healthcare act as a hungry tapeworm on the American economy," Buffett said in the statement. "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."

The new initiative will be led by Todd Combs, an investment officer of Berkshire Hathaway; Marvelle Sullivan Berchtold, a managing director of JPMorgan Chase; and Beth Galetti, a senior vice president at Amazon.

Managed healthcare stocks are getting hit

Armed with mountains of cash and an abundance of resources, Amazon's forays into new sectors can erase billions of dollars of market value in a short time as investors fear it's ability to shake up an industry.

This dynamic was in play on Tuesday, with shares of managed healthcare companies and pharmacy providers falling. The moves were as follows (all prices pre-market as of 8:20 a.m. ET):

Joe Ciolli and Bob Bryan contributed reporting.

This post originally appeared on Business Insider.