(Bloomberg) – Warren Buffett’s healthcare venture has far bigger plans than simply squeezing middlemen for better prices, the billionaire said.
“It would be very easy I think to go in and shave off 3 or 4 percent just by negotiating power,” Buffett said Monday in an interview on CNBC. “We’re looking for something much bigger than that.”
Buffett’s Berkshire Hathaway Inc., along with Amazon.com Inc. and JPMorgan Chase & Co., said in late January that they planned to start a joint health venture to improve care for their workers. While the companies didn’t give much detail at the time, the announcement prompted broad speculation and unease among investors, sending shares lower for health-system players including insurers and pharmacy-benefit managers.
Healthcare spending is taking up an increasing proportion of the U.S. economy, and a goal of the venture, Buffett said, is to “at least” halt that. He said he hopes “that we could find a way where perhaps better care could be delivered even at somewhat lesser cost.”
Buffett said the business is looking to hire a chief executive within a year. He said the form and plans of the enterprise are still unclear and will be planned out by that person. And he cautioned that it’ll take plenty of time and effort before the venture can show results.
“I’m hopeful but don’t expect any miracles out of us soon,” he said. “This is not easy. If it was easy, it would have been done.”
Buffett was also asked on CNBC about Berkshire’s investment in the generic drugmaker Teva Pharmaceutical Industries Ltd. Buffett said the investment was made by one of his deputy stock pickers, and that he didn’t know the reasons they made it.
“Teva’s not a stock I bought, it’s one of the other two and I never talked with him about it,” Buffett said.