Though few details are known about a healthcare industry-disrupting partnership signed by three of the largest U.S. companies, Cigna Corp. executives called the venture an "opportunity" rather than a threat to the insurer's business.
President and CEO David Cordani said during the company's 2017 fourth-quarter earnings call that the announcement from JPMorgan Chase & Co., Berkshire Hathaway Inc. and Amazon.com Inc. plays into the growing trend of employer-provided healthcare.
The three companies announced in a joint statement they were banding together to provide their respective employees lower-cost healthcare. The announcement sent ripples through the healthcare industry as the possibility of employers diverting business away rattled insurers, drug distributors and pharmacy benefit managers.
But Cordani said the announcement "reinforces" the trend of ditching the traditional fee-for-service model his company had already begun moving away from, and toward more transparency and coordination with large-employer group plans. The CEO said the old model is not sustainable as employers and consumers "demand more" from their health plans.
As medical cost trends keep rising at a rate of 6% to 7% annually, employers are seeing their investment in employees' healthcare as a strategic move to help run their business more effectively, he said.
"Over time, we think that creates more opportunity versus less for us because we seek to be an integrated partner from a services standpoint, providing the services that deliver the value," Cordani said.
