Warren Buffett, Jeff Bezos and Jamie Dimon recently announced that their three companies will form a non-profit entity to attempt to drive down healthcare costs for them and possibly other companies. In the process of making the announcement, Buffett called the healthcare sector of the U.S. a “hungry tapeworm” in the economy. We view this as PR grandstanding, incorrect in its assumptions about healthcare costs, and the height of hypocrisy. It reminds us who might be the real tapeworms in the U.S. economy and could open some great doors to future appreciation.

Jeff Bezos has spent the last year creating future revenue fantasies by spooking entire industries as he created the largest net worth on paper in the world. Every time he does this, the target companies plummet and Amazon’s shares benefit. The healthcare sector is his latest punching bag, as reflected in these stocks getting trounced on January 30, 31, and February 2, 2018. Below is the chart of what happened in the aftermath of the retail and grocery bloodbath from Amazon’s Whole Foods acquisition last year:1

Scott Galloway, Professor of Business at NYU, points out correctly that these FAANG companies have more power than a free-market capitalist system can handle. Government on both sides of the political aisle have yet to recognize this, and those on the left side of the political spectrum love Bezos’, Dimon’s and Buffett’s moral and financial support. Buffett looks like he is “talking his book,” because he owns very little in the healthcare sector in common stock or entire companies. Ironically, this grandstanding isn’t likely to do much more to drive down costs any more than Obamacare or the other companies that have tried the same thing.

The worst part of this lambasting of healthcare is the many erroneous assumptions made by everyone involved. Pooling in Obamacare attempted to drive costs lower by forcing healthy young people to buy insurance. The folks who had to buy and the surcharge tax on high-income Americans subsidized many who gained insurance. Costs continued to soar anyway.