Berkshire Hathaway 1999 Annual Meeting Audience Question # 59

Will Berkshire invest in or buy a health insurance business?

Warren Buffett:

Zone 8.

Audience Member:

Good afternoon. Ian Sacks from New York City.

This afternoon, through various questions and comments, we’ve mentioned the fact that the word “trust,” which Berkshire Hathaway and the brand has. We’ve mentioned, basically, health, and the importance of health, and that being above everything else.

With Berkshire’s competencies in the insurance industry and with the health care services sector being relatively depressed, is… although the dynamics would be different in the industry how risk is managed on an overall basis… has Berkshire looked at all, in terms of taking a position or buying a health insurance business?

Warren Buffett:

Charlie runs a hospital so I’m going to let him talk about this.

Charlie Munger:

Sure. We’ve looked a little. We’ve looked at everything in turmoil that’s important in the world. But so far it hasn’t seemed to yield our particular mental approach.

Warren Buffett:

Yeah. I don’t know who I would want to get in with in that business at the moment. That’s not… I’m not condemning the people in the business, it just means I don’t know. I’m not… I haven’t been able to evaluate that.

And I think it would make an enormous difference, in terms of wanting to get in with a quality operation and quality people and at a sensible price. And we haven’t seen that, but that doesn’t mean we’ve canvassed the whole field either.

Charlie Munger:

There is a significant percentage of schlock operators in the field who are painting the reality different than it is. That makes it harder.

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