Amazon is diving into healthcare, teaming up with Warren Buffett’s Berkshire Hathaway and the New York bank JP Morgan to create a company that helps their US employees find quality care “at a reasonable cost” and tackle the “hungry tapeworm on the American economy”.

The business giants offered few details on Tuesday and said the project was in the early planning stage. But the move from Amazon, which has long eyed the US’s enormous health market, sent shares in health insurance companies and pharmacy chains into a tailspin.

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“The ballooning costs of [healthcare] act as a hungry tapeworm on the American economy,” Buffett said in a 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 three companies have more than a million employees between them, and if the scheme is successful it could offer a model for a new entrant in a market that has rapidly consolidated in recent years.

Shares in United Health, the largest US health insurer, fell 5%. Its rival Aetna fell 3% despite announcing a 75% hike in quarterly profits.

Amazon, Berkshire and JP Morgan said the new venture’s initial focus would be on technology but failed to give details. In a statement the trio said the new entity would be independent and “free from profit-making incentives and constraints” but they did not reveal how much money would be invested or whether they intended to expand beyond their own employees.

However, the JP Morgan CEO, Jamie Dimon, said: “Our goal is to create solutions that benefit our US employees, their families and, potentially, all Americans.”

Any solutions the company devises would find a huge and receptive audience. Covering about 151 million non-elderly people, employer-sponsored plans make up the largest part of the US health insurance market.

Healthcare spending totaled $3.3tn in 2016, an 18% share of the country’s gross domestic product and 4.3% higher than the previous year, according to the US Centers for Medicare and Medicaid Services.

Buffett has been a persistent critic of the cost of US healthcare, an issue he said last year was a far bigger threat to business than corporate tax rates.

Companies get a tax break for offering health benefits to their workers, and many employers also see them as a critical tool for attracting and keeping workers. But costs are soaring and healthcare consumes a growing chunk of their budgets. Small businesses have been under particular strain.

Only 50% of companies with three to 49 employees offered coverage last year, according to the not-for-profit Kaiser Family Foundation. That’s down from 66% more than a decade ago. The federal Affordable Care Act requires all companies with 50 or more full-time employees to offer it.