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Amazon, Berkshire Hathaway and JP Morgan Chase Launch Health Venture, Name CEO

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Amazon, Berkshire Hathaway and JP Morgan Chase Launch Health Venture, Name CEO

June 25, 2018

According to the New York Times:

“Amazon, Berkshire Hathaway and JPMorgan Chase, the powerful triumvirate that earlier announced its hope to overhaul the health care of its employees and set an example for the nation, said on Wednesday that it had picked one of the country’s most famous doctors to lead the new operation.

Dr. Atul Gawande, a Harvard surgeon and staff writer for The New Yorker magazine, will become chief executive of the new company, which will be based in Boston, on July 9. He said he was not stepping down from his current medical and other duties to take the job.

[…]

As desperate as employers are to see significant change, the alliance’s three chief executives — Amazon’s Jeff Bezos, Berkshire Hathaway’s Warren Buffett, and JPMorgan Chase’s Jamie Dimon — have offered little detail as to what they want, and their efforts so far have been received with skepticism. Corporations have long tried to reduce the cost and complexity of medical care, but making changes requires taking on powerful interests like big hospitals and insurance companies that want to preserve the status quo.”

A more recent Politico Pro article shares a few more details on the venture, though much remains unknown:

“Gawande stressed that the new venture will be an independent company — and everything they learn will be shared. ‘What we discover has to be open to everyone,’ he said, noting that it's the same mission that policy experts have pursued for years, including Gawande's own team at Ariadne Labs.

— The 'three sources of waste' that Gawande wants to eliminate are (1) the layer of costs added by middlemen, (2) inflated pricing and (3) misallocated care. "The wrong care is pushing out the right care," he said.”

ANCOR is sharing this story as this venture could emerge as a new model for employer-based healthcare, which could be of interest from an agency-management perspective.