If you need to get an issue fixed, who better to call in than an expert who is a vocal critic? Working on that logic, Amazon, JPMorgan Chase and Berkshire Hathaway have picked well-known author and Harvard professor Atul Gawande to transform the healthcare they give their employees. According to Mint, the surgeon and journalist has written extensively about the US failure to grapple with rising healthcare spending.
Gawande will lead a new employee healthcare company focused on a mission that the three corporate titans had announced earlier this year: Figuring out ways to improve a broken and often inefficient system for delivering care. Berkshire Chairman and CEO Warren Buffett has previously described health costs as a "hungry tapeworm on the American economy".
Back in January, when the three companies had first announced the partnership, they had said that the new venture will operate as an independent entity, free from profit-making incentives and constraints, and the initial focus would be on technology that provides "simplified, high-quality and transparent" care. Other details like the name of the venture, its size, budget, et al, are yet to be disclosed.
The 52-year-old said he was "thrilled" to be named the CEO of the new company headquartered in Boston. "I have devoted my public health career to building scalable solutions for better healthcare delivery that are saving lives, reducing suffering and eliminating wasteful spending both in the US and across the world," said Gawande, adding, "Now I have the backing of these remarkable organisations to pursue this mission with even greater impact for more than a million people, and in doing so incubate better models of care for all. This work will take time but must be done. The system is broken, and better is possible." He will take over from July 9.
Chairman and CEO of JPMorgan Chase Jamie Dimon said in a statement that as employers and as leaders, addressing health care was one of the most important things that can be done for employees and their families, as well as for the communities. "Together, we have the talent and resources to make things better, and it is our responsibility to do so. We're so grateful for the countless statements of support and offers to help and participate, and we're so fortunate to have attracted such an extraordinary leader and innovator as Atul," he said.
In his annual letter to his bank's shareholders, Dimon reportedly laid out a broader agenda for the new venture: Aligning incentives among doctors, insurers and patients; reducing fraud and waste; giving employees more access to tele-medicine and better wellness programs; and figuring out why so much money is spent on end-of-life care.
But all three heads of the companies throwing their weight behind Gawande have noted that it will take time to figure out solutions. "We said at the outset that the degree of difficulty is high and success is going to require an expert's knowledge, a beginner's mind, and a long-term orientation," said Jeff Bezos, founder and CEO of Amazon, adding that "Atul embodies all three, and we're starting strong as we move forward in this challenging and worthwhile endeavour."
Healthcare researchers have said any possible solutions produced by this new venture will be felt well beyond the estimated 1 million workers the three companies employ in the United States. Employer-sponsored insurance covers about 157 million people, according to the Kaiser Family Foundation. That's nearly half the total U.S. population and the biggest slice of the country's patchwork health insurance market. The foundation also claims that insurance premiums in the US have soared 55 per cent over the past decade. So neither companies nor many of their employees are happy with how the system currently works.
Employers have reacted in part to rising costs by raising deductibles and other costs, asking their workers to pay more of the bill and to shop around for better deals. Many patients, especially the sickest, struggle with that. So companies, and employees, stand to benefit greatly from any solutions that can improve the system.
The daily added that though Gawande is a prominent name in healthcare policy circles, he hasn't run a major business. Citing Ana Gupte, a health stocks analyst at Leerink Partners, the report added that the choice of Gawande suggests that the venture will take a broad look at how to approach fixing health care. "The ABC [Amazon, Berkshire, Chase] coalition is looking not at the drug value chain in isolation, but more broadly at the overall healthcare system across payors and providers of care delivery," Gupte said.
The corporate trio and Gawande are not alone in seeking to fix the system. The report added that some major firms like Walmart Inc. have separately experimented with bypassing insurers entirely, instead buying healthcare for their workers directly from doctors and hospitals. Meanwhile, healthcare companies are acquiring insurance companies - like the CVS Health Corp-Aetna Inc deal in the works - to tackle everything in-house. The Amazon-Berkshire-JPMorgan venture could put further pressure on those middlemen.
Gawande practices general and endocrine surgery at Brigham and Women's Hospital and is Professor at the Harvard TH Chan School of Public Health and Harvard Medical School. He is founding executive director of the health systems innovation center, Ariadne Labs, and is also is a staff writer for The New Yorker magazine. He has also penned four New York Times bestsellers.
With PTI inputs