On Jan. 4, a much-vaunted collaboration among three major U.S. corporations that had initially been touted as a potentially revolutionary new approach to help push the U.S. healthcare delivery system into value, was declared disbanded, just under three years after it had been created.
Haven Healthcare had been inaugurated on Jan. 30, 2018, as a not-for-profit joint venture by Amazon, Berkshire Hathaway, and JPMorgan Chase. Though it was not named for more than a year, the joint venture was hailed as a breakthrough at the time. The press release jointly published by the three companies on Jan. 30, 2018, stated that “Amazon (NASDAQ: AMZN), Berkshire Hathaway (NYSE: BRK.A, BRK.B) and JPMorgan Chase & Co. (NYSE: JPM) announced today that they are partnering on ways to address healthcare for their U.S. employees, with the aim of improving employee satisfaction and reducing costs. The three companies, which bring their scale and complementary expertise to this long-term effort, will pursue this objective through an independent company that is free from profit-making incentives and constraints. The initial focus of the new company will be on technology solutions that will provide U.S. employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost.”
At the time, Berkshire Hathaway chairman and CEO Warren Buffett stated in the press release that “The ballooning costs of healthcare act as a hungry tapeworm on the American economy. 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.”
But on Monday, leaders of the three corporations essentially threw in the towel and conceded that the experiment had not worked out. A very brief statement on its website read, in its entirety, thus: “In the past three years, Haven explored a wide range of healthcare solutions, as well as piloted new ways to make primary care easier to access, insurance benefits simpler to understand and easier to use, and prescription drugs more affordable. Moving forward, Amazon, Berkshire Hathaway, and JPMorgan Chase & Co. will leverage these insights and continue to collaborate informally to design programs tailored to address the specific needs of their own employee populations. Haven will end its independent operations at the end of February 2021.” As the Associated Press’s Tom Murphy wrote in a breaking-news report on Sunday evening, “A health care venture conceived by Amazon, Berkshire Hathaway and JPMorgan to attack soaring costs is dissolving. Haven, which was formed in 2018 by the three U.S. corporate giants, will cease operations by the end of February, a company spokeswoman said Monday. She gave no reason for the dissolution of the venture.”
As Murphy noted in his report, “The independent company was created to focus on improving the care delivered to employees of those businesses while doing a better job of managing the expense. But benefits experts expected any plans developed by Haven to become widely adopted by other companies if they proved effective in controlling costs. News of the venture’s creation nearly three years ago sent a brief shudder through the stocks of health insurers that manage employer-sponsored coverage,” Murphy added. “But the Boson-based venture has been largely silent since naming a high-profile CEO — Harvard professor, author and surgeon Dr. Atul Gawande — and then announcing its name in 2019. Gawande departed last May.”
As Business Insider’s Blake Dodge wrote on Monday, “Haven began in 2018, when Amazon, JPMorgan, and Berkshire Hathaway got together to solve the rising cost of healthcare in the US. At the time of its announcement, Warren Buffet memorably said that the ballooning costs of healthcare act as a "hungry tapeworm" on the economy. Haven was supposed to use the combined companies' resources to get costs under control and improve care for the member companies' employee populations, but it struggled to find an identity. It began by tackling primary care pilots that it couldn't market widely to employees in an effort to maintain secrecy, The Information's Paris Martineau reported in July. The pilot connected employees to primary care teams, similar to Amazon's app and service Amazon Care. Amazon Care, as Business Insider reported, was underway at the tech giant before Haven got started. Haven lost financial backing, The Information reported, as well as key leaders like Dr. Atul Gawande, the former CEO. Tensions escalated between Haven and the founding companies as the upstart struggled to come up with ideas quickly, and Amazon in particular has been the most reluctant to make commitments to Haven, according to The Information and a person close to Amazon.” Dodge was referring in his report to a July 16, 2020 article by The Information’s Paris Martineau entitled “What’s Ailing an Amazon Health Venture.”
Meanwhile, the Washington Post’s Jay Greene wrote on Monday that “JPMorgan declined to say how much it spent on Haven, except to note that the costs were ‘immaterial,’ spokesman Joseph Evangelisti said via email. In a letter to employees, Dimon pledged to build on Haven’s accomplishments, even though he didn’t specifically detail them. ‘Haven worked best as an incubator of ideas, a place to pilot, test and learn — and a way to share best practices across our companies,’ Dimon wrote. ‘Our learnings have been invaluable, and I look forward to working with all of you as we seek to make healthcare better, simpler and more affordable for all.’”
What’s more, Greene wrote, “Haven’s accomplishments remain unclear, and its struggles illustrate the challenges endemic to improving health care delivery in the United States, said Kate Bundorf, a professor of health policy at Duke University. ‘Health care is hard,’ Bundorf said. ‘It wasn’t totally obvious to me what exactly those three organizations working together were going to accomplish.’’
Further, Greene wrote, “At Haven’s launch, Bezos said Amazon was “open-eyed about the degree of difficulty” to reduce health care costs while improving patient outcomes. With Haven’s demise, Amazon spokeswoman Jaci Anderson declined to disclose the amount the company spend on the start-up, but said it was happy with the investment. Representatives for Berkshire didn’t immediately comment. The three backers will “continue to collaborate informally” on health care initiatives, Haven spokeswoman Brooke Thurston said Monday.”
And, Greene added, “Among the three companies, Amazon has taken several steps to develop its own health care business. In November, it debuted the Amazon Pharmacy a little more than two years after it acquired online pharmacy PillPack for $753 million, expanding into online prescription drug sales. Amazon has also rolled out facilities at its warehouses to test workers for the novel coronavirus.”
Also on Monday, CNN Business’s Paul R. LaMonica reported that “Haven had struggled to make inroads beyond its three partners since its inception. Haven CEO Atul Gawande stepped down last May and chief operating officer Jack Stoddard also left the firm in 2019 after just a few months' tenure.” And he noted in his report that “JPMorgan CEO Jamie Dimon wrote in an email to employees that was shared with CNN Business, ‘Haven worked best as an incubator of ideas, a place to pilot, test and learn -- and a way to share best practices across our companies. Our learnings have been invaluable.’” And Greene quoted spokesperson Brooke Thurston as telling him that, “Moving forward, Amazon, Berkshire Hathaway, and JPMorgan Chase & Co. will...continue to collaborate informally to design programs tailored to address the specific needs of our individual employee populations and locations."
Speculation blossomed on Twitter. A product developer named Christine Zhu (@christinexzhu) said:
Haven healthcare shuts down in Feb
— 𝐂𝐡𝐫𝐢𝐬𝐭𝐢𝐧𝐞 𝐙𝐡𝐮 ✨ (@christinexzhu) January 5, 2021
Speculating here: an incubator by 3 massive orgs - size made it fragile https://t.co/ZGTtIhRmol
Christina Farr, well-known as a healthcare business journalist and currently an investor (@chrissyfarr) tweeted,
Holy moly...
— Christina Farr (@chrissyfarr) January 4, 2021
Great scoop from @Hugh_Son
I remember the skepticism when this initiative first launched b/c employer health JVs seem to be doomed to fail. https://t.co/vvOJ7S02fU
