Nearly six months after Amazon, Berkshire Hathaway, and JPMorgan Chase & Co announced a joint healthcare venture, the organizations today tapped Atul Gawande, M.D., as CEO of the initiative.
Dr. Gawande will start in the CEO effective July 9. The new company will be headquartered in Boston and will operate as an independent entity that is free from profit-making incentives and constraints, the three organizations announced today.
As Healthcare Informatics noted in a news report published on January 30, “With an ambitious-sounding, if vaguely worded, announcement, three corporate giants—Amazon, Berkshire Hathaway, and JPMorgan Chase & Co. announced Jan. 30 that they were launching an initiative to improve satisfaction and reduce costs for their companies’ employees...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.’”
It was reported by CNBC’s Christina Farr that the joint venture had been struggling to find a CEO early on in the process. Farr specifically reported that “Health policy and insurance experts were among the initial targets, with ex-Aetna executive Gary Loveman and former Medicare chief Andy Slavitt on the list, along with Todd Park, who was previously President Barack Obama's technology chief.”Then, ABC, as the group is called, shifted the search, beginning to look “for a candidate with an entrepreneurial background in technology and health who is far removed from drug supply companies and health plans, which are viewed as part of the problem,” Farr reported in May. Then, even more recently, David Feinberg, M.D., CEO of the Danville, Pa.-based Geisinger Health System, confirmed to CNBC that he will remain in his position at Geisinger, despite some initial discussions that he would be joining the Amazon/Berkshire Hathaway/JP Morgan Chase initiative.Now, it will be Gawande, who is a well-renowned surgeon, writer and public health innovator. He practices general and endocrine surgery at Brigham and Women’s Hospital and is professor at the Harvard T.H. Chan School of Public Health and Harvard Medical School. He is also the founding executive director of the health systems innovation center, Ariadne Labs.
“I’m thrilled to be named CEO of this healthcare initiative,” Gawande said in a statement. “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 U.S. and across the world. Now I have the backing of these remarkable organizations 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.”
Details behind the initiative are still rather vague, but experts have pointed to reducing healthcare fraud and administrative costs as key areas that the companies will focus on. The lack of clarity has also led to skepticism among healthcare stakeholders. A recent survey from venture capital firm Venrock revealed that the majority of respondents are dubious about the impact of the Amazon/Berkshire Hathaway/JP Morgan healthcare partnership and believe the effort will face substantial challenges and take a lot of time to be successful.
Meanwhile, as Farr has previously reported, the CEO interview process involved asking prospective candidates to write a white paper on how they would fix the healthcare system. Farr wrote at the time of the report, “From those [10] white papers, three people were chosen to go through a harrowing interview loop. First, all three talked to [JPMorgan CEO Jamie] Dimon, who referred his two favorite picks to [Berkshire Hathaway CEO] Buffett. Buffett's top choice then interviewed with Amazon CEO Jeff Bezos, who could have vetoed the pick.
Farr also noted on a recent Healthcare Informatics podcast that it “definitely seems to be Berkshire Hathaway, not the other two companies, that are spearheading this [initiative].”In a statement today, Buffet said, “Talent and dedication were manifest among the many professionals we interviewed. All felt that better care can be delivered and that rising costs can be checked. Jamie, Jeff and I are confident that we have found in Atul the leader who will get this important job done.”
Bezos added, ““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. Atul embodies all three, and we’re starting strong as we move forward in this challenging and worthwhile endeavor.”
And Dimon noted, ““As employers and as leaders, addressing healthcare is one of the most important things we can do for our employees and their families, as well as for the communities where we all work and live. 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.”
Industry associations have also started to give feedback on the CEO appointment. Halee Fischer-Wright, M.D., president and CEO of the Colorado-based Medical Group Management Association (MGMA), said in a statement, “Today’s appointment of Dr. Atul Gawande to head Amazon, Berkshire Hathaway, and JPMorgan Chase’s new healthcare venture is welcomed news for future collaborations between some of the best innovators of our time and our nation’s medical practices. As a surgeon himself, Dr. Gawande has dedicated his career to developing models that deliver better care to patients while reducing costs across the board. We know that one of the biggest opportunities to provide cost-efficient delivery models and reduce inefficiencies in our healthcare system is partnering directly at the medical practice level—the point of care. This new venture has the potential to develop interesting new innovations for our industry that can help bring us closer to the medical practice model of the future, one that improves care while cutting costs. We look forward to working with Dr. Gawande to realize that vision.”
