Amazon-Berkshire-JPMorgan Health Venture Takes Aim at Middlemen

Dr. Atul Gawande to Lead New Healthcare CompanyEarlier this year, Amazon, Berkshire Hathaway, and JP Morgan Chase announced that they were forming a joint venture designed to lower the cost of healthcare for their employees. Like many corporations, these companies are facing higher healthcare costs and are looking for a solution that will provide long-term results.

Until recently, how these companies would achieve cost savings was a mystery. However, with the announcement by the respective CEOs Jeff Bezos, Warren Buffett, and Jamie Dimon to select famed surgeon and lecturer, Dr. Atul Gawande, to lead their new healthcare organization, the direction that this joint venture plans to take is becoming slightly clearer.

While the details are still thin, we do know that this new venture will be “free from profit-making incentives and constraints.” We also know that Gawande has historically pointed toward integration in healthcare as one of the primary ways that systems can eliminate waste and recognize savings. Gawande indicated that his goal would be to target three specific kinds of waste: administrative costs, high prices, and improper healthcare usage.

Additionally, Dr. Gawande seemed to question the sustainability of tying health insurance to one’s place of work, saying “tying how you get your health to your place of employment is going to become less and less tenable as fewer and fewer people are getting coverage through their employment.” He is also supportive of a government provided single payer type healthcare system. How his support of these policies will tie into his vision for this new business is yet to be seen, but we are slowly starting to get a glimpse into what direction that company might be headed.

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