By MIKE MAGEE
Can you wrestle a collusive, private, profiteering Medical-Industrial Complex to the ground by throwing more private entrepreneurs at it? Apparently not.
The very public collapse of Haven – the widely heralded health joint venture of Amazon, Berkshire Hathaway, and JP Morgan Chase – is a case in point. After three years, it is unclear whether they were a public-spirited triad trying to bathe efficiency into our bizarre employer-based health insurance scheme, or becoming predatory investors in one of the most profitable segments of our national economy.
When launched nameless in January, 2018, most of the focus was on the three amigos – Warren Buffett, Jamie Dimon, and Jeff Bezos. The linking of hands of the nation’s biggest technology power player, her most revered and respected investor, and her highest ranked financial all star, was impossible to ignore.
What were they up to? No one was quite sure. But there was enough concern about disruption of a sector controlling nearly 1/5 of the American economy that prices of CVS Health, Walmart, Cardinal Health and Express Scripts dove south.
This week, with the announcement of the non-profit joint venture’s collapse, analysts wasted no time piling on. As one said, “Haven had a rocky three years, running up against vague marching orders, a lack of direction, and obstacles inherent to the healthcare landscape.”
But it didn’t start that way. Warren Buffett presented health care that day as “a hungry tapeworm on the American economy.” Jamie Dimon noted that we pay twice as much for poorer quality care than other developed nations. And Jeff Bezos suggested that it was time for PBM’s and insurers to trim their sails.
By the summer of 2018, the three signaled they were seriousby hiring widely acclaimed health leader, Atul Gawande, as their CEO. As Buffett said, “Jamie, Jeff, and I are confident that we have found in Atul the leader who will get this important job done.” It would be another nine months before they could settle on a name for the venture – Haven (as in safe haven for their 1.3 million combined employees).
CNN Business reporter Tami Luhby laid out the stakes at the time. “The expectations are enormous: Gawande has been given a lot of latitude, a lot of time — and most importantly, a lot of money — to curb the ‘hungry tapeworm on the American economy’…”
Gawande had many adoring admirers. Niall Brennan, chief executive of the Health Care Cost Institute, at the time stated, “The cynic in me … wonders if anybody can make a difference. The optimist in me would say that if anybody can make a difference, it’s probably Atul…He’s a god-like rockstar in health care…an incredible visionary thinker and clinician with also a track record of innovation.”
But the plan was fuzzy from the start. Gawande stated with a broad sweep, “The good news is the best results are not the most complicated or expensive. The right care in the right place is often more effective and less costly than what we get today.”
That didn’t threaten the Medical-Industrial Complex much. They’d heard it all before. But his June, 2019 speech at the Aspen Institutewas somewhat alarming. He said, “I think the only way we go is by having us collectively paying into a system that no matter where you’re employed, you have coverage all along the way, and that’s what I think people mean by single-payer. It’s the necessary way to go.”
Gawande set about assembling a first rate executive team, eventually amassing 57 employees in Boston to run the non-profit venture. But when his highly respected chief operating officer, Jack Stoddard, formerly the lead at United Healthcare’s Optum, up and left after only 8 months without explanation, analysts began to ask questions.
Investors became skittish. Some noted that Gawande was splitting his time – still writing for the New Yorker and working as a Harvard based surgeon. Others pointed to an absence of organizational cohesiveness. All three partners were also pursuing independent ventures in the health care space, and were continually running into proprietary roadblocks.
Amazon, in particular, had its own agenda. Their wearable health tracker, Amazon Halo, augmented by Alexa features, was now joined by virtual and in-person Amazon Care clinics for its own employees. Those employees have access to premium priced prescription drugs after the company purchased PillPack for $753 million in June, 2018.
Other analysts noted a lack of momentum. The first market forays – like their new no-deductible insurance policy – was slow to come and not overwhelmingly embraced by the 30,000 JP Morgan employees. There were also rumors that Amazon in particular was about to pull its financial support.
In May, 2020, Dr. Gawande announced his own exit, partially under the cover of more active reporting and commentary necessitated by the growing pandemic. Ultimately, he agreed to serve on President-elect Biden’s coronavirus advisory board.
On January 3, 2021, came the announcement that Haven would cease to exist next month. As one analyst put it, this “is a reminder that the U.S. healthcare sector is incredibly resistant to makeovers…”
And yet, it is useful to ask why none of the Triad seem to have regrets.
Jamie Dimon said, “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.”
Warren Buffett said previously, that this was a “a first step in what is bound to be a long journey.“
And a Bezos spokesperson noted, “The venture’s backers found Haven was a good venue to test new ideas and best practices that could be better implemented individually.”
TIME correspondent Karl Vick, in an article titled “What Happens When Amazon Takes on Health Care”, in February, 2018, wrote: “The U.S. health care system is the antithesis of Silicon Valley.”
But is it really? Are these three really any different than all the other collusive members of the Medical-Industrial Complex? Or are they simply entrepreneurs seeing a unique business opportunity?
There is a reason why all other developed nations maintain public regulatory oversight and control of their national health care systems. It is because they learned long ago that there is no “safe haven” when it comes to ceding control of health delivery oversight to profiteers.
Mike Magee, MD is a Medical Historian and Health Economist and author of “Code Blue: Inside the Medical Industrial Complex.“