Amazon, Berkshire Hathaway, JPMorgan End Health-Care Venture Haven -- 2nd Update
January 04 2021 - 4:12PM
Dow Jones News
By Sebastian Herrera and Kimberly Chin
A health-care venture launched with great fanfare by three of
the world's most respected companies and their chief executives --
Amazon.com Inc., Berkshire Hathaway Inc. and JPMorgan Chase &
Co. -- is folding a few years after its founding.
Haven Health, originally sparked by an idea from JPMorgan Chief
Executive Jamie Dimon and supported by Amazon's Jeff Bezos and
Berkshire's Warren Buffett, sought to reduce health-care costs for
hundreds of thousands of workers at the three companies by pooling
resources and technology. Haven's stated aim at its 2018 launch was
to provide transparent health care for employees of the companies
at lower costs.
The joint venture, which was announced with enough fanfare to
push down the shares of major insurers, will cease operations in
February without having achieved those aims.
"The Haven team made good progress exploring a wide range of
health-care solutions, as well as piloting new ways to make primary
care easier to access, insurance benefits simpler to understand and
easier to use and prescription drugs more affordable," a
spokeswoman said. The three companies will be able to use what they
learned and collaborate informally in the future, she said.
Writer, surgeon and Harvard University professor Atul Gawande
was named Haven's chief executive, but he stepped down in May,
saying he would become executive chairman and wanted to focus on
the pandemic. Dr. Gawande, who took the head role in July 2018,
wanted to move away from day-to-day management of Haven, people
familiar with the matter said.
Turnover at the joint venture was a problem almost from its
outset, according to people familiar with the matter. Besides Dr.
Gawande, Haven saw an exodus of other executives, including
technology chief Serkan Kutan and operating chief Jack
Stoddard.
Haven sought to develop new ways to improve access to primary
care, simplify insurance coverage and make prescription drugs more
affordable, the company said. But the company showed few signs of
impact in the three years after its announcement. Haven started
pilot projects that focused on health-benefits approaches,
including one for about 30,000 JPMorgan employees in Ohio and
Arizona who were given options of flat costs for health-care
services. The company spent much of its early time building data
systems about employees across the three partner companies, people
familiar with the matter said.
The limited public achievements stand in contrast to Haven's
ambitions, which attracted the attention of leaders of several of
America's most recognized and respected companies. Berkshire's Mr.
Buffett, JPMorgan's Mr. Dimon and Amazon's Mr. Bezos all expressed
hope that the effort would help reduce costs for their workers and
improve care.
Combined, the three companies have more than 1.5 million
employees, with Amazon accounting for about 1.1 million on its own.
The tech giant has more than 800,000 workers in the U.S. and hired
400,000 in 2020 alone.
Even as Haven sought to improve health-care offerings for the
three companies, Amazon teams worked separately to significantly
expand the company's programs for its workers, particularly in the
Seattle area. In 2019, it launched a virtual primary care clinic
for employees there dubbed Amazon Care. The clinic came with an
option for nurses to visit employees in their homes.
Known for its "fail fast" culture, Amazon prizes quick
innovation and separate teams often work on similar projects at the
same time. It often operates as a network of small teams under one
umbrella rather than with centralized planning, according to
current and former Amazon employees.
The tech giant has long had its own health-care ambitions. In
November, it launched an online pharmacy. The pharmacy will ship
insulin, asthma inhalers and other common generic or branded
medications. It won't sell opioids or other drugs deemed at higher
risk of theft, and customers will need prescriptions for their
medications. Amazon said it would accept most insurance and offer
discounts to Prime customers who are uninsured. An Amazon
spokeswoman said at the time that "the same teams, technology, and
infrastructure that support PillPack by Amazon Pharmacy have
expanded to serve a wider range of customers, both in terms of
needs and numbers."
Amazon introduced its pharmacy about two years after buying
online pharmacy PillPack Inc. Previously, Amazon customers had been
directed to a separate site geared toward patients with complex,
chronic medical conditions.
Amazon spent billions of dollars in 2020 to set up testing sites
at its warehouses to screen workers for Covid-19. The company said
late last year that it would be conducting roughly 50,000 tests
daily by November. Amazon has also lobbied the federal government
to give its front-line employees priority access to coronavirus
vaccines as the shots begin to roll out.
Write to Sebastian Herrera at Sebastian.Herrera@wsj.com and
Kimberly Chin at kimberly.chin@wsj.com
(END) Dow Jones Newswires
January 04, 2021 15:57 ET (20:57 GMT)
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