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 about three years after its founding.
Haven Health, sparked by an idea from JPMorgan Chief Executive
Jamie Dimon and supported by Amazon's Jeff Bezos and Berkshire's
Warren Buffett, sought to "transform health care" and reduce costs
for hundreds of thousands of workers at the three companies by
pooling resources and technology.
The joint venture, which was announced in 2018 with expectations
high enough to push down major insurers' shares, will cease
operations in February without having achieved those aims.
Haven's transformative ambitions proved too difficult to
achieve, according to people familiar with the matter. Its shutdown
attests to the challenges of making sweeping changes to the U.S.
health-care system and of bringing innovations to hundreds of
thousands of employees around the country working at different
companies, the people said.
"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 founding companies plan to try to split Haven's staff,
Mr. Dimon said in a memo to bank employees Monday.
"We'll collaborate less formally going forward as we each work
to design programs tailored to specific needs of our individual
employee populations and local markets," he wrote. "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."
Haven's setup proved unwieldy for solving the three sprawling
companies' problems, people familiar with the matter said.
Different employee bases and locations led to different priorities,
and each employer's existing health-care system required different
fixes, according to one of the people. After Haven struggled to
implement any changes, the three companies opted to close it down,
this person 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 focus more 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.
The joint venture struggled with turnover almost from its
outset, according to people familiar with the matter. Other
executives who left Haven included 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. It tested providing flat-rate costs
for health-care services, which all three companies piloted,
according to a person familiar with the venture. One such pilot
involved about 30,000 JPMorgan employees in Ohio and Arizona. Haven
also worked on experiments to lower prescription drug costs and to
make leading providers accessible to employees wherever they live,
this person said.
It couldn't be learned how much Haven cost the three companies,
as it operated largely out of public view, but the costs weren't a
significant factor in its shutdown, a person familiar with the
matter said.
The company showed few signs of impact in the three years
following its rollout, after spending much of its early time
building data systems about employees across the three partner
companies, people familiar with the matter said.
Haven's limited public achievements contrast with its ambitions,
which attracted attention from leaders of several of America's most
recognized 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. In a March
2019 memo posted on Haven's website, Dr. Gawande said the startup
would be "relentless," produce "high impact" work and "create new
solutions and work to change systems, technologies, contracts,
policy, and whatever else is in the way of better health care."
The three companies have more than 1.5 million employees
combined, with Amazon accounting for about 1.1 million. 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 expand the
company's programs for its workers, particularly in Seattle. It
launched a virtual primary-care clinic for employees there in 2019
dubbed Amazon Care. The program, which offered Seattle-area workers
at-home visits by nurses or clinicians, is now available for all
Amazon employees who use company coverage in Washington state,
including warehouse workers.
Amazon prizes its "fail fast" culture aimed at quick innovation,
and separate teams often work on similar projects at the same time.
The company 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, which has long pursued its own health-care
ambitions, launched an online pharmacy in November that 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 its pharmacy would accept most insurance and offer
discounts to uninsured Prime customers. 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 bought online pharmacy PillPack Inc. about two years before
introducing its own service. 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 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 17:54 ET (22:54 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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