Berkshire, Amazon, JPMorgan Pick Surgeon to Lead New Health-Care Company
June 20 2018 - 12:35PM
Dow Jones News
By Anna Wilde Mathews and Emily Glazer
Warren Buffett's Berkshire Hathaway Inc. along with Amazon.com
Inc., and JPMorgan Chase & Co. have appointed surgeon Atul
Gawande as chief executive of their new partnership to address
rising U.S. employee health-care costs.
The appointment of Dr. Gawande, a globally-renowned surgeon,
best-selling author and public-health researcher, is effective July
9, the companies said Wednesday. The still unnamed health-care
initiative will be based in Boston.
Dr. Gawande practices general and endocrine surgery at Brigham
and Women's Hospital in Boston and is a professor at the Harvard
T.H. Chan School of Public Health and Harvard Medical School. He
founded Ariadne Labs and has been executive director of the
nonprofit center, which focuses on efforts to improve care and
reduce medical errors, for six years.
In addition to running the new venture, Dr. Gawande -- also a
staff writer at the New Yorker magazine -- will continue to
practice surgery and keep his position as a professor at Harvard,
as well as keeping a role at Ariadne Labs as chairman, according to
Ariadne Labs.
"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," said Jeff Bezos, founder and
CEO of Amazon, in prepared remarks. "Atul embodies all three, and
we're starting strong as we move forward in this challenging and
worthwhile endeavor."
In January, the three companies announced they teamed up to
figure out how to reduce health-care costs for their hundreds of
thousands of U.S. employees. The companies said the entity would
operate independently and be free from profit-making incentives and
constraints. Together, Amazon, Berkshire and JPMorgan have more
than one million employees, though not all of them in the U.S.
The three partners in the joint venture had an in-depth process
to select the new CEO. Berkshire's Todd Combs did initial
interviews with CEO candidates by phone in February, according to
people familiar with the discussions. Candidates later were asked
to deliver a white paper on how they would create a model for the
way employers buy health benefits, what team the CEO would need to
execute that strategy and how the new enterprise would use data
analytics, the people said.
Executives from the three companies were interested in Dr.
Gawande based on his experience at Ariadne Labs, a person familiar
with the matter said. The executives also believe with Dr.
Gawande's experience as a surgeon he has seen many successes and
failures of the medical system, this person added.
Dr. Gawande is a surprise choice, with a career spent outside
the traditional health-benefits and insurance industry and little
background in running large-scale operations. But experts said his
prominence, and his history advocating for improved care, ensure
that players across the industry will likely be eager to work with
him and track the new venture closely.
"He's a really interesting and compelling choice," said Jim
Winkler, a senior vice president at consulting firm Aon PLC. "The
biggest challenge he will face is, he doesn't have a large-scale
operational background...he has to build a company." He suggested
that Dr. Gawande would need to quickly hire a team with operations
experience.
The son of physicians, Dr. Gawande grew up in Athens, Ohio. Much
of his prominence stems from his New Yorker articles and books,
which have focused on a range of topics including care for those
with very serious illnesses, the complexity of the health-care
system, and practical efforts to improve treatment such as
checklists for physicians.
Dr. Gawande's Ariadne Labs has about 100 employees and generates
$20 million in annual revenue, according to a biography supplied by
Ariadne Labs. He is also chairman of Lifebox, another nonprofit he
founded, which focuses on making surgery safer globally,
particularly in low-income countries.
--Aisha Al-Muslim contributed to this article.
Write to Anna Wilde Mathews at anna.mathews@wsj.com and Emily
Glazer at emily.glazer@wsj.com
(END) Dow Jones Newswires
June 20, 2018 12:20 ET (16:20 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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