Berkshire, Amazon, JPMorgan Pick Surgeon to Lead New Health-Care Company

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)

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