BRK.A Berkshire Hathaway Inc

By Jon Kamp and Anna Wilde Mathews 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (February 21, 2019).

BOSTON -- A health-care joint venture launched by Amazon.com Inc., Berkshire Hathaway Inc. and JPMorgan Chase & Co. is looking at how to redesign health insurance, among other efforts, according to newly unsealed court testimony from an executive at the health startup.

The three companies announced the venture last year with stated goals of trying to improve health care and rein in costs for their employees. The still-unnamed venture has released few specifics, however, about its long-term aims.

Chief Operating Officer Jack Stoddard shed some light while testifying in federal court in Boston late last month. He was there for a hearing in a lawsuit filed by UnitedHealth Group Inc.'s Optum health-services unit, which aims to stop a former employee from working for the new venture.

In testimony unsealed Wednesday, Mr. Stoddard said the venture is focusing on the complexity of health insurance and asking if it can "reinvent what insurance looks like in terms of benefit design?" He said workers are often confused about what their plans cover. Employers could try different approaches and see what works, he suggested.

A spokeswoman for the venture declined to comment.

The newly unsealed testimony added some details to remarks Mr. Stoddard had made in open court while describing the venture, which he said is focused on helping its three founding companies' more than 1.2 million workers.

Mr. Stoddard had testified that the venture will be deploying smaller-scale tests of ideas like making primary-care access easier, or maintenance drugs cheaper. If these ideas work, they could be scaled up among the venture's owners.

One goal is to bolster the importance of primary care, he said in the newly public testimony.

The venture wants to "make it easier for doctors to do good care and to spend more time, not less time" providing care, he said.

Optum, which owns medical groups around the country, could be a good partner, Mr. Stoddard testified.

The new health venture had sought to keep part of Mr. Stoddard's testimony private. U.S. District Court Judge Mark Wolf ruled on Wednesday that a full transcript should be released, siding with a motion brought by Dow Jones & Co. Inc., publisher of The Wall Street Journal, and Boston Globe Media Partners LLC.

Mr. Stoddard said the startup is initially focused on analyzing data to "understand where there's variation in care, quality, where prices don't match value, where doctors are performing."

The venture also is looking at pharmacy costs, Mr. Stoddard testified, but has no plans to compete with existing pharmacy-benefit managers. Optum owns one of the largest PBMs.

"But we will look and say, could we contract with one of them to get more transparency?" Mr. Stoddard said.

Optum argues the three-company venture, known as ABC in court documents, is a rival and that former employee David W. Smith is bound by a noncompete agreement. Mr. Smith and ABC say they aren't aiming to directly compete with Optum, which sells a variety of health-related services to employers and others.

Mr. Stoddard also has said the venture doesn't have any products and is working on partnering with companies that can offer them. But the venture could consider building them if it doesn't find what it needs in the market, he has said.

Judge Wolf hasn't yet ruled on an Optum request for a temporary restraining order aimed at barring Mr. Smith from working for his new employer or sharing trade secrets. In a recent two-day court hearing, the judge sought testimony to help understand the venture's scope and goals.

Write to Jon Kamp at jon.kamp@wsj.com and Anna Wilde Mathews at anna.mathews@wsj.com

(END) Dow Jones Newswires

February 21, 2019 02:47 ET (07:47 GMT)

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