A health-care venture launched with great fanfare by three of the world’s most prominent companies—
Berkshire Hathaway Inc. and
& Co.—and their chief executives is folding about three years after its founding.
Haven Health, sparked by an idea from JPMorgan Chief Executive Jamie Dimon and supported by
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
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
and operating chief
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.
Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8