A top executive at Amazon, Berkshire Hathaway, and JPMorgan's health venture reveals the 6 biggest problems with US healthcare
Jenny Cheng/Business Insider
- Amazon, Berkshire Hathaway, and JPMorgan are on the hunt for solutions to some of the most perplexing healthcare problems.
- The chief operating officer of their health venture, Jack Stoddard, recently outlined six big problems the venture's founders asked the team to look into.
- In unsealed testimony, Stoddard said that the venture will spend 2019 deploying tests of programs through partnerships with other companies.
When Amazon, Berkshire Hathaway, and JPMorgan said in January 2018 that they planned to create a joint health venture, their vision was broad enough to send shockwaves through the entire $3.6 trillion industry.
The three employers oversee healthcare for about 1 million people, and spend $4 billion a year on it. When they joined forces, they said that the venture would be aimed at lowering healthcare costs and improving care for their workers.
Health insurers and members of the pharmaceutical supply chain were hit hard by the announcement based on worries that their businesses might be targeted by the three companies.
Now, we're getting a clearer idea of what the still-unnamed health venture's approach might be.
In a recently unsealed deposition as part of a lawsuit, the venture's chief operating officer, Jack Stoddard, outlined some of the areas the venture's focusing on, when asked about what details he told a prospective hire about the future of the company.
In particular, he spelled out six problems the venture's been asked by its founders to get to the bottom of:
Here are the questions the venture's starting with
- Why is getting primary care a challenge?
- Why is it hard to understand healthcare costs?
- Why is health insurance so complicated?
- Why is there a disparity between how much employers spend on healthcare and the experience their employees have using it?
- Why are employees frustrated?
- Why do healthcare costs keep going up?
"These are big problems that our founders have asked us to look at," Stoddard said.
Stoddard's remarks were included in unsealed testimony coming from a lawsuit between healthcare giant Optum and a former employee who went to work for the new venture. The testimony was unsealed after a motion brought by the parent companies of Stat News and The Wall Street Journal.
To be sure, the problems Stoddard outlined have complex answers, and it still remains to be seen how the venture will approach them.
Stoddard said that to start, 2019 will be focused on building the team, doing research, and deploying tests of programs through partnerships with other companies. For example, one of the first tests the venture might run is to simplify health benefits for a select group of workers. The test could knock out some of the complexity that exists in a traditional health plan, offer easier ways to get care, or make drugs prescribed to treat chronic conditions less expensive, he said.
If the tests are successful, JPMorgan, Berkshire Hathaway, and Amazon could expand them to more of their workers.
The lawsuit, filed on January 16, came a day before David Smith, a former senior executive at Optum, was scheduled to start working at the joint venture as its director of product strategy and research. The complaint said that by joining the health venture, Smith is in breach of contract and could reveal Optum's trade secrets. Optum is a unit of UnitedHealth Group.
On Friday, a judge in Massachusetts ruled that Smith could continue working at the health venture while the case goes to arbitration.
"We are committed to protecting our confidential information and will aggressively do so in arbitration," Optum spokesman Matt Stearns said in a statement Friday. A representative of the health venture declined to comment on the ruling.
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