Haven Healthcare, the much-touted venture founded by Amazon, Berkshire Hathaway and JPMorgan Chase with the goal of “disrupting healthcare,” announced it will shut down in February.
Three years ago, the company was created with the ambition of improving health outcomes and reducing healthcare costs. It garnered a significant amount of attention at the time, with many hopeful that three of the most successful companies in the world could bring innovation to the $3.5 trillion healthcare industry.
But the company’s dissolution without reaching those goals highlights the difficulties in affecting real change in the healthcare system.
“The Haven team made good progress exploring a wide range of healthcare 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,” said Brooke Thurston, a spokeswoman at Haven. “Moving forward, Amazon, Berkshire Hathaway and JPMorgan Chasewill leverage these insights and continue to collaborate informally to design programs tailored to address the specific needs of our individual employee populations and locations.”
Some experts say one of the main issues that led to Haven’s demise was the lack of a clear plan.
“When they initially announced it, they were very transparent that they did not have a detailed plan on how they were going to disrupt healthcare,” noted Michael Thompson, president and CEO of the National Alliance of Healthcare Purchaser Coalitions. “They had clear objectives around improving health and outcomes and taking out waste, but I don’t think they ever intended to have a predefined point of view on exactly how they would do it.”
Gerald Kominski, a professor in the Department of Health Policy and Management at UCLA, agrees, adding that Haven launched with an “extremely elusive goal.”
“Their ambition was to be a transformative actor in the healthcare marketplace and to try and develop innovations in employment-based insurance that would lower cost and improve quality and access to care,” he explained. “I remember being very skeptical. Those are all aspirational goals, and I fully support those goals. The problem is that all the years that I’ve been studying healthcare marketplaces, one of the failures people continue to make over and over again is thinking that healthcare markets work as almost every other marketplace in the economy, and that’s just not the case.”
This idea of a top-down dramatic change to the healthcare system was unlikely to be successful, noted Douglas Holtz-Eakin, president of the American Action Forum.
“It’s hard to change healthcare for a lot of reasons,” he said. “But one of the big reasons is that it’s nearly a fifth, or 20%, of the economy. That means there’s a lot of entrenched businesses and powerhouses, and disruptive change is going to be hard to engineer.”
In addition to a lack of collaboration among Amazon, Berkshire Hathaway and JPMorgan Chase in executing projects — not to mention what some considered a problematic choice for a CEO — the goal of reducing healthcare costs purely from a private-sector standpoint was also likely unattainable, Kominski said.
“The fact that they’ve basically had to close down and abandon ship within three years I think is proof that private solutions alone are not going to control healthcare spending, not in any substantial way,” he explained. “It requires either some government regulation or certainly public-private partnership. But the private sector alone isn’t going to bring down healthcare spending.”
Haven’s 57 employees are expected to be moved to Amazon, Berkshire Hathaway or JPMorgan Chase, where the companies will work on healthcare endeavors individually and informally.
Thompson believes healthcare innovation from the Haven companies is still possible. In order for it to happen, however, they’ll have to change their approach. That likely means supporting the companies’ national push with an effort to forge key relationships on a market-by-market basis.
“The promise that everybody was holding out hope for was that what Amazon had done in other industries could help dramatically change healthcare,” Thompson said. “I think that they will continue and that Amazon will be a leader in innovation in this area. But they will increasingly need to partner with stakeholders that need presence region by region.”