It was a venture that launched with a bang, but leaves with a whimper. That’s how some observers describe the lifespan of Haven, the healthcare alliance among giants Amazon (AMZN), Berkshire Hathaway (BRK.A, BRK.B) and JPMorgan Chase & Co. (JPM) that announced its dissolution this week.
- Haven, a healthcare venture formed by Amazon, Berkshire Hathaway, and JPMorgan, has announced that it will cease operations in February 2021.
- Expectations were sky-high when the three companies launched the initiative in 2018.
- Other employer-led consortiums continue to look for ways to improve outcomes and reduce costs in the healthcare system.
High Hopes, Tough Challenges
The anticipated potential of the joint venture, which was announced in January 2018, was significant enough to tamp down major insurers’ shares at the time. The companies’ three CEOs—Jeff Bezos of Amazon, Warren Buffett of Berkshire Hathaway, and Jamie Dimon of JPMorgan—lent their considerable public profiles to the project. Three years later, Haven says its leadership will collaborate informally and cease operations at the end of February 2021, according to a very brief statement posted on the company website.
The entity aimed to leverage resources and capabilities of the three titans to create better health outcomes, build greater satisfaction, and achieve lower costs. While its focus was on its U.S.-based employees and their families, a vision statement also noted that Haven intended “to share our innovations and solutions to help others.”
Just where that mission led was unclear, notes Larry Levitt, executive vice president for health policy at the Kaiser Family Foundation (KFF). “Haven didn’t seem to accomplish a whole lot, so its demise isn’t all that consequential in any tangible way,” he says. “What’s most interesting here is that yet another over-hyped effort to disrupt the health care system has failed.”
While details were scant, Amazon and JPMorgan Chase piloted new healthcare plan offerings to thousands of employees in certain states during the 2020 plan year, according to reports in Bloomberg and American Banker. The Haven-inspired rollouts focused on increasing transparency and reducing employee cost. More recently, Amazon introduced an online pharmacy in November 2020, two years after acquiring PillPack.
“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,” Haven spokesperson Brooke Thurston said in an email to Investopedia.
All three companies referred requests for comment to Thurston.
What’s the Future of Employer Consortiums for Healthcare?
Employer-led consortiums, of course, have been strategizing over healthcare cost and quality solutions for decades. And affordability is a top-drawer priority: KFF’s annual 2020 Employer Health Benefits Survey, for instance, shows employer premiums and deductibles rising faster than wages and inflation since 2010.
What’s more, the COVID-19 pandemic has deepened the connection between employee healthcare and overall business performance, suggests the Business Group on Health’s 2021 Large Employers’ Health Care Strategy and Plan Design Survey. In fact, 45% of employer members now say healthcare strategy is an integral part of their workforce strategy (up from 27% in 2018).
But it’s not easy to scale vast change. “There are employer purchasing coalitions that are doing important, nitty-gritty work to nudge the health system towards lower costs and better quality,” KFF’s Levitt says. “But, these coalitions generally lack enough market leverage to be transformative.”
At the Pacific Business Group on Health (PBGH), President and CEO Elizabeth Mitchell agrees that size can be a key factor. While Haven served a combined 1.2 million employees at the outset, PBGH employer members, by contrast, cover 15 million Americans.
That clout—combined with technical expertise in quality measurement and solutions that integrate with employers’ existing benefits infrastructure—enables the coalition’s 41 public and private member organizations to test new healthcare methods in specific markets, and then take successful approaches to scale across the U.S., Mitchell says.
“Success requires working with partners who understand the operational and technical complexity of translating big ideas into purchasing strategies and benefit designs,” she says.