Haven, the healthcare joint venture between Amazon, Berkshire Hathaway, and JPMorgan Chase & Co., will disband by the end of the month. The ambitious venture generated considerable industry buzz during its three years of operation. Led by industry thought leaders from the consumer, banking, and financial worlds, Haven appeared a promising, innovative, disruptive force in healthcare. However, the organization never really delivered on its bold mission. Haven’s demise can teach us a lot about the challenges of — and opportunities for — change in healthcare.
Issue #1: Overly Ambitious, Vague Goals
Haven provides an excellent case study of how world-class expertise and aspirational goals may fail to make an impact in the massive industry that is healthcare. As Jeff Bezos, Amazon founder and CEO, said of Haven’s inception: “The healthcare system is complex, and we enter into this challenge open-eyed about the degree of difficulty.” Warren Buffet, Berkshire Hathaway Chairman and CEO, reiterated the immensity of the challenge, adding that there was “no guarantee of success at all” that Haven would succeed. To see where Haven may have gone astray, it’s helpful to look at the venture’s beginning and end.
An early press release listed the venture’s “initial focus” as creating “technology solutions that will provide U.S. employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost.”
Contrast this with the group’s statement announcing its end. “In the past three years, Haven explored a wide range of healthcare solutions, as well as piloted new ways to make primary care easier to access, insurance benefits simpler to understand and easier to use, and prescription drugs more affordable.”
Setting “Big Hairy Audacious Goals” is vital to transforming healthcare. That’s the bold thinking that informs the Quadruple Aim, a revolutionary concept in the industry. However, Haven was ultimately unable to translate this vision into a reality. Although it occasionally launched specific initiatives, such as a health-plan pilot backed by Cigna and CVS Health’s Aetna for approximately 30,000 workers announced in November 2019, they had limited success. As Advisory Board reported, “These plans launched during 2020 and included free preventive care, no coinsurance or deductible, copays for in-network doctor visits as low as $15, and other incentive programs. It’s still unclear what impact these plans had on employee health costs.”
Issue #2: No Market-Specific Products
Healthcare needs, resources, and utilization vary widely across the country. To accommodate these differences, stakeholders should take a local, market-specific approach to healthcare. That is the impetus behind the regional Geographic Direct Contracting Model from Centers for Medicare & Medicaid Services (CMS). As CMS Administrator Seema Verma said, “[The] model allows participating entities to build integrated relationships with healthcare providers and invest in population health in a region to better coordinate care, improve quality, and lower the cost of care for Medicare beneficiaries in a community.”
Haven, headquartered in Boston, involved stakeholders located in Seattle, Omaha, and New York City. The Cigna/CVS pilot program served workers in Ohio and Arizona. Although our hyper-connected world often allows us to overcome the challenges of a disparate geographic distribution, Haven was unable to meaningfully differentiate between unique regions and deliver products and solutions accordingly. Without a clear understanding of regional needs, Haven was not able to create a “single consumer health product,” according to Medpage.
A more successful strategy might have started in a single location with an “anchor” partner, creating products to meet that region’s needs, then utilized and tailored insights for other markets. This is Walmart’s approach. Last year, the one-stop-shopping mega-retailer opened several clinics in Georgia before expanding to Arkansas and Florida. While there “has always been skepticism about Walmart’s ability to provide the high-quality care experience,” according to healthcare consultant James Gardner, the company’s growth strategy is working. The company plans to open seven more locations in 2021.
Issue #3: Lack of Physician Leadership
While Haven’s leadership comprised some of the most extraordinary minds in business — Jeff Bezos, Warren Buffett, and Jamie Dimon — none were healthcare experts. The group made headlines in June 2018 when Atul Gawande, MD, surgeon and thought leader, accepted the role of CEO while continuing to practice. However, in May 2020, Dr. Gawande stepped down from the position. As Omar Manejwala, MD, Chief Medical Officer at DarioHealth, said to Fierce Healthcare, “I question the wisdom of having a part-time CEO given the scope of the problem they were trying to tackle.” A physician leader with specialized expertise might have helped unify and channel the business partners’ expertise, translating it into tangible results.
What Is the Winning Strategy for Innovation and Disruption?
The incredible buzz around Haven was due, in large part, to the combination of business savvy and success of its partners. Such an arrangement is an example of a recent trend in healthcare, “complementary strategic alliances,” as Frank Letherby, CEO of Privia Medical Group — Florida, noted. For these alliances to work, partners should prioritize alignment, implement governance structures, ramp up technology, and share data.
Matt Hawkins, CEO of Waystar, echoed this sentiment in his analysis of Haven’s demise for Fierce Healthcare. “A winning model will first solve the challenge of reducing administrative expenses by leveraging these impressive companies’ access to advanced technology, understanding of consumer behavior, and the ability to safely store and analyze data,” Hawkins said. By combining capabilities while respecting the unique offerings of all involved parties, these partnerships can create a win-win model.