Startups, Payers, Pharma

Unsealed testimony sharpens focus of Amazon-Berkshire-JP Morgan healthcare venture

According to ABJ COO Jack Stoddard, the initial focus of the collaborative is gathering data and researching the levers that drive costs and prices in healthcare.

A legal spat between UnitedHealth’s Optum division and the Amazon-Berkshire-JP Morgan (ABJ) healthcare venture led by Atul Gawande has shed a light into some of the goals and inner workings of the largely opaque collaborative.

The dispute has its roots in former Optum executive Dave Smith being hired by ABJ as a director of product strategy and research.

In response Optum sued Smith to prevent him from taking trade secrets about he obtained while working for the company to his new employer.

Since the launch of the collaborative last year, traditional healthcare incumbents have been nervous about the potential of ABJ to disrupt existing business models.

ABJ, however, has been insistent in its legal filings that it does not consider Optum to be a direct competitor and its main goal was to better provide healthcare services for the more than 1 million employees of its three partner companies.

In an unsealed testimony in the Smith case, ABJ Chief Operating Officer Jack Stoddard laid out in more detail the venture’s mission to make the healthcare system easier to understand and access.

He added that value proposition holds particular sway for a large of workers ABJ is looking to serve, which includes many fulfillment center and call center workers.

The transcript of Stoddard’s testimony was made public by Judge Mark L. Wolf after a motion from legal representatives of Boston Globe Media Partners LLC and Dow Jones & Co. Inc.

According to Stoddard, the initial focus of ABJ is gathering data and researching the levers that drive costs and prices in healthcare, ostensibly a focus of Smith’s potential role at the company.

“What data do we have, what insights can we glean from that data around cost and quality of care so that we can help then make that available as we think about helping patients choose doctors that are going to help them get better outcomes on the quality side at the best price,” Stoddard said, according to STAT.

Additionally Stoddard said the collaboration will pilot innovative ideas to more effectively utilize primary care, determine better ways to route patients to higher performing and less expensive clinicians and looking at new ways to lower prescription medication prices.

He added, however, that the company has no plans to form its own pharmacy benefit manager which would compete directly with OptumRX.

Stoddard said the company currently doesn’t have any products and will first be looking at existing vendors to provide healthcare solutions.

A previous court filing from Smith quoted an Optum executive saying that ABJ “was more likely to be a customer than a competitor to Optum.”

Photo: fstop123, Getty Images

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