It’s official — Haven is a bust.
Three years ago JPMorgan Chase, Amazon and Berkshire Hathaway announced their joint bid to tackle rising costs in healthcare and a lack of access to primary care. The news sent insurance and pharmacy stocks plummeting. But after a slow start, lack of a defined strategy and executive departures including that of its famed CEO and COO, and nary a detail on progress, the once-feared joint venture will dissolve.
Market Trends to Watch for Health Systems and Their Specialty Pharmacies
The future looks bright for the integrated specialty pharmacy model – for health systems, providers, and most importantly, for patients.
“There was no defined strategy out of the gates,” said Dr. Dan Gebremedhin, a partner with Flare Capital. “The concept of improving healthcare, reducing overall costs, I wouldn’t say is necessarily a strategy. It’s a goal.”
Haven will cease operations at the end of February, company spokesperson Brooke Thurston confirmed in an email.
She added that the three companies “… will leverage these insights and continue to collaborate informally to design programs tailored to address the specific needs of our individual employee populations and locations.”
Haven was tasked with tackling some of the biggest challenges employers faced in healthcare: rising costs and a lack of access to primary care. The idea was that the trio of business giants would use their scale and expertise to improve insurance plan design and drive down prescription drug costs.
Heard at HLTH 2024: Insights from Innovative Healthcare Executives
Executives from Imagine360, Verily, BrightInsight, Lantern, and Rhapsody shared their approaches to reducing healthcare costs and facilitating digital transformation.
The company hired a dream team, including famed surgeon and author Atul Gawande, and set off with much fanfare on its mission to change healthcare in the U.S. But that wide-reaching mandate, along with the need to coordinate across three companies that each were working on their own healthcare plans, may have set up the effort for failure, experts said.
CNBC first broke news of Haven’s plans to disband, noting its 57 employees would be placed at Amazon, JPMorgan or Berkshire Hathaway as they further their own healthcare efforts.
In fact, it may have been these individual company efforts that doomed the collaborative body’s fate.
“The reality was that each of these companies were undergoing their own efforts as well,” Dr. Sachin Jain, CEO of SCAN Group and Health Plan, said in a phone interview. “So, you had this interesting channel-conflict problem which is that Amazon, Berkshire and JPMorgan were continuing to do their own individual organizational initiatives even as Haven as a joint entity was supposed to be a coordinating body.”
For example, Amazon recently launched its own pharmacy service based on its recent acquisition of PillPack. It also rolled a new telehealth service for its employees, which it reportedly is looking to extend to other companies, according to anonymous sources cited by Business Insider.
And while the three companies’ scale was certainly eye-popping, it still wasn’t enough to gain sway in individual healthcare markets, Jain said.
“The fact that these employers represented over 1 million employees, the density in any given market didn’t give Haven or its constituent businesses adequate market power to actually move the needle,” he said. “In order to be successful at this scale with a mandate as big as this one, I think what the three organizations needed to do was build a much broader coalition. I think that was a missed opportunity.”
A monumental task but little detail
Though the joint venture has yielded some incremental victories, such as removing deductibles and coinsurance to encourage employees to use primary care, Haven has largely been mum on its efforts.
Its website has just a handful of announcements: Haven’s formation, its hiring of Gawande as CEO, and two years later, his plans to step back to focus on the Covid-19 pandemic.
Despite the failure, Haven will leave a legacy of sorts. The shock when JPMorgan, Amazon and Berkshire announced they were working together was enough to make other employers re-evaluate their health benefits, and caused insurers enough discomfort to act.
“The legacy is that the carriers did a bad job. They did just enough to keep these employer clients. That’s why Haven was started, because the carriers were not doing enough,” Gebremedhin said. “It forces these fat and happy entities to think twice about what they’re doing, their strategy. It’s a very healthy shakeup.”
In some ways, Haven’s dissolution could be seen as a self-fulfilling prophecy, Gebremedhin said. In the years since Haven drew so much attention to these problems in healthcare, both employers and insurers started working more with digital health companies to help address some of the glaring gaps in care.
“A lot of what Haven did in the market was bring a lot of attention to a handful of issues specifically within the employer community,” he said. “It really spurred a lot of activity that ultimately left very little opportunity for them to go out and execute.”
Photo credit: Kuzma, Getty Images