Less than a year after Haven dissolved, two of the three companies behind the once-lauded healthcare joint venture have launched solitary efforts to tame healthcare.
On Thursday JPMorgan Chase announced that it has created a new healthcare business unit with a similar objective as Haven’s initial mandate. Amazon previously started rolling out its primary care telemedicine business for all employers, dubbed Amazon Care. Berkshire Hathaway, the third leg that made up the defunct Haven, for now at least, is not making healthcare headlines.
Called Morgan Health, JPMorgan’s new health business will be tasked with improving care for its 165,000 employees and their families, though details are sparse on how exactly it plans to do this.
Rather than building from scratch, Morgan Health emphasized collaborations in its approach. The new entity will also get $250 million to invest in “promising healthcare solutions,” and also hinted at a potential collaboration with CVS Health.
Dan Mendelson, a healthcare consultant who served during the Clinton Administration, will lead Morgan Health, which will be based in Washington D.C.
“We are going to take what we’ve learned and accelerate healthcare innovation in the employer-sponsored healthcare market, partnering with and investing in companies that share our goals, and measuring key health outcomes to show what works,” he said in a news release.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
Unlike JPMorgan, Amazon’s interest in healthcare pre-dated the launch of Haven.
The retail giant launched a pharmacy business late last year, based on its acquisition of PillPack in 2018. It also started selling employers on a new telehealth offering, after piloting it with its employees.
More recently, the company rolled out virtual therapy, which would let employees access therapists through video visits, text messages or phone calls, including three free visits. Even as Amazon tests these benefits, the company has faced criticism for grueling warehouse conditions, and the toll on workers’ mental and physical health, especially during the pandemic.
It hasn’t indicated whether it plans to offer mental health benefits to other companies in the future as part of its Amazon Care platform.
The third member of Haven, Berkshire Hathaway, hasn’t yet shared any big plans for healthcare after the joint venture dissolved. But CEO Warren Buffett still said he took something away from the effort.
During Berkshire Hathaway’s annual shareholder meeting, he said he learned a lot about the difficulty of changing an industry that’s 17% of the U.S. GDP.
“The tapeworm won,” he said, referring to a favorite metaphor for ballooning healthcare costs in the U.S.
Although it’s not clear exactly why the joint venture dissolved, one potential reason is that its three large backers each had their own individual initiatives rather than one cohesive plan.
But Berkshire was still able to achieve a less grand goal: saving money by finding inefficiencies in its own benefits.
“We probably saved more than the other two partners because they knew their situation better. We found some dumb things we were doing,” Buffett said in a transcript of the meeting. “So we got our money’s worth.”
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