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Why Haven Healthcare Failed

Haven, the venture to disrupt U.S. health care formed by Amazon, Berkshire Hathaway, and JPMorgan Chase, is disbanding less than three years after its launch. When it was formed, the three companies had a lofty goal: to “provide U.S. employees and their families with simplified, high-quality, and transparent health care at a reasonable cost.” Atul Gawande, the famous author and surgeon, was hired as CEO, and Jack Stoddard, who served as general manager for digital health at Comcast, took the COO job. What transpired next was a slow drain of talent. Stoddard left only nine months after being hired, and Gawande departed a year later. Despite the companies’ combined 1.2 million U.S. employees and incredible market power, it just didn’t happen. Why? There are three factors: Read the full article in Harvard Business Review  

One Response to Why Haven Healthcare Failed

Marty Finkler says: 01/07/2021 at 3:30 pm

Hi John,
I agree with the three reasons you cite for Haven’s failure. The emphasis on market power is particularly important. It’s worth noting that the vast majority of medical care provided is local; so, market power must be local to provide a countervailing weight to the consolidation in medical care delivery. Of course, as an economist, I whole-heartedly agree with your view that the perverse effects of fee-for-service incentives must be replaced by a serious form of medical provider risk sharing such as capitation.

Your notion of buy-in to a Medicare Advantage approach is intriguing, but given what Medicare pays providers under these programs, huge resistance by the medical community would ensue with the results determined by political logic, not the delivery of value to the population. I favor two approaches: development of a local purchasing cooperative (see our work at http://www.foxvalleyhealthcare.com) and the expansion of the federally facilitated exchanges. For the latter to provide affordable, high quality options, the $300+ billion of income tax exemption devoted to subsidizing employer sponsored medical insurance would need to be markedly repurposed to a subsidy inversely related to household income.

Marty Finkler

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