Haven 101: What we know about the Amazon-Berkshire-JPMorgan joint venture so far

By Jackie Kimmell, Senior Analyst

The announcement last January that Amazon, Berkshire Hathaway and JPMorgan Chase were combining forces to improve health care for their employees sent shock waves through the health care markets. That day, shares of CVS dropped 4.1%, Walgreens by 5.2%, and Express Scripts by 3.2%, and a flurry of health care experts quickly proclaimed either complete skepticism or enthusiasm about the joint venture's prospects.

Now, just over a year later, we know the venture's name—Haven—and leader—well-known surgeon and thought leader Atul Gawande, but little else. And time appears to have diminished the industry's excitement; Venrock's 2019 survey of over 250 industry stakeholders found that only 9% of respondents were confident in the venture's success, down from 27% in 2018. 

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But could the work happening behind-the-scenes tell us more about the what the companies are planning? Below we answer six pressing questions that shine a little more light on the Haven venture.

  1. Who has Haven hired?

    The team behind Haven is impressive, built from heavyweights across the industry. In addition to Gawande, Haven's leadership team includes:

    • Serkan Kutan, the former CTO of ZocDoc, an online system for doctor booking, who is the CTO;
    • Dana Safran, the former senior VP for performance management and improvement at Blue Cross Blue Shield of Massachusetts, who is head of measurement;
    • David Smith, a former VP of Optum*, who will work on "strategy and research" at the venture;
    • Jack Stoddard, the former general manager of digital health at Comcast, who is the COO;
    • Brooke Thurston, a former VP of communications for Seward Health Care, who is head of communications; and
    • Sandhya Rao, the former senior medical director for Partners Population Health, who is the VP of clinical strategy.

    Meanwhile, the board of Haven will include:

    • Ted Combs, an investment officer of Berkshire Hathaway;
    • Jamie Dimon, CEO and Chair of JPMorgan Chase;
    • Beth Galetti, a senior VP at Amazon; and
    • Gawande, Haven's CEO.

    Trevor Price, founder and CEO of health-tech recruiting firm Oxeon Partners, told CNBC News' Christinia Farr that the hires, in sum, these hires indicate Haven wants to build a "risk-based clinically integrated network," or a network of doctors selected based on their performance and costs. He said Haven could then use this network to direct employees to the most appropriate type of care for their condition—steering them away from higher cost or lower quality providers.

    Price added that Stoddard, who served as COO at the digital health company Accolade, and Rao, who helped build out value-based payment as part of Partner's ACO, are both interesting hires that suggest Haven may aim to contract directly with providers and pay them based on value rather than fee-for-service.

    The impressive group also suggests that the venture has big plans, as members would have been unlikely to leave their former posts if the venture didn't have grand ambitions. Kutan, the CTO, noted in a LinkedIn post that the position was his "dream job" and "the most promising attempt to improve health care in the U.S."

    Still, it's worth noting that Gawande, at least, has not switched over to the venture full-time. Most other employees seem to have recently, but their LinkedIn profiles show that many still hold board positions, as well as advisory, consulting and other roles in addition to their work with Haven. 

  2. What does the name Haven signify?

    The company's website, unveiled in early March, explains that they chose the name Haven to "reflect our goal to be a partner to individuals and families and help them get the care they need, while also working with clinicians and others to make the overall system better for all."

    In a Q&A page on the site, the company stresses that it's not looking to "replace existing doctors or instance companies," but is "interested in working with clinicians and insurance companies to improve the overall health care system," and serve as an "ally of anyone who is working to make health care better for patients."

    This seems to reflect that, despite the rhetoric of its founders that the health care system is broken, the company wants to frame itself as a partner to the industry and a "haven" for collaboration, instead of a threat or competition. Not that the company is ruling out that possibility entirely. In newly unsealed court testimony, Stoddard emphasized that the venture does not have (and is not currently planning to create) any health care products, and is looking for partners that could provide them. But, he warned, if Haven can't find them through partnerships, it may have to build them.

  3. What aspects of health care will Haven focus on?

    The company's website states that it will pursue both "common-sense fixes" and "innovative approaches" to address several issues in the health care industry. For example, the website states the company wants to make:

    • " Primary care easier to access";
    • "Insurance benefits simpler to understand and easier to use"; and
    • "Prescription drugs more affordable."

    The fact that the venture has cited these three focus areas indicates that it will focus on making care easier, more clear, and cheaper for its own employees, before seeking to address the more systemic issues of the health care system. Dimon last year in a letter to stakeholders suggested the company could eventually address other issues like fraud, end-of-life care, and specialty treatments.

    The company's leaders also plan to collect and analyze data to further shape their focus areas. Gawande has made it a priority to travel the country listening to the employees the venture will serve, while Stoddard said in testimony that his first step will be to analyze (presumably employee) data to "understand where there's variation in care, quality, where prices don't match value, where doctors are performing."

  4. Which industry stakeholders will the venture affect most?

    Based on the three priorities outlined above, it seems like prescription drug companies, health plans, and employee benefit managers stand to be the most affected by the venture's early work.

    It's not yet clear how Haven plans to go about lowering prescription drug costs for the companies' 1.2 million employees, but earlier this year Dimon held a dinner in January with pharmaceutical executives at which he urged attendees to lower prices. Perhaps, with Haven's high-level industry ties (and the momentum from Congress and President Trump on the same issue) the venture may be able to make inroads.  Another option they could pursue is to follow hospital-led venture Civica Rx in pushing generic drugs and cutting out the middlemen in distribution.

    Health plans and employee benefit managers are another clear target. Dimon and Buffet have both said that current employer health care costs are unsustainable and will become "a huge impediment to American businesses over the next 50 years." Therefore, they seem to want to find fundamentally different way to deliver employee benefits. Stoddard said in testimony that the venture is trying to see if it can "reinvent what insurance looks like in terms of benefit design"– a move unlikely to have much of an impact on insurers with these 1.2 million employees alone, but which could have an impact if it inspires other executives to do the same.

    So far, it seems to—at least—have started a conversation. At a panel at JP Morgan's conference, Eli Lily CEO Dave Ricks seemed inspired by the companies' push into the space. He said that senior leaders are not typically involved in crafting employee's benefits plans, but, after speaking to Dimon, "I think corporate America can lead."

  5. How will the venture be financed?

    On its website, Haven stresses that it's "free from profit-making incentives" and focused on "creating value for families, not shareholders." The company said it will "reinvest any surplus back into our work to improve health outcomes, patient satisfaction, and lower costs for individuals and families."

    The company will receive "resources" and backing from the three founding companies, though the amount each will contribute is still unclear. Given that the companies collectively spend around $4 billion annually on employee health care costs, it's certainly likely they'll be willing to invest heavily in funding the venture.

  6. When should we expect them to do something concrete?

    Now that most of the leadership team has been selected and has come on board (most of them in the past few months), it seems like Haven is finally positioned to work in earnest on its efforts. But many of its leaders have cautioned against looking at what the company does in the day-to-day (or month-to-month), and instead, are touting the venture as a long-term investment. Dimon in January said the venture "is a long-term view. We don't expect any announcement anytime soon," he said. "We will share if we come up with anything good, but we want to start small. Test a bunch of different things."

    Gawande's CEO message emphasizes a similar message, stating, "[W]e will insure our work has high impact and is sustainable… We are committed to do this work for the long-term." The crux is: backed with resources from three of the largest companies in the world, Haven has the ability to move slowly and deliberately. Free from shareholder pressure or fast-moving start-up mentality, it seems focused on testing ideas with its 1.2 million employees before, "in time…" sharing their "innovations and solutions to help others."

Make sure you join us on June 5th to learn more about what Amazon is doing in health care. We'll cover the five main areas Amazon wants to have an impact—and what your organization should be doing to prepare.

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Haven is just one of the emerging companies seeking disruptive solutions to bend the health care spending curve. To learn more about other disruptors, and get must-know insights on how your organization should respond, view our summary of the 15 Things CEOs Need to Know in 2019.

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*Daily Briefing is published by Advisory Board, a division of Optum, which is a wholly owned subsidiary of UnitedHealth Group.


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