JPMorgan Chase on Thursday announced the launch of Morgan Health, a new health care business unit that will be "focused on improving the quality, efficiency, and equity of employer-sponsored health care."
Details on Morgan Health
According to JPMorgan, Morgan Health "will work with a range of health care experts and partners, including provider groups, health plans, employers, and other organizations making health care system improvements."
Initially, Morgan Health will focus on JPMorgan employees and families, but the company said it hopes Morgan Health will be "a model for other employers and will partner with others to broaden its impact."
JPMorgan said Morgan Health will specifically focus on three areas:
- Accelerating health system improvement by investing $250 million in "promising health care solutions and overall system improvements";
- Improving health benefits for JPMorgan employees by working with health care organizations to develop "models for other employers looking to improve health care"; and
- Promoting health care equity in the local community.
Morgan Health will be headquartered in Washington, D.C., and led by Dan Mendelson as CEO. Mendelson is the founder and CEO of Avalere Health, a health care advisory firm.
Jamie Dimon, chair and CEO of JPMorgan, said the United States has "the best health care in the world in terms of doctors, hospitals, pharmaceutical and medical device companies, but we certainly do not have the best outcomes."
The challenges facing the U.S. health care system have lingered for years, Dimon said, but "[t]here are ways we can make significant improvements, and we intend to take a disciplined approach to solving some of these issues in a meaningful way."
Mendelson said JPMorgan has long sought to improve health care for its employees. "We are going to take what we've learned and accelerate health care innovation in the employer-sponsored health care market, partnering with and investing in companies that share our goals, and measuring key health outcomes to show what works."
Will Morgan Health succeed where Haven foundered?
JPMorgan's announcement comes just over three months since Haven Health, JPMorgan's joint health care venture with Berkshire Hathaway and Amazon, which had similar goals to Morgan Health's, announced it would shut down.
"Haven was supposed to show how creativity, ingenuity, and private sector entrepreneurship could beat the health care sector. And it failed," David Blumenthal, a physician and president of The Commonwealth Fund, said.
According to Blumenthal, among the reasons for Haven's struggles is that employers lack sufficient purchasing power to shake up the health care market, especially as health systems continue to consolidate. "In the end, controlling costs in almost every other Western country is a responsibility that government assumes," he said. "It's for precisely this reason that the alternatives are not effective."
But Mendelson argued that Morgan Health will function differently from Haven.
"We don't want to create things from scratch," he said. "We are going to be collaborating with outstanding health care organizations nationally to accomplish our objectives. That's another piece that differentiates this effort from the prior one."
Peter Scher, JPMorgan's vice chair, said the company learned a lot from Haven.
"The work that we did with Haven reinforced both the opportunities and challenges, and we think it was an important step," he said. "If we can capture the innovation happening right now and scale it in a way that benefits our employees and their families, that will be an enormous boost for JPMorgan, and ultimately could be an enormous boost for the country."
"We learned a lot from Haven," Anne Pace, a spokesperson for Morgan Health, added. "To be honest, Morgan Health wouldn't exist if Haven hadn't existed."
Ari Gottlieb, a health care consultant, said Morgan Health's "scope is more narrow," which means there could be "more flexibility in what you can do."
Still, "it's hard to change employee behavior," Gottlieb said. "It's easy to talk about things, and there are a lot of things that conceptually look like they will work but, in practice, tend to have a little bit less of an impact" (Jennings, Forbes, 5/20; Tepper, Modern Healthcare, 5/20; Son, CNBC, 5/20; JPMorgan Chase release, 5/20; Benoit/Mathews, Wall Street Journal, 5/20; Paavola, Becker's Hospital Review, 5/20).