7 ms·

Amazon, Berkshire Hathaway, JPMorgan End Health-Care Venture Haven

97 points by jweir 6y ago

DIVx0 6y ago
I'd be curious to know some more details. The article says turnover was a problem at all levels, but why? I am in this same industry and I'm really interested to learn what a massively well connected and funded startup discovered that made it better to toss in the towel.
- djohnston 6y ago
  Admittedtly without evidence, I would speculate that they ran up against institutional players who had better lobbying power for this industry. There is no technical limitation to explain why our healthcare system sucks, it's some crazy combination of inefficient policies, beaurocracies, and established parties who benefit from the preceding two. But agreed, would love to see more.
  - toomuchtodo 6y ago
    Turns out you need to fix the laws around healthcare to fix healthcare. https://www.congress.gov/bill/116th-congress/senate-bill/1129/text https://www.congress.gov/bill/116th-congress/senate-bill/112...
    - specialist 6y ago
      It's almost as if Freedom Markets™ would benefit from clear rules, professional administration, and fair & impartial referees.
      - Red_Leaves_Flyy 6y ago
        The laws that incumbents write for their industries encourage extractive pricing models while discouraging competition and innovation.
  - supertrope 6y ago
    "It is difficult to get a man to understand something, when his salary depends on his not understanding it." - Upton Sinclair There's no single institution or person holding us back. Real life isn't a movie with a villain who can be defeated and then we live happily ever after. There's no magic HealthBot 3000 technology that will deliver a breakthrough in curing disease and injury, and/or disrupt current business models. Hospitals don't want to lose revenue. Physicians who don't want to lose revenue and turf. Drugmakers don't want to lose revenue. Health insurance. Patients refuse to opt into* any limits on care, demand nearly perfectly safe drugs, and say they only want the best care. We want to see our doctor over a cold and demand a pharmaceutical solution. We get annoyed when doc tells us to lose weight or quit smoking/drinking. We cannot accept death or taxes. "We have met the enemy and he is us." - Walt Kelly. The only deflationary force in the industry is have nots avoiding care at significant cost to life and limb. *Even relatively comfortable employer plans and Medicare have significant gatekeeping: "out of network," deductibles, what procedures and drugs are not covered.
    - phobosanomaly 6y ago
      Quick background on the great Walt Kelly quote, with images of the comic strip in which it was used. https://library.osu.edu/site/40stories/2020/01/05/we-have-met-the-enemy/ https://library.osu.edu/site/40stories/2020/01/05/we-have-me...
    - _lazlo 6y ago
      A good start would be to end the need for medical licensing. It creates an artificially low supply of doctors thus increased costs. Before medical licensing there were more breakthroughs and competition.
      - r00fus 6y ago
        How would you know if your doctor wasn’t a fraud?
        theptip 6y ago
        Milton Friedman covers this in detail in “Capitalism and Freedom” if you want the full Libertarin justification, but the short answer is 1) voluntary certification, or 2) market reputation, or 3) threat of enforcement of anti-fraud laws that are less specific than licensure requirements. The general idea being that it is seldom a good thing to remove cheap options (eg forcing poor people to go bankrupt instead of letting them choose worse care), and licensure both sets a quality floor, and also artificially restricts supply. I think for life-and-death things like medicine this idea breaks down a bit, but that’s the end of the spectrum and how it’s argued as far as I’ve seen.
  - 2OEH8eoCRo0 6y ago
    Everyone wants it fixed but nobody wants to lose money.
- ProAm 6y ago
  I dont think they are throwing in the towel, I think they are all going about it on their own to capture more of the low hanging profit? > One key issue facing Haven was that while the firm came up with ideas, each of the three founding companies executed their own projects separately with their own employees, obviating the need for the joint venture to begin with, according to the people, who declined to be identified speaking about the matter.
  - Technically 6y ago
    Maybe we've reached the point where startups are just really expensive spikes.
- rmrfstar 6y ago
  This is probably an indicator that outside counsel is saying "antitrust might be a real thing again, why don't you lower your profile a smidge." Nothing says "cartel" louder than a "joint venture" comprised of 3 companies with $2.5 trillion in market capitalization.
boulos 6y ago
https://www.cnbc.com/2021/01/04/haven-the-amazon-berkshire-jpmorgan-venture-to-disrupt-healthcare-is-disbanding-after-3-years.html https://www.cnbc.com/2021/01/04/haven-the-amazon-berkshire-j... seems to have more background (and claims to be the original scoop)
- dang 6y ago
  Ok, changed from https://www.wsj.com/articles/amazon-berkshire-hathaway-jpmorgan-end-health-care-venture-haven-11609784367 https://www.wsj.com/articles/amazon-berkshire-hathaway-jpmor.... Thanks!
superfrank 6y ago
For anyone wanting a short summary, these two excerpts pretty much summarize the entire situation: > One key issue facing Haven was that each of the three founding companies executed their own projects separately with their own employees, obviating the need for the joint venture to begin with > Many of the Boston-based firm’s 57 workers are expected to be placed at Amazon, Berkshire Hathaway or JPMorgan Chase as the firms each individually push forward in their efforts, and the three companies are still expected to collaborate informally on health-care projects Seems like a non-story, IMO
- incongruity 6y ago
  When three of the biggest names in America’s economy try to combine forces to upend another sector of the economy, that’s definitely news. When it fails, it’s even more so.
- foobarbazetc 6y ago
  How is it a non-story? Imagine how much money was spent on this thing, plus the copious write ups in Axios etc. They failed. The rest is noise. What do you think they’re “collaborating” on now that this JV is wound down? What’s a “health care project” in the context of JPMorgan? Employees still have normal group health insurance with normal healthcare delivery.
  - superfrank 6y ago
    It's a non-story for three reasons, IMO. 1) All three companies are still working on health care projects on their own and it sounds like most of the Haven employees are being offered positions on one of those continuing teams. 2) While it's could just be press release talk, but they claim they will still collaborate in an informal matter. 3) The three companies combined have almost 1.5 million employees. This entire venture consisted of 57 people. Even for the smallest of the three companies (JPM) this Haven was just a drop in the bucket. I've personally worked at much smaller companies that pissed away far more resources and no one gave a shit. The idea is still valid, each company is still sees value in the space, there was no major falling out between the companies, and the number of employees affected in a negative way is negligible. This is basically an organizational restructuring. Total non-story, IMO.
m16ghost 6y ago
Healthcare in the United States is complicated with lots of different players. The article seems to hint at a key issue they faced: >But insiders claim that it will allow the founding companies to implement ideas from the project on their own, tailoring them to the specific needs of their employees, who are mostly concentrated in different cities. Medical services is mostly a localized service, so each city is its own individual market. As large as Amazon, JPMorgan, and Berkshire are, their employees are spread out geographically, and even in their headquarter cities, they do not represent a significant number of people negotiating for medical services. Without a way to control the actual medical service supply (i.e. doctors and hospitals), their programs will have to negotiate at market rates, meaning there really is no way to achieve significant savings. Amazon released their pill pack service, which helps because drugs can be shipped across the country, so there are efficiencies to be gained there. However, drug costs are still a smaller percentage of overall costs [0], albeit growing. [0]https://www.ama-assn.org/about/research/trends-health-care-spending https://www.ama-assn.org/about/research/trends-health-care-s...
- 374733636373384 6y ago
  I wonder what the costs/benefits of tele-medicine are like right now. It seems like for certain services like gp visits you could just have a location that scans people to create high detail models for a remote doctor to review during a live call while locally situated support staff handle things like collecting blood, fluids, etc. and feeling for lumps. Probably not ideal for a small practice but if you have a pool of 100,000 employees it seems plausible that you could realize some savings.
- macjohnmcc 6y ago
  I priced Amazon's prescription drug service and it estimated I would be paying my co-pay on each of the drugs. Sounds good if you usually go to CVS but at Walmart I get the four prescriptions I get for $26-30.
  - redis_mlc 6y ago
    You might want to look into why exactly you're on 4 prescriptions. Doesn't sound like a good thing. It's important to be or have a health-care advocate.
mchusma 6y ago
I keep hoping that someone makes a run at the most obvious health care need: a consumer centric medical record that you control with automated diagnosis engine. Diagnosis is fundamentally an information problem, so should be zero marginal cost. Generic drugs have near zero marginal costs, so the idea that most healthcare needs to be expensive is incorrect from first principles. I think if this is impossible in the US due to regulations, surely there are some countries that would allow it?
- srockets 6y ago
  Unlike commodities, there is no upper bound on the utility of health: people would pay as much as they can afford to have their health. Hence there's no rational (as we define the term in economic theories) reason to aim for lower prices, regardless of costs.
- mola 6y ago
  A lot of places in the world get healthcare right. The us is failing miserably to provide its citizens with affordable healthcare. And they are actively trying to export their failed system. Too bad they're also top rate marketers.
dave_aiello 6y ago
My wife is a provider in the health care industry who is licensed to provide primary care in two different states. I pay close attention to the industry, and how it functions locally, regionally, and nationally. The best model I've found for trying to understand health care is the Tri-dimensional Chess game that is a recurring prop in Star Trek The Original Series, https://en.wikipedia.org/wiki/Three-dimensional_chess#Star_Trek_Tri-Dimensional_Chess https://en.wikipedia.org/wiki/Three-dimensional_chess#Star_T.... Different arrangements and alignments of chess boards exist in each regional market in the United States, with the chess boards representing integrated health care systems, city, county, or state-owned hospitals and care facilities, and public and private hospital groups. As the Wikipedia article suggests, careful observation of Star Trek TOS episodes shows "boards are sometimes not even aligned consistently from one scene to the next within a single episode." This is akin to different dominant health care systems co-existing in the Philadelphia area, in Central New Jersey, in the western part of northern New Jersey, in the eastern part of northern New Jersey, and in several different areas in Downstate New York. In addition to these existing realities, in certain cases two dominant health care entities from adjacent areas collaborate to deliver services in certain hospitals and practices in areas where their respective markets meet each other. Creating a business at scale that would be disruptive across multiple regional markets even within a 100 to 200-mile radius in certain parts of the U.S. would be extremely difficult.
JoeAltmaier 6y ago
Reminds me of when 3 big players decided to produce a unified Unix. Day came for announcements - each advertised their own proprietary extensions, making them just '3 new versions of Unix'. Of course they did - that's how business works. For-profit entities are not going to function as standards bodies. They cannot. Anyway, probably unrelated but another anecdote about 'big companies can't get along'
kmerroll 6y ago
Being pretty deep in the US industrial healthcare complex it's not surprising to see the Haven partners break off on their own after three years. I would suggest this reflects the complexity of our current healthcare delivery system and also the misalignment between the shorter technology cycles and the far longer cycles of foundational changes in healthcare. Would Haven have succeed with more time? I would say the actual question was what could Haven achieved in only three years? Have to admit this is sad news as the promise of Haven was a possibly significant challenge to the current, awful, state of healthcare in the US and offer a commercial single-payer solution that would avoid the entrenched political agendas driving the public option discussion. Lastly, I feel Amazon missed a huge opportunity here with their massive technical capability combined with the insurance and financial capabilities of their partners. Creating a vertical integrated health system isn't new, but the capabilities of Haven were significant. Sadly, seems like the Amazon Health strategy was limited.
- foxtr0t 6y ago
  I have a similar but slightly different take. Though it was announced with tons of media hype and attention, this project seemed doomed to fail from the outset. Amazon, JP Morgan, BH may be giants in their own industries, but they're relative outsiders to the healthcare industry. We aren't used to seeing Amazon flop like this, so when it was announced, I think people expected that it would succeed. I think they're finding the limits of their long term strategy. Ultimately, Amazon is a supply chain, logistics, and tech company. JP Morgan Chase is an investment bank and services co, and BH is a holding company. IMO if they're really keen on upending the healthcare industry, they'd need to involve an industry player like Kaiser, who have existing infrastructure stood up and tons of relevant expertise.

97 points by jweir 6y ago

I'd be curious to know some more details. The article says turnover was a problem at all levels, but why? I am in this same industry and I'm really interested to learn what a massively well connected and funded startup discovered that made it better to toss in the towel.

djohnston 6y ago
Admittedtly without evidence, I would speculate that they ran up against institutional players who had better lobbying power for this industry. There is no technical limitation to explain why our healthcare system sucks, it's some crazy combination of inefficient policies, beaurocracies, and established parties who benefit from the preceding two. But agreed, would love to see more.
- toomuchtodo 6y ago
  Turns out you need to fix the laws around healthcare to fix healthcare. https://www.congress.gov/bill/116th-congress/senate-bill/1129/text https://www.congress.gov/bill/116th-congress/senate-bill/112...
  - specialist 6y ago
    It's almost as if Freedom Markets™ would benefit from clear rules, professional administration, and fair & impartial referees.
    - Red_Leaves_Flyy 6y ago
      The laws that incumbents write for their industries encourage extractive pricing models while discouraging competition and innovation.
- supertrope 6y ago
  "It is difficult to get a man to understand something, when his salary depends on his not understanding it." - Upton Sinclair There's no single institution or person holding us back. Real life isn't a movie with a villain who can be defeated and then we live happily ever after. There's no magic HealthBot 3000 technology that will deliver a breakthrough in curing disease and injury, and/or disrupt current business models. Hospitals don't want to lose revenue. Physicians who don't want to lose revenue and turf. Drugmakers don't want to lose revenue. Health insurance. Patients refuse to opt into* any limits on care, demand nearly perfectly safe drugs, and say they only want the best care. We want to see our doctor over a cold and demand a pharmaceutical solution. We get annoyed when doc tells us to lose weight or quit smoking/drinking. We cannot accept death or taxes. "We have met the enemy and he is us." - Walt Kelly. The only deflationary force in the industry is have nots avoiding care at significant cost to life and limb. *Even relatively comfortable employer plans and Medicare have significant gatekeeping: "out of network," deductibles, what procedures and drugs are not covered.
  - phobosanomaly 6y ago
    Quick background on the great Walt Kelly quote, with images of the comic strip in which it was used. https://library.osu.edu/site/40stories/2020/01/05/we-have-met-the-enemy/ https://library.osu.edu/site/40stories/2020/01/05/we-have-me...
  - _lazlo 6y ago
    A good start would be to end the need for medical licensing. It creates an artificially low supply of doctors thus increased costs. Before medical licensing there were more breakthroughs and competition.
    - r00fus 6y ago
      How would you know if your doctor wasn’t a fraud?
      - theptip 6y ago
        Milton Friedman covers this in detail in “Capitalism and Freedom” if you want the full Libertarin justification, but the short answer is 1) voluntary certification, or 2) market reputation, or 3) threat of enforcement of anti-fraud laws that are less specific than licensure requirements. The general idea being that it is seldom a good thing to remove cheap options (eg forcing poor people to go bankrupt instead of letting them choose worse care), and licensure both sets a quality floor, and also artificially restricts supply. I think for life-and-death things like medicine this idea breaks down a bit, but that’s the end of the spectrum and how it’s argued as far as I’ve seen.
- 2OEH8eoCRo0 6y ago
  Everyone wants it fixed but nobody wants to lose money.
ProAm 6y ago
I dont think they are throwing in the towel, I think they are all going about it on their own to capture more of the low hanging profit? > One key issue facing Haven was that while the firm came up with ideas, each of the three founding companies executed their own projects separately with their own employees, obviating the need for the joint venture to begin with, according to the people, who declined to be identified speaking about the matter.
- Technically 6y ago
  Maybe we've reached the point where startups are just really expensive spikes.
rmrfstar 6y ago
This is probably an indicator that outside counsel is saying "antitrust might be a real thing again, why don't you lower your profile a smidge." Nothing says "cartel" louder than a "joint venture" comprised of 3 companies with $2.5 trillion in market capitalization.

boulos 6y ago

https://www.cnbc.com/2021/01/04/haven-the-amazon-berkshire-jpmorgan-venture-to-disrupt-healthcare-is-disbanding-after-3-years.html https://www.cnbc.com/2021/01/04/haven-the-amazon-berkshire-j... seems to have more background (and claims to be the original scoop)

dang 6y ago
Ok, changed from https://www.wsj.com/articles/amazon-berkshire-hathaway-jpmorgan-end-health-care-venture-haven-11609784367 https://www.wsj.com/articles/amazon-berkshire-hathaway-jpmor.... Thanks!

superfrank 6y ago

For anyone wanting a short summary, these two excerpts pretty much summarize the entire situation: > One key issue facing Haven was that each of the three founding companies executed their own projects separately with their own employees, obviating the need for the joint venture to begin with > Many of the Boston-based firm’s 57 workers are expected to be placed at Amazon, Berkshire Hathaway or JPMorgan Chase as the firms each individually push forward in their efforts, and the three companies are still expected to collaborate informally on health-care projects Seems like a non-story, IMO

incongruity 6y ago
When three of the biggest names in America’s economy try to combine forces to upend another sector of the economy, that’s definitely news. When it fails, it’s even more so.
foobarbazetc 6y ago
How is it a non-story? Imagine how much money was spent on this thing, plus the copious write ups in Axios etc. They failed. The rest is noise. What do you think they’re “collaborating” on now that this JV is wound down? What’s a “health care project” in the context of JPMorgan? Employees still have normal group health insurance with normal healthcare delivery.
- superfrank 6y ago
  It's a non-story for three reasons, IMO. 1) All three companies are still working on health care projects on their own and it sounds like most of the Haven employees are being offered positions on one of those continuing teams. 2) While it's could just be press release talk, but they claim they will still collaborate in an informal matter. 3) The three companies combined have almost 1.5 million employees. This entire venture consisted of 57 people. Even for the smallest of the three companies (JPM) this Haven was just a drop in the bucket. I've personally worked at much smaller companies that pissed away far more resources and no one gave a shit. The idea is still valid, each company is still sees value in the space, there was no major falling out between the companies, and the number of employees affected in a negative way is negligible. This is basically an organizational restructuring. Total non-story, IMO.

m16ghost 6y ago

Healthcare in the United States is complicated with lots of different players. The article seems to hint at a key issue they faced: >But insiders claim that it will allow the founding companies to implement ideas from the project on their own, tailoring them to the specific needs of their employees, who are mostly concentrated in different cities. Medical services is mostly a localized service, so each city is its own individual market. As large as Amazon, JPMorgan, and Berkshire are, their employees are spread out geographically, and even in their headquarter cities, they do not represent a significant number of people negotiating for medical services. Without a way to control the actual medical service supply (i.e. doctors and hospitals), their programs will have to negotiate at market rates, meaning there really is no way to achieve significant savings. Amazon released their pill pack service, which helps because drugs can be shipped across the country, so there are efficiencies to be gained there. However, drug costs are still a smaller percentage of overall costs [0], albeit growing. [0]https://www.ama-assn.org/about/research/trends-health-care-spending https://www.ama-assn.org/about/research/trends-health-care-s...

374733636373384 6y ago
I wonder what the costs/benefits of tele-medicine are like right now. It seems like for certain services like gp visits you could just have a location that scans people to create high detail models for a remote doctor to review during a live call while locally situated support staff handle things like collecting blood, fluids, etc. and feeling for lumps. Probably not ideal for a small practice but if you have a pool of 100,000 employees it seems plausible that you could realize some savings.
macjohnmcc 6y ago
I priced Amazon's prescription drug service and it estimated I would be paying my co-pay on each of the drugs. Sounds good if you usually go to CVS but at Walmart I get the four prescriptions I get for $26-30.
- redis_mlc 6y ago
  You might want to look into why exactly you're on 4 prescriptions. Doesn't sound like a good thing. It's important to be or have a health-care advocate.

mchusma 6y ago

I keep hoping that someone makes a run at the most obvious health care need: a consumer centric medical record that you control with automated diagnosis engine. Diagnosis is fundamentally an information problem, so should be zero marginal cost. Generic drugs have near zero marginal costs, so the idea that most healthcare needs to be expensive is incorrect from first principles. I think if this is impossible in the US due to regulations, surely there are some countries that would allow it?

srockets 6y ago
Unlike commodities, there is no upper bound on the utility of health: people would pay as much as they can afford to have their health. Hence there's no rational (as we define the term in economic theories) reason to aim for lower prices, regardless of costs.
mola 6y ago
A lot of places in the world get healthcare right. The us is failing miserably to provide its citizens with affordable healthcare. And they are actively trying to export their failed system. Too bad they're also top rate marketers.

dave_aiello 6y ago

My wife is a provider in the health care industry who is licensed to provide primary care in two different states. I pay close attention to the industry, and how it functions locally, regionally, and nationally. The best model I've found for trying to understand health care is the Tri-dimensional Chess game that is a recurring prop in Star Trek The Original Series, https://en.wikipedia.org/wiki/Three-dimensional_chess#Star_Trek_Tri-Dimensional_Chess https://en.wikipedia.org/wiki/Three-dimensional_chess#Star_T.... Different arrangements and alignments of chess boards exist in each regional market in the United States, with the chess boards representing integrated health care systems, city, county, or state-owned hospitals and care facilities, and public and private hospital groups. As the Wikipedia article suggests, careful observation of Star Trek TOS episodes shows "boards are sometimes not even aligned consistently from one scene to the next within a single episode." This is akin to different dominant health care systems co-existing in the Philadelphia area, in Central New Jersey, in the western part of northern New Jersey, in the eastern part of northern New Jersey, and in several different areas in Downstate New York. In addition to these existing realities, in certain cases two dominant health care entities from adjacent areas collaborate to deliver services in certain hospitals and practices in areas where their respective markets meet each other. Creating a business at scale that would be disruptive across multiple regional markets even within a 100 to 200-mile radius in certain parts of the U.S. would be extremely difficult.

JoeAltmaier 6y ago

Reminds me of when 3 big players decided to produce a unified Unix. Day came for announcements - each advertised their own proprietary extensions, making them just '3 new versions of Unix'. Of course they did - that's how business works. For-profit entities are not going to function as standards bodies. They cannot. Anyway, probably unrelated but another anecdote about 'big companies can't get along'

kmerroll 6y ago

Being pretty deep in the US industrial healthcare complex it's not surprising to see the Haven partners break off on their own after three years. I would suggest this reflects the complexity of our current healthcare delivery system and also the misalignment between the shorter technology cycles and the far longer cycles of foundational changes in healthcare. Would Haven have succeed with more time? I would say the actual question was what could Haven achieved in only three years? Have to admit this is sad news as the promise of Haven was a possibly significant challenge to the current, awful, state of healthcare in the US and offer a commercial single-payer solution that would avoid the entrenched political agendas driving the public option discussion. Lastly, I feel Amazon missed a huge opportunity here with their massive technical capability combined with the insurance and financial capabilities of their partners. Creating a vertical integrated health system isn't new, but the capabilities of Haven were significant. Sadly, seems like the Amazon Health strategy was limited.

foxtr0t 6y ago
I have a similar but slightly different take. Though it was announced with tons of media hype and attention, this project seemed doomed to fail from the outset. Amazon, JP Morgan, BH may be giants in their own industries, but they're relative outsiders to the healthcare industry. We aren't used to seeing Amazon flop like this, so when it was announced, I think people expected that it would succeed. I think they're finding the limits of their long term strategy. Ultimately, Amazon is a supply chain, logistics, and tech company. JP Morgan Chase is an investment bank and services co, and BH is a holding company. IMO if they're really keen on upending the healthcare industry, they'd need to involve an industry player like Kaiser, who have existing infrastructure stood up and tons of relevant expertise.