Amazon-Berkshire-JPM healthcare venture picks COO
The Amazon-J.P. Morgan-Berkshire Hathaway venture aimed at lowering employee health costs tapped its second major player this week: Jack Stoddard, former general manager for digital health at Comcast, will serve as chief operations officer. His first day on the job was Tuesday.
Stoddard helped found Comcast Ventures-backed start-up Accolade, an on-demand navigator meant to expand employee access to inexpensive medical care. The Harvard MBA grad spent eight years as its COO and chief strategy officer.
Stoddard also hails from UnitedHealth. He was a member of the team that created data analytics and claims processing engine Optum, a vertical arm of UnitedHealth that accounted for 44% of its parent company's profits in 2017.
Stoddard is Atul Gawande's first publicized hire as CEO of the still-unnamed venture as it builds out its executive suite.
The three powerhouse companies announced in late January formation of an independent entity to take on the healthcare needs of their combined 1.2 million U.S. employees, free from any "profit-making incentives and constraints." Though the lack of concrete detail invited skepticism from critics, the foray alone may be welcomed by weary consumers facing mounting costs and obfuscation from providers, big pharma and others.
Since about half of Americans get coverage through their job, employers are a potential locus for meaningful change. Employer healthcare costs are increasing at an average of 3% per year, and some big names have begun taking steps to tamp that down.
Comcast, for example, has only seen minimal yearly cost increases of about 1% in the past five years. The nation's largest cable company eschewed traditional methods of cost containment such as high-deductible health plans, lowering its average deductible to $250 and collating its own portfolio of outside companies to contract with (such as Accolade). The company's relatively flat cost increases stands starkly juxtaposed with the fifth of the nation's big companies that labor under annual cost increases of more than 10%, according to benefits consultancy Mercer.
Direct contracting continues to trend as companies step up their cost management strategies and replace the traditional employer-insurer-provider model with an employer-provider relationship. Stoddard’s inclusion in the Amazon-JP Morgan-Berkshire Hathaway undertaking puts even more focus on that route.
The new company seeks "high-quality and transparent healthcare at a reasonable cost," according to the original announcement. "We will be using top management, big data, virtual technology, better customer engagement and the improved creation of customer choice," J.P. Morgan CEO Jamie Dimon wrote in his annual letter to shareholders in April.
Top brass isn't afraid to break the status quo — clear in their non-traditional pick of New Yorker staff writer and surgeon Gawande as CEO. Reaction was mixed, with some industry leaders heralding the choice as innovative and inspired and others acerbically pointing out Gawande's lack of a managerial background.
Gawande was named in June and started in July, when he kicked off the search for his C-suite that is now bearing first fruit with Stoddard. According to his LinkedIn, Stoddard also serves on the board of directors for NovaSom, a home sleep apnea testing company, and Carrot, which aims to help people quit smoking.
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