- Haven, the high-profile, secretive venture to lower healthcare costs backed by Amazon, J.P. Morgan and Berkshire Hathaway, is suspending operations in February after three years, the company announced Monday.
- Haven caused waves when it launched in 2018, with a lineup of notable hires from within the healthcare industry. However, the nonprofit, independent company is now closing with little concrete to show, hinting at the difficulty of reforming the complex insurance system and curbing rising costs in the deeply entrenched healthcare industry.
- Haven said in a statement on its website that Amazon, J.P. Morgan and Berkshire Hathaway would use the information it gained moving forward and continue working to create programs addressing the health needs of their combined 1.2 million employees. Shares of major U.S. insurers got a bump in Monday trading following the news, with UnitedHealthcare and Humana each climbing more than 2% since noon.
J.P. Morgan, Amazon and Berkshire Hathaway announced Haven in January 2018 to significant fanfare, with some industry watchers forecasting the significant heft and deep pocketbooks of the three companies combined might move the needle on lowering skyrocketing healthcare costs.
The tie-up caused stocks in insurers and other major healthcare companies to plummet amid fears of disruption. The Boston-based venture hired an impressive lineup of executives, including noted surgeon and New Yorker author Atul Gawande as CEO, and appeared in a strong position to try to enact change.
However, despite its ambitious beginnings, the venture made little visible signs of progress and shed many members of its C-suite and management team, including Gawande, who departed in May. Amazon and J.P. Morgan did begin offering employees health insurance through Haven in 2019, but that was even in partnership with traditional payers.
"In the past three years, Haven explored a wide range of healthcare solutions, as well as piloted new ways to make primary care easier to access, insurance benefits simpler to understand and easier to use, and prescription drugs more affordable. Moving forward, Amazon, Berkshire Hathaway, and JPMorgan Chase & Co. will leverage these insights and continue to collaborate informally to design programs tailored to address the specific needs of their own employee populations," Haven's website reads.
Haven's almost 60 workers will be shifted into roles at Amazon, J.P. Morgan or Berkshire Hathaway, CNBC, which first broke the news, reported Monday afternoon. Per CNBC, Haven's own initiatives bumped up against internal efforts at its three separate parent companies, failing to reach an overarching vision and not taking priority.
Amazon, for one, has spent the past few years expanding into a variety of health sectors, including cloud computing for healthcare and pharmaceutical companies, telehealth and primary care ventures for its own employees and health tracking wearables.
Some experts say the venture's failure jibes with the known challenges with creating and maintaining effective purchasing coalitions, and getting different companies on the same page when it comes to health programs for a combined employee base. Though Berkshire Hathaway, J.P. Morgan and Amazon have 1.2 million combined employees, that's not as much bargaining power as you'd think to go up against major health plans and hospital systems, experts say. For example, employer-led coalition Pacific Business Group on Health includes roughly 15 million employees across its member companies.
Additionally, healthcare is intrinsically market specific, and Amazon, J.P. Morgan and Berkshire Hathaway are spread out geographically, complicating efforts to find a one-size-fits-all approach to lowering costs.
Haven may have run up against regulations as well, like the new price transparency mandates. Hospitals have to post negotiated rates online in a machine readable format at the start of this year, which may have made it harder for providers to contract with corporations at a rate favorable to them, according to Lyndean Brick, CEO of health consulting firm Advis.
Editor's note: This story has been updated to include further commentary.