- JPMorgan Chase is launching Morgan Health as a means to boost the quality of healthcare for the bank's 165,000 employees and their families — and to improve health equity and medical cost control, the bank said Thursday.
- The 20-person, Washington, D.C.-based unit will have $250 million to invest in "promising" innovations in employer coverage and pilot programs pushing new benefits, the company said.
- The launch comes four months after Haven, a joint healthcare venture backed by Amazon, Berkshire Hathaway and the bank, announced it was suspending operations after three years.
Morgan Health stands as somewhat of a successor to Haven, and comes as the coronavirus pandemic accelerates industry's focus on leveraging technology to address health equity and the fragmented healthcare delivery system in the U.S., according to Dan Mendelson, the health consultant JPMorgan hired to lead Morgan Health.
"Haven helped us focus on digital tools and analytics that will really be core to a lot of the things that we will be deploying and experimenting with," Mendelson told the Financial Times.
JPMorgan may be forging ahead without its Haven cohorts Amazon and Berkshire Hathaway, but it is by no means going it alone. The new unit plans to partner with a range of health organizations, including providers, payers and other employers.
"Everything we do, we expect to be doing in partnership with other organizations," Mendelson told CNBC. "We're not looking to build tools and technologies from scratch, but rather to deploy the best in healthcare to work for us."
One notable partner is retail pharmacy and payer juggernaut CVS Health. Neither company disclosed the role CVS will play in the partnership, but CVS CEO Karen Lynch said in a statement the company is "looking forward to working with Morgan Health" and improving healthcare for employers.
Such partnerships with entrenched healthcare players are important for companies looking to curb the rising cost of care for their employees. Healthcare is an infamously difficult sector to disrupt from the outside, with Haven perhaps being the most recent high-profile example of how even the biggest and wealthiest corporations can fail when they attempt to revamp the country's insurance chassis without a clear vision.
Morgan Health will first focus on its own employee population, then plans to branch its model out to other employers and look for other avenues to expand its impact, the release says.
The bank looks to improve the way primary care is delivered and to boost patients' ability to navigate their own care. Specifically, Morgan Health will focus on preventative care in maternal health, cardiovascular disease and diabetes, Mendelson said.
Mendelson has served as an operating partner at private equity firm Welsh, Carson, Anderson & Stowe, previously founded the consultancy Avalere Health, and worked on the health budget during the Clinton administration with the Office of Management and Budget. He'll report to Peter Scher, JPMorgan's vice chairman.
Morgan Health's results will fall under the bank's corporate reporting line, rather than among one of JPMorgan's four main revenue-generating divisions. But making a profit is not the goal of the new venture, Scher said. Rather, the most crucial benefit might be the public good.
"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," Scher told CNBC.
JPMorgan Chase CEO Jamie Dimon reinforced that notion in a statement Thursday.
"We have the best healthcare in the world in terms of doctors, hospitals, pharmaceutical and medical device companies, but we certainly do not have the best outcomes," Dimon said. "There 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."
Looking to the future, Scher, too, called Haven an "important step" in the evolution of JPMorgan's healthcare mission.
"The work that we did with Haven reinforced both the opportunities and challenges [inherent in the field]," he said.