Haven Health closes its doors
Today’s Managing Health Care Costs Number is 3
We got the news this week that Haven Health, the joint venture of Amazon, Berkshire Hathaway, and JP Morgan Chase, is being disbanded this month. It’s not a surprise at this point, CEO Atul Gawande left his day-to-day role this spring, and executives have been leaving the organization for months. Haven helped design some health plans for JPMC, and did a considerable amount of data analytics, but it certainly hasn’t disrupted the marketplace.
I was enthusiastic about Haven’s chances of making a real difference in 2018 - here’s a link to my blog post with (unsolicited) advice for Haven from June, 2018. I wasn’t alone - the stock prices of health plans and PBMs sunk when Haven was announced, and rose with Haven’s failure.
Haven was famously secretive, and I don’t have an inside source, but here are a few thoughts:
It’s hard to get three different employers to agree on uniform strategy and tactics. Each employer has different business issues and different cycles, and each has an existing strategy which is hard to upend, and existing benefits staff who are at best ambivalent about being disrupted.
Haven did not notch early wins. Change is difficult; there are generally winners and losers, and Prospect Theory (part of behavioral economics) shows us that people hate losing much more than they like winning. So the winners are quietly happy, and the losers are noisily unhappy. That’s how we reach “Nash Equilibriums” where no one is happy with the current situation, but no one is willing to junk it for a new system that they worry would disadvantage them. Early wins create the currency to be able to disrupt the status quo. Lack of early wins means the disruptor is shut down.
It’s also possible that a focus on quality of care was prioritized over a focus on health care finance, and much of what is broken in employer-sponsored health care is the finance side.
We’ll all be interested to read the “inside story,” although it’s a pity that Atul Gawande, one of the best health policy writers around, isn’t likely allowed to write that story.