June 20, 2018

Amazon, Berkshire Hathaway and JPMorgan

Amazon,

Amazon, Berkshire Hathaway, and JPMorgan Name C.E.O. for Health Initiative

Amazon, Berkshire Hathaway, and JPMorgan Chase, the powerful triumvirate that earlier announced its hope to overhaul the health care of its employees and set an example for the state said on Wednesday that it had picked one among the country’s most famous doctors to steer the new operation.

Dr. Atul Gawande, a Harvard surgeon and staff writer for The New Yorker magazine will become chief executive of the new company, which can be based in Boston, on July 9.

He said he wasn't stepping down from his current medical and other duties to require the work.

The choice of Dr. Gawande, a highly respected doctor and writer on health care was met with surprise because he has little hands-on experience running large health care the organization, unlike a number of the boldface names that are floated as possible candidates.

“He’s such a well-known health care luminary and keen observer, but this is often an enormous leap,” said Dr. Lisa Bielamowicz, a co-founder of Gist Healthcare, a consultancy in Washington.

“He hasn’t led an enormous team or company.”

By getting into health care, the three corporations had signaled a widespread frustration, shared by many American businesses, with the country’s convoluted, high-cost medical infrastructure.

Informing the new venture, the alliance said it might “operate as an independent entity that's free from profit-making incentives and constraints.”

As desperate as employers are to ascertain significant change, the alliance’s three chief executives— Amazon’s Jeff Bezos, Berkshire Hathaway’s Warren Buffett, and JPMorgan Chase’s Jamie Dimon — have offered little detail on what they need, and their efforts thus far are received with skepticism.

Corporations have long tried to scale back the value and the complexity of medical aid, but making changes requires taking over powerful interests like big hospitals and insurance companies that want to preserve the established order.

The three companies represent roughly 1.2 million employees scattered across different markets, giving them little immediate leverage with health plans and hospitals.

The selection of Dr. Gawande, who has spoken out loudly and clearly against a number of the problems with health care is that the first the concrete step taken by the three to satisfy their promise to shake up the system, which Mr. Buffett has described as “a tapeworm of yank economic competitiveness” due to spiraling costs that still eat up more of the country’s gross domestic product.

“We said at the outset that the degree of difficulty is high and success goes to need an expert’s knowledge, a beginner’s mind, and a long-term orientation,” Mr. Bezos said on Wednesday.

“Atul embodies all three, and we’re starting strong as we move forward during this challenging and worthwhile endeavor.”

There is little doubt that Dr. Gawande is going to be ready to outline what he has said he believes are the system’s failings.

“Tapping Atul Gawande to go the new venture may be a very positive sign,” said Brian Marcotte, the chief executive of the National Business Group on Health, which represents large employers.

“He may be a thought leader, thinks outside the box, and is hooked in to fixing what ails our health care system.”

Dr. Gawande may be a professor at the Harvard T.H. Chan School of Public Health and Harvard school of medicine and a practicing surgeon at Brigham and Women’s Hospital.

“This work will take time but must be done,” Dr. Gawande said during a statement.

“The system is broken, and better is feasible .” He declined to be interviewed.

He is also the chief director for Ariadne Labs, a joint project by Brigham and Women’s and Harvard to further the adoption of measures that aim to enhance patient safety, like surgical checklists.

In a letter to friends and colleagues, Dr. Gawande said his role as chief executive “will not require me to go away Ariadne Labs, Brigham Health, or Harvard.

My plan is to transition from executive of Ariadne to chairman while remaining a surgeon on staff at the Brigham and professor at Harvard.

I will also still write, including for The New Yorker magazine.”

His articles, while influential, haven't been resistant to criticism.

His 2009 New Yorker piece, “The Cost Conundrum,” which checked out unnecessary care in McAllen, Texas, by comparing spending patterns around the nation was required reading within the Obama White House.

But McAllen was a hot spot of medical fraud, and subsequent studies showed that the places identified as low-cost under Medicare could actually, be a high cost for those that are privately insured.

Dr. Gawande was chosen for the position after leaders at Amazon, Berkshire and JPMorgan interviewed many professionals, Mr. Buffett said.

The companies appeared to struggle publicly to seek out an executive, with prominent leaders like David T. Feinberg, the chief executive of Geisinger Health System, the innovative group in Pennsylvania, saying they weren't taking the work.

While Dr. Gawande doesn't have business experience, he has spent his career that specializes in the way to improve look after the sickest patients, said Dr. Bob Kocher, a speculator who advised President Obama on health care policy.

He pointed to Dr. Gawande’s ability to draw in other individuals to the venture.

“He understands the health care system as an insider,” Dr. Kocher said. “He has been a truth-teller.”

But Dr. Kocher said that Dr. Gawande’s public health experience in emphasizing preventive care is unlikely to yield the immediate savings companies like these three wants.

“He goes to possess to return up with an entire new carpenter's kit,” he said.

The challenge he and therefore the remainder of the country face are the way to overcome the pricing power of massive hospital groups that dominate certain markets, and drug companies, Dr. Kocher said.

Employers have also been immune to limiting the selection of hospitals and doctors for his or her workers.

Instead of finding someone who has experience running a health care business, “they picked a really splashy name,” said Craig Garthwaite, a professor at the Kellogg School of Management at Northwestern University.

The fact that Dr. Gawande isn't devoting all of his energies to the venture makes Mr. Garthwaite is more skeptical.

“It starts to feel fundamentally unserious if you’re not hiring a full-time C.E.O.,” Mr. Garthwaite said.

“If you’re transforming health care, you’re reshaping the economy of Germany, effectively,” he said. “It’s not a part-time gig.”

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