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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