CEO Pick Shows Amazon-Berkshire-Chase Initiative is Serious

Anyone could be forgiven for thinking the healthcare initiative convened by Amazon, Berkshire Hathaway and JPMorgan Chase was all bark and no bite. Anyone touting sweeping changes to lower healthcare costs should be greeted with skepticism.

But the companies’ choice of leader leaves no doubt that this initiative is serious about disrupting the U.S. healthcare market.

For CEO, the partners have tapped Atul Gawande, M.D., an endocrine surgeon at Brigham and Women's Hospital, Harvard Medical School professor and noted healthcare writer.

He will helm the initiatives that will explore lowering healthcare costs for their combined workforces of 1.2 million people. With a workforce of that size, any best practices that emerge could easily transfer to other large employers or even programs like Medicare and Medicaid. But as much as Gawande’s appointment surprises, it makes sense given the initiative’s purpose.

What His Various Publications Tell Us

Gawande’s writing is of great importance here. He’s written numerous thought-provoking pieces, many in the New Yorker, examining healthcare cost disparities in different communities, costs incurred by those earning a little too much for Medicaid as well as other issues. He understands factors that drive healthcare costs among regions, critical for multi-site employers like Amazon, Chase and Berkshire. Just look at the three companies’ hometowns, which couldn’t be less alike – New York City, Omaha and Seattle.

He famously wrote about the Mayo Clinic and other advanced health systems as accountable care organizations in 2009, long before the term caught fire. Now, the Medicare Shared Savings Program has 561 participating ACOs. This further reinforces that the three companies have tapped someone with an ear for the problems in U.S. healthcare.

In Short, Gawande Gets It

This isn’t simply hiring a former health insurance or health system executive. At some point, the initiative must involve people on the healthcare management side of the ledger to implement whatever ideas emerge.

The initiative is still incubating, and with so few details, its future remains anyone’s guess. Early plans are to focus on technology.

Initiatives along these lines often tend to fizzle or produce modest results, since the partners might have good intentions but lack the understanding to make actual changes in healthcare, which often end up being extraordinarily difficult.

But with Gawande leading, there’s hope that this healthcare initiative won’t be an empty endeavor.

Bill Melville is a principal analyst at DRG and national healthcare policy expert whose work appears in Health Plan Analysis and Market Overviews.

Follow him @BillMelvilleDRG