Now that the Amazon, Berkshire Hathaway, JP Morgan healthcare venture has hired a CEO, Dr. Atul Gawande, what should we expect? Right after the announcement of the non-profit venture, there was buzz about how the group could make a significant impact on healthcare…we’ll see.
Their initial announcement sparked slides in shares of existing healthcare companies. However, whether significant change or even disruption could come from this group is yet to be seen. Their direction is still unclear in their public statements (and perhaps in their internal discussions).
The stated goal of this venture is, ‘forming a not-for-profit health care venture to lower health care costs for their U.S. employees’. In recent comments from them, there were references to ‘value based care’. A recent article in Modern Healthcare mentioned that, “Gawande’s writings offer some insight on how he may curb costs”. It then listed some positions advocated by Gawande such as making physicians more aware of cost of care plus taking the profit motive out of healthcare. In the summary of his ideas it also mentioned using checklists to minimize risk and balancing quality of life with life-saving procedures which may be costly. Some of these ideas sound more incremental (even common sense) than disruptive. But of course any change in healthcare is likely seen as disruptive.
Maybe this venture will change healthcare but in a different way than the headlines infer. The venture does have the benefit of not having the baggage of a legacy healthcare organization. No hospitals, no groups of providers, no investment in brick and mortar, no established processes, no charge master, no health plans or high deductible insurance offerings, etc. They have the opportunity to follow a ‘blue ocean’ strategy, create a new process for delivering care that focuses on consumers.
Some other not so well known organizations are already experimenting in this space and may be the ones who deliver the new ideas we need to ‘fix’ healthcare. Stay tuned!
James DiGiorgio, President, Applied Knowledge, LLC, Tel: 630-308-0239 (cell), Email: firstname.lastname@example.org