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Our Take: Gawande to lead new Amazon venture

Jun 25, 2018

Amazon, Berkshire Hathaway and JPMorgan Chase appointed Dr. Atul Gawande as chief executive officer of their newly formed health care company. In press release, the companies announced that the new company will be headquartered in Boston and will “operate as an independent entity that is free from profit-making incentives and constraints.”

“Now I have the backing of these remarkable organizations to pursue this mission with even greater impact for more than a million people, and in doing so incubate better models of care for all,” said Gawande. “This work will take time but must be done. The system is broken, and better is possible.”

Our TakeIn hiring Dr. Gawande, these three powerhouses are signaling that they are serious about disrupting health care financing and delivery.

If you haven’t heard of Atul Gawande, here’s a quick bio. He’s a general endocrine surgeon at Brigham and Women’s Hospital and a professor at Harvard Medical School and the T.H. Chan School of Public Health. He writes for The New Yorker and has published four bestselling, thoughtful books on health care and what it means to be a doctor—and more important, a patient—today.

Take 20 minutes and watch Gawande’s TED talk, “How do we heal medicine?” and you’ll see why it’s been viewed 1.8 million times.

Welcome back.

Gawande is smart, compassionate and the kind of leader that people like to follow. For many of us, he’s a familiar face who not only advocates for change but also implements change. For instance, he developed the Surgical Safety Checklist, which was adopted by the World Health Organization in 2008. His company, Ariadne Labs, works with hospitals and medical facilities around the world to adapt the checklist.

Countless lives have been saved, infections avoided and complications averted as a result of this radical, yet simple idea.

It’s no wonder why Warren Buffett, Jeff Bezos and Jamie Dimon chose him.

Dimon told a Fortune reporter that they didn’t expect to find someone who would have all the answers, but that Gawande is the right person to assemble a team that would find solutions and implement them.

On the other hand, Gawande says he still intends to teach at Harvard and practice medicine, and we presume he will write more books. This is a problem. Northwestern professor Craig Garthwaite commented, “So we’re officially running a passion project here not a business. … Prediction: this firm will have the most eloquently crafted explanations as to why they haven’t disrupted health care at all.”

To be fair, Gawande has proven to have enormous bandwidth, and he’s sincerely motivated. “I am thrilled about this opportunity, as it aligns perfectly with my personal mission,” Gawande said.

What else you need to know
The Trump administration has finalized a rule allowing for the expansion of association health plans (AHPs). The rule allows employers to form or join existing AHPs, making it possible for them to purchase insurance in the large group market. Seema Verma, administrator of the Centers for Medicare and Medicaid Services (CMS), said AHPs will provide better access to health insurance for small businesses and their families. The American Hospital Association and America’s Health Insurance Plans opposed the rule based on concerns that AHPs fail to offer sufficient consumer protections. More here and here.

CMS is seeking input on physician self-referral laws (often called Stark Law) to allow for better care coordination and implementation of alternative payment models. “CMS is aware of the effect the physician self-referral law may have on parties participating or considering participation in integrated delivery models, alternative payment models and arrangements to incent improvements in outcomes and reductions in cost,” CMS said in its request for comments. Specifically, CMS is seeking comments on what changes to Stark Law are needed to protect ACOs, bundled payments and other payment modes, and asks for input on the definition of terms such as risk-sharing and gain-sharing. More here.

CVS Health is rolling out home delivery of prescription drugs and some over-the-counter medicines, CNBC reported. The move is an attempt to leapfrog Amazon, which offers free two-day shipping for many products and has been exploring the prescription drug market. CNBC said CVS customers will be able to receive their orders either one or two days after placing them, and that some urban markets will offer same-day delivery. “The rollout of delivery from nearly all of our 9,800 retail pharmacy locations nationwide represents another step forward for us in delivering innovative omnichannel solutions that help people on their path to better health,” CVS Pharmacy’s president, Kevin Hourican, said in a statement. More here.

Salesforce announced Health Cloud for Payers, a CRM platform designed for the health insurance industry. In a press release, Salesforce said insurance carriers and health plan sponsors can use Health Cloud to get a complete view of their members and provide more personalized experiences, leading to lower costs and better patient outcomes. “Health Cloud will include an insurance-specific data model that simplifies the integration of systems of record—including benefits, claims and authorizations—into one place” Salesforce said. “With all member information in a single dashboard, payers will be able to work faster and smarter, and better understand member needs.” More here.

Oscar Health is continuing its expansion in the Obamacare exchanges, announcing that it has filed plans to offer individual coverage in six new markets next year. Oscar’s six new markets are spread across three new states—Florida, Arizona and Michigan—and three additional large metro areas in Ohio, Tennessee and Texas. According to Oscar, the move will double its current footprint. The new filings are subject to regulatory approval. More here.

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