After just three years, on January 4th, Haven, the joint venture of Amazon, Berkshire Hathaway, and JPMorgan Chase, announced that it will cease operations at the end of February. Although the venture will end, these three companies said they will continue collaborating informally.
In 2016, the US spent $9,892 per person on healthcare, which is 25% more than Switzerland, and a staggering 145% higher than the Organization for Economic Cooperation and Development (OECD) median. This was according to a study led by Johns Hopkins Bloomberg School of Public Health researcher published in January 2019. However, this problem is only growing, according to the Centers for Medicare and Medicaid Services, US healthcare spending grew by 4.6% in 2019, reaching a cost of $11,582 per person.
Created in 2018, Haven intended to address the rising cost of employee healthcare by providing lower-cost insurance to the employees of these companies. The goal was to disrupt this sector and to reduce the price of healthcare. However, the US healthcare system is notorious for being complicated and entrenched due to all the different parties involved. Last year, the CEO of Berkshire, Warrant Buffet, acknowledged that Haven might not be able to improve healthcare.
Another issue Haven faced was the fact that each company executed its own projects. For example, Amazon provided Amazon Care for their employees in Seattle in 2019, which allowed them to connect with virtual physicians, schedule house calls, and order prescriptions. Amazon Care was expanded for all employees in Washington State in September 2020. Additionally, Amazon Pharmacy launched in November last year, and it allows customers in the US to order prescriptions for home delivery.
The closure of Haven comes after its CEO, Dr. Atul Gawande, stepped down back in May. After Haven shuts down by the end of next month, most of its 57 employees are expected to be placed in new positions at Amazon, Berkshire Hathaway, or JPMorgan Chase. It was also indicated that the three companies are expected to collaborate informally in the future.
In an interview with CNBC, Brooke Thurston, a spokeswoman for Haven, confirmed the company’s plans to close and gave this statement: ″The Haven team made good progress exploring a wide range of healthcare solutions, as well as piloting new ways to make primary care easier to access, insurance benefits simpler to understand and easier to use, and prescription drugs more affordable,” Thurston said in an email.
“Moving forward, Amazon, Berkshire Hathaway, and JPMorgan Chase & Co. will leverage these insights and continue to collaborate informally to design programs tailored to address the specific needs of our individual employee populations and locations,” she said.
By Daniel Ojeda, Ph.D.
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