What the Amazon, JPMorgan Chase, Berkshire Hathaway venture's CEO pick says about their plans—and the industry

Atul Gawande
Atul Gawande, M.D., was named the new CEO of the Amazon, JPMorgan, Berkshire Hathaway venture. (Amar Karodkar/CC BY-SA 4.0)

Atul Gawande, M.D., famously explored how hospitals might run better if they copied some of The Cheesecake Factory's tricks.

The New York Times bestselling author wrote a manifesto on checklists, pondered the expensive healthcare costs of a border town in Texas and examined how Americans might finally get better at dying.

So there were plenty of reasons for speculation on Wednesday after Gawande, a general and endocrine surgeon at Brigham and Women's Hospital in Boston, was announced as the CEO of the high-profile healthcare venture started by Amazon, JPMorgan Chase and Berkshire Hathaway.

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Namely, chatter in healthcare circles centered around what big ideas the well-known surgeon might actually bring to healthcare once he has the chance.

"He’s a very, very forward thinking guy who spends his time decomposing the health environment actually having something important to play with. Not just writing articles, but being able to vent into the sector is going to be interesting," said Ralph Judah, principal at Deloitte Consulting, speaking from America's Health Insurance Plan's conference in San Diego this week.

RELATED: Amazon, Berkshire Hathaway and JPMorgan Chase appoint CEO for healthcare venture

Neal Batra, another partner at Deloitte attending the AHIP conference, was skeptical of the venture in general and pointed out Gawande doesn't have experience actually running a big company. "I think it's going to be much ado about nothing, frankly," Batra said.

First announced in January, the three major companies said they were teaming up to create a venture that could leverage their combined resources to create health solutions to benefit their U.S. workforces and eventually, all Americans. The announcement caused shockwaves across the industry.

Robert Pearl, M.D., Stanford University professor and former CEO of The Permanente Medical Group, the nation’s largest physician group, said Gawande is a brilliant pick.

Pearl has written about how the venture could impact the industry and pointed to a common theme in Gawande's work pointing out how consistency in healthcare—as in other industries—can lead to higher reliability, higher quality and lower costs.

He pointed to Gawande's work in Texas studying how variations in delivery led to higher costs and worse outcomes and said he would hope Gawande would look to shrink down the unlimited size of the delivery system and select out of it the highest-volume, highest-performing components based on data.

"He has the right partners to do that because the partners he is looking at are companies that have done that," Pearl said.

RELATED: Healthcare mergers pose a patient safety risk, study finds

Pearl believes the Amazon-JPMorgan-Berkshire Hathaway partnership is positioning itself to upend the industry. When they are done with their own employees, Pearl said he's certain they'll want to expand their efforts elsewhere in a true business venture.

"To me, it's a wake-up call. This is a five- to 10-year process, but if I were a major employer, I would be rethinking my long-term strategy," Pearl said. "And if I were a health insurance company, I would be worried about being left out."

FierceHealthPayer & FierceHealthIT Executive Editor Evan Sweeney contributed to this article.