Judge rules ex-Optum executive can join Amazon-led health venture

Witness stand in courtroom
A federal judge will not block a former Optum executive from joining Amazon's health company. (Getty/aerogondo)

A federal judge will allow a former Optum executive to join the Amazon, Berkshire Hathaway and JPMorgan Chase healthcare venture. 

Optum sued David Smith, a former staffer at the insurer, in late January, saying Smith took trade secrets to new joint company. Massachusetts Judge Mark Wolf, however, rejected (PDF) late Friday the insurer’s request to block Smith from joining the Amazon-led venture as the dispute is resolved in arbitration. 

Wolf issued a stay in the case, and said if the arbiter’s decision isn’t appealed, then the case will be dismissed. 

The dispute centered on whether or not the joint venture—which has been vague about its plans—amounted to a competitor to Optum, a large pharmacy benefits manager and a subsidiary of UnitedHealth Group, one of the largest insurers in the country. 

Leaders at the Amazon-JPMorgan-BH company, including Smith himself, disputed Optum’s claim that they will compete. Wolf said Optum had failed to prove that the two would be direct competitors. 

RELATED: Hospital executives believe Amazon can deliver on its hype as healthcare disrupter 

The lawsuit highlights just how concerned healthcare companies are about the secretive healthcare company. Details have been limited, but the case did bring some details about its plans to the fore

Jack Stoddard, the venture’s chief operating officer and another Optum veteran, said that one of the main goals is take advantage of data analytics to make health insurance benefits easier for Amazon, JPMorgan and BH employees. About 1 million employees and their dependents receive insurance through the companies. 

“It's very difficult for the employees when we talk to them to be able to understand what's covered, to afford their coverage,” he testified at a hearing in the case. “These are fulfillment center workers. These are call center workers.”  

Stoddard said primary care would be another focus of the company.