Unsealed court testimony shows Amazon-led health venture focusing on insurance complexity 

Unsealed testimony in Optum’s lawsuit against a former employee now working for Amazon, JPMorgan Chase, and Berkshire Hathaway’s healthcare venture reveals a new look at the secretive company’s plans. 

At a hearing in the case on Jan. 31, chief operating officer of the joint venture—referred to as ABC in court documents—Jack Stoddard testified that one of its key focuses is addressing insurance complexity. 

“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 said. “These are fulfillment center workers. These are call center workers.” 

He said ABC is, at present, focusing on solutions for employees and dependents who receive coverage through Amazon, JPMorgan or Berkshire's company plans—about 1 million members total. As the team studies how these employees are using their health plans, ABC is likely to significantly overhaul benefit design, he said. 

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The testimony was previously sealed to avoid the release of confidential information about the company. It was made public following a motion filed by attorneys representing STAT and The Wall Street Journal. It appeared to be resealed on Thursday.

Optum filed suit last month against David Smith, a former executive who joined the joint venture late last year, saying that Smith stole trade secrets and brought them to the new company. Stoddard, who is also a veteran of Optum, disputed that claim, saying that the nascent company isn’t a competitor. 

Smith, who previously worked as an analyst at Bain & Company, will focus on filling data gaps and using that data to identify ways that the company can address the complexities of employees’ health plans. Stoddard said Smith is not working on pharmacy benefit management, specifically to avoid a conflict of interest with his previous work at Optum. 

Smith works under a noncompete agreement with his former employer. 

"We have no plans to go in and compete in that space,” Stoddard said. “But we will look and say, could we contract with one of them to get more transparency? Can we actually understand what costs are?” 

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The court case has highlighted just how few details have emerged about what ABC intends to do—and just how much the industry is on tenterhooks to learn more because of the threat it poses as a competitor and disrupter

In addition to making insurance easier for Amazon, JPMorgan and BH employees to understand, the venture is also looking to make primary care a priority, Stoddard said in his testimony. 

Stakeholders have argued that investing in primary care is crucial to reducing healthcare costs and boosting outcomes for populations. Stoddard said that ABC views Optum as a potential partner, not a competitor, in this effort. 

“We are looking at how do we make primary care more central in healthcare, how do we make it easier for doctors to do good care and to spend more time, not less time,” he said. “Because today they don't get to spend enough time with patients.”