There were plenty of red flags that spelled the demise of Amazon, JPMorgan healthcare venture, experts say

When Amazon, JPMorgan Chase and Berkshire Hathaway first announced a joint venture aimed at taking on healthcare named Haven, it was met with plenty of buzz and intrigue. 

After all, if anyone in the private sector could move the needle on the most entrenched problems in healthcare, surely it'd be these behemoths of industry, right?

But three years later, Haven has turned from one of the biggest potential disrupters to yet another failed tech-driven venture as officials began telling employees on Monday about plans to shut down by the end of next month.

The company posted a statement to its website this week: "In the past three years, Haven explored a wide range of healthcare solutions, as well as piloted new ways to make primary care easier to access, insurance benefits simpler to understand and easier to use, and prescription drugs more affordable. 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 their own employee populations."

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But while Haven had ambitious goals and plenty of hype, experts say there were red flags from the start that the nonprofit venture would struggle to make any meaningful changes in the healthcare industry.

The venture attracted big-name talent including Atul Gawande, M.D., a widely recognized surgeon and best-selling author, to serve as CEO, as well as Optum veteran Jack Stoddard, former Zocdoc chief technology officer Serkan Kutan and Blue Cross Blue Shield of Massachusetts executive Dana Gelb Safran. But Haven also suffered from high executive turnover—Stoddard left after nine months, Kutan left the company to join Amwell in August, Safran moved over to Well Health and Gawande left in May.

The venture also had few announcements of any progress in the last several years.

"Haven tried to keep its work secret, but, in the end, the real secret is that it didn’t have any bold ideas," Omar Manejwala, M.D., chief medical officer at DarioHealth, told Fierce Healthcare.

There was an apparent lack of commitment and strategic clarity on what Haven wanted to accomplish, he said.

"You can put the sharpest people in the world together, and they don’t have to agree on how to solve the problem, but they need to agree on how to discover the ways to solve the problem," he said.

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Slow progress, competing interests

Another early move—forming Haven as a nonprofit organization—was intended to make Haven an independent healthcare company “that is free from profit-making incentives and constraints," but this might have been a strategic blunder, Manejwala said. "Non-profit structures are not fast and disruptive. Ironically, it's the for-profit entity that has ended up cracking the industry and innovating, which is Amazon Care."

It also took Amazon, Berkshire Hathaway and JPMorgan six months to find a CEO. After Gawande was hired, he kept his positions at Brigham and Women's Hospital in Boston and at Harvard Medical School. "I question the wisdom of having a part-time CEO given the scope of the problem they were trying to tackle" Manejwala said.

To succeed, Haven needed to try out bold ideas, test solutions locally and involve key healthcare stakeholders to then scale the solutions that worked. But the venture failed to take these steps, he said.

Haven’s problem may have been internal issues and execution gaps, complicated by the competing interests of its major shareholders, according to Paddy Padmanabhan, founder and CEO of advisory firm Damo Consulting.

"It isn’t easy to simply ‘disrupt’ healthcare by throwing tech and dollars at the problem. I believe a combination of market-driven change and policy action at the federal government level will transform healthcare eventually. This is already happening, as we have seen with the rapid rise in telehealth adoption during the pandemic," he said.

The three parent companies also pursued their own best interests with no reported efforts at joint contracting or procedural integration among the three companies, said Lyndean Brick, president and CEO of healthcare consulting firm Advis.

"If they couldn’t march in a line together, they were bound not to succeed. Even given how big the companies are, they didn’t have enough critical mass to make real meaningful changes," Brick told Fierce Healthcare.

“A real possibility is that the entrenched complexity of the American healthcare business model proved too daunting to change. As large as these parent organizations are, they still don’t possess the economies of scale to tip the balance when it comes to healthcare," she said.

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Winning models

Dissecting what can be learned from Haven's disbanding shows that non-healthcare companies need to leverage the expertise of partners with experience in the healthcare space, said Matt Hawkins, CEO of health technology company Waystar.
"A winning model will first solve the challenge of reducing administrative expenses by leveraging these impressive companies’ access to advanced technology, understanding of consumer behavior, and the ability to safely store and analyze data," Hawkins said. "The best course of action is to combine the resources available to these large, scaled companies with those of healthcare-focused players who demonstrate deep subject matter expertise and have experience navigating the complexities of the industry."

Haven's dissolution doesn't spell the end of employer-led coalitions, experts say. But tackling employer-sponsored healthcare also requires focus and gradual shifts, said Justin Holland, HealthJoy co-founder and CEO.

"While Amazon, J.P. Morgan, and Berkshire Hathaway each employ large, diverse workforces, I think Haven leaders underestimated the challenges of offering a single health plan or provider system. The majority of companies aren’t ready for that disruption, nor does it address the different health concerns employees have across the country," he said.

The key to improving employer-sponsored healthcare is employee engagement, and virtual care tools will play a key role.

"When tools become accessible and approachable by those who wouldn’t have otherwise had the skills to navigate the healthcare system or have the health literacy to act, that’s when there is potential for larger impact for employers and their employees," Holland said.