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Part 2 of Highlights from Atul Gawande Interview, Head of the New ABJ (Amazon/Berkshire/JP Morgan Chase) Healthcare Endeavor

(Note: Yesterday in Part 1 we highlighted Gawande’s view of the three big systemic problems with healthcare.  Today in Part 2 we’ll summarize his vision for the ABJ-HCE.)

Last week Amazon/Berkshire/JP Morgan Chase announced the appointment of renowned author, surgeon, and researcher Atul Gawande to head up their ambitious new healthcare endeavor (still unnamed, we’ll refer to it as ABJ-HCE for now). In a long form interview at the Aspen Ideas Festival Gawande expounded on his view of the problem facing the U.S. healthcare system and his thoughts on what the ABJ-HCE can do to make the whole system work better.

(So, Atul, what’s really up with your new gig dude?) 

Here are few of Gawande’s thoughts on what he’s been charged to do, some of the resources he has to work with, and then his big picture leap.

First, in separate conversations with each, Messers Bezos, Buffett, and Dimon were very clear and very consistent about the three things they want Gawande to accomplish:

  1. Improve Patient Outcomes. Improve Patient Satisfaction.  And, Improve Cost Efficiency.
  2. Create Scalable Models That Can Benefit All. (“what they discover has to be open to everybody”)
  3. Gear It to a Long-Term Horizon (He went on to say “part of our problem in healthcare is short-term ism.)

On the resources he has to work with:

  • Resources won’t be a problem. Human behavior will be.  Achieving scale will be.”
  • ABJ-HCE will be an independent non-profit entity. No money will go back to Amazon, Berkshire, or JP.  He reiterated that the only goal will be to improve, scale, and do it for the long haul.
  • 1.2 million employees (plus dependents) representing a broad spectrum of people (fulfillment centers (Amazon), traditional and established industries (Berkshire), financial services (JP), geographically dispersed (many locations across the country)
  • Interestingly, he mentioned that most of the people ABJ-HCE will be serving fall into the gap between Medicare and Medicaid. While these folks are not covered by either, Gawande said they are the ones paying the taxes to enable and that Medicaid is better coverage – no copays , no deductibles, no premium — than the ABJ-HCE employees could ever get.

So, netting it all out — it sounds like he has a boatload of financial resources, a critical mass of covered lives, a cross section of people that are geographically dispersed, under a not-for-profit operating mode and a long-term horizon.

And, he must deliver better outcomes, greater patient satisfaction, significantly reduce financial waste in the system, create scalable new models for better healthcare delivery (right care, right time, right way, right cost) and can then be shared with all.

In a future post, we’ll summarize the potpourri of other interesting and compelling Gawande related thoughts including the what, the why, and the how (with the help of changes in public policy) we get to a “consistent system where every human being has a regular source of care for most of their healthcare needs”.

Highlights from Wide-Ranging Interview with Atul Gawande, Head of the New ABJ (Amazon/Berkshire/JP Morgan Chase) Healthcare Endeavor, Provides Glimpse of Vision and What They Hope to Accomplish

(Note: In keeping with our 2 Minute Drill mantra, we’ve broken this into two parts. Today in Part 1 we’ll highlight Gawande’s view of the three big systemic problems with healthcare. Tomorrow in Part 2 we’ll summarize his vision for the ABJ-HCE.)

Last week Amazon/Berkshire/JP Morgan Chase announced the appointment of renowned author, surgeon, and researcher Atul Gawande to head up their ambitious new “Amazon/Berkshire/JP Morgan Chase healthcare endeavor” (still unnamed, we’ll refer to it as ABJ-HCE for now). In a long form interview at the Aspen Ideas Festival Gawande expounded on his view of the problem facing the U.S. healthcare system and his thoughts on what the ABJ-HCE can do to make the whole system work better.

Here are few of Gawande’s thoughts that struck me as I watched the interview:

  • While healthcare comprises 18% of the U.S. economy, 30% of those expenditures are of no benefit to the patient.
  • The three biggest sources of waste are:
    • Very high administrative costs. He said there are a lot of “middlemen” in the system some of which must be taken out of the system to simplify the equation.
    • Pricing (I think he’s referencing the price of healthcare services and the method of paying providers for the services)
    • Mis-utilization of treatment. This is identified as by far the biggest of the three buckets. He defined mis-utilization as the wrong care, delivered at the wrong time, and in the wrong way.
  • On the reality of our healthcare system:
    • It was built in the 1940’s and 1950’s when there were only a handful of treatments.
    • Then: A system where the clinician could be expected to do it all – administer the right medicine and treatment. Add in some staff and a place for the patient to recover otherwise leave the clinician alone to do it all.
    • Now: We’ve discovered in the last century that the number of illnesses we can have and the number of ways the human body can fail exceeds 70,000 (covering 13 organ systems).
    • And, in the last fifty years we’ve generated 4,000 new surgical procedures and 6,000 new drugs.
    • Yet, we’re still deploying all these new discoveries and capabilities on a 40’s and 50’s system where the clinician will take care of it.

Gwande points to a broken system. Healthcare is now so complex “that everybody involved feels it’s out of their control – payors, patients, and providers — with no real influence over the end results. “Obamacare is on life support” and “even though I’m going to work for a bunch of employers, employer-based care is broken”.

Tomorrow in Part 2, Gawande on what’s needed, what ABJ-HCE brings to the table, and achieving his goal for the endeavor:  “Scalable solutions for better healthcare delivery everywhere”.

As Expected, States Will Have More Control and Greater Flexibility in Regulating Obamacare Starting in 2019

In a CMS press release the Trump Administration announced yesterday, as expected, that beginning in 2019 individual states will have more control and greater flexibility in regulating the individual health insurance market and the Obamacare Marketplace (aka the Exchange). In a summary of the “final 2019 Payment Notice Rule” CMS highlighted provisions that were intended to increase flexibility, improve affordability, and decrease administrative burdens.

 

It’s likely that changes made at the individual state level will ultimately have some impact either directly or indirectly on employer sponsored health coverage, particularly the small group market. We will be monitoring this very closely for our clients and will report back, especially as we get closer to 2019 and more information becomes available.

In the meantime, here’s a sampling of the headlines and links to the respective articles following yesterday’s announcement by CMS:

Here’s a link to the CMS press release:

 

Warren Buffett on the Amazon/Berkshire/Chase health venture — “Don’t Expect Any Miracles Out Of Us”

A month and change has now passed since the great splash of January’s big Amazon/Berkshire/Chase health venture announcement. It certainly was successful in disrupting the news cycle. The initially sky-high healthcare “Richter Scale” readings are returning to normal. And, it’s pretty safe to say that any substantive changes, major disruption, and any new normal that may be triggered by this venture on big healthcare (20% of the economy), other employers – big, small and in between, and everybody else are not on the immediate horizon.

Like the CVS/Aetna venture announced last December, real change is likely to be More Tortoise Than Hare.

A sampling of Warren Buffett’s comments in some of his recent interviews with Bloomberg, CNBC, and KHN may provide you with a little more insight and a glimpse of some of his expectations.

Here are a few sound bytes from recent Buffett interviews:

He said that the goal of the business is “better care, lower costs,”and, that it will take time.”

This is not easy. If it was easy, it would have been done.”

It would be very easy I think to go in and shave off 3 or 4 percent just by negotiating power. We’re looking for something much bigger than that.”

He spoke of health-care spending taking up an increasing proportion of the U.S. economy, and a indicated that the goal of the venture is to “at least” halt that ascendant trend.

Buffett also stated that he hopes “we could find a way where perhaps better care could be delivered even at somewhat lesser cost.”

To read more go to Bloomberg: Buffett-Dimon Health Venture To Go Beyond Just Squeezing The Middlemen 

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