Top Three Takeaways from Atul Gawande’s Views on his Role as CEO of the ABC Venture

  • June 27, 2018
  • Blog

Boston Skyline, Wikimedia Commons

This article was originally published with co-author George Kalogeropoulos, CEO of HealthSherpa, on LinkedIn.

If there was any doubt that the partnership between Amazon, Berkshire Hathaway and JPMorgan Chase (ABC) on health care would be serious about both system reform and putting the individual at the center of employer-based health care, it was largely dispelled with the naming of Atul Gawande to lead the as-yet unnamed nonprofit venture.

Gawande is one of the nation’s foremost thought leaders on health care. His writing for the New Yorker and his best-selling books, including Being Mortal and The Checklist Manifesto, take a uniquely analytical and empathetic approach to examining our disjointed health care system. Gawande can explain incredibly complex topics with such measured clarity that you can’t help but feel what he feels, which is that everyone’s health matters and we should do everything to make the system the best it can be. JPMC CEO Jamie Dimon put it best when he said Gawande’s “got a big brain and a big heart.”

There is much that has already been said on his prospects for change and his approach for doing so. We covered much of that as well in our initial take on the ABC venture back in February.

Where we found Gawande’s comments this weekend to be telling on a potential future of employer-based benefits were a trio of statements:

  • There are lot of  “middlemen” in the system driving up costs without adding value.
  • Employer-based health coverage is “untenable” as it currently exists.
  • Universal coverage is “urgent if you care about human lives.”

On Middlemen
Spend even a day inside the U.S. health care system and you’ll come to the same conclusion as Gawande about the preponderance of people who stand between individuals and the best and most affordable service they can get. Some days it can feel like there’s nothing but middlemen — TPAs, PBMs, ASOs, brokers, consultants, and so on. What’s most unfortunate is that many of these intermediaries came into existence out of a real necessity for navigation through a complex system. Yet over time, some have simply become contributors to the complexity and cost.

If you are a “middleman,” should you be scared by Gawande’s statement? It depends on how you interpret it. Cutting out intermediaries is a favorite pasttime of new ventures in any industry, and the past decade has been a gold rush for technology ventures seeking to topple inefficient institutions. In health care in particular, it’s beneficial to think of all roles through a value lens. If you are not providing more value to individuals than you’re taking from them, then look out.

But also pay close attention because this exercise could lead to different conclusions than you might think. For example, brokers are frequently maligned as unnecessary go-betweens that are simply taking a commission for minimal effort. Perhaps it’s true in some cases but in the individual market brokers have taken on a valuable role as navigators to coverage for those who may not have otherwise known that they qualified. The commission they take is so regulated and such a thin margin of overall health care costs that brokers look like a deal when compared to PBMs, consultants and even providers. Conversely, nurses have become go-betweens of a different kind, often able to provide value at much less cost and much faster response times than doctors. Before assuming that your favorite “bad actor” will be on the ABC venture’s hit list, take a look at the value data very closely, because Gawande and team will be looking at it.

On Employer-Based Benefits
Gawande’s full quote on employer-based benefits was: “Tying how you get your health [care] to your place of employment is going to become less and less tenable.” By now, such a statement shouldn’t come as a surprise. In fact, Gawande wasn’t even the first to say it that week. What’s of note is that Gawande is speaking on behalf of a venture put forth by three of the largest and most prominent employers in the U.S. While we can’t know for certain what that means for what Gawande and team will actually do, he has shown previous strong support for public health policy and programs, not least of which the Affordable Care Act, Medicare and Medicaid.

Perhaps that means Gawande will approach the issue with all options in mind. If something appears untenable via employer-based coverage, then seek a public solution, and vice-versa. Roughly half of the country is covered by an employee and the other half has some form of public coverage. It should be collaborative, not combative. Gawande seems to inherently get this approach, which bodes well for individuals who just want and need coverage and generally don’t care where it comes from.

On Universal Coverage
Gawande left no doubt that he will lead on the premise that everyone should be covered, period — not that everyone should be covered so long as it makes financial sense — when he said that some form of single-payer program was “urgent if you care about human lives.” He went on to note, from research he’s compiled with others, that having health insurance has a direct impact on life expectancy. Again, we can’t know how Gawande may go about achieving this goal through the lens of providing the best value first to the employees of Amazon, Berkshire Hathaway and JPMC, but it is incredibly significant that he has the weight of these three employers behind a philosophy of coverage for all.

Any analysis of effectiveness is purely speculative. Yet now that we are aware of Gawande’s core beliefs and philosophies on employer-based coverage, we can start to see a picture forming of what may be to come. It will take years, no doubt, but if he and this ambitious venture can achieve even modest improvements while staying centered on individual wants and needs, then we’ll all be healthier and happier for it.