Back Button
Menu Button

Another One Bites the Dust – Haven Ends Healthcare Quest

The medical industrial complex has claimed yet another innocent victim. But this is not just any victim.

Three years ago, an independent company, Haven Health, was formed by three powerhouse forces in the business world: Amazon, JPMorgan Chase and Berkshire Hathaway. Meant to transform healthcare, Haven was a very unique collaboration that put the healthcare industry on notice that a new sheriff would be in town to help clean up a messy and unruly industry dominated by legacy players.

The likes of Jeff Bezos (Amazon), Jamie Dimon (JPMorgan Chase) and Warren Buffett (Berkshire Hathaway) were serving as the newly-assembled sheriff that would instill both fear and respect by industry inhabitants.  When this marriage was announced in 2018, I wrote a blog about the likelihood of having three disruptive ‘outsiders’ force long overdue changes to healthcare practices. I ended this blog with one stark sentence: “Only time will tell.”

Time is Now Here

It appears the healthcare industry is more complex (and unforgiving) than even the sheriff had believed. This most recent development reminds me of what President Trump naively claimed while attempting to repeal and replace Obamacare in 2017: “Nobody knew that healthcare could be so complicated…”

On Monday of this week, Haven announced that it will end its mission of exploring healthcare solutions, such as “piloting new ways to make primary care easier to access, insurance benefits simpler to understand and easier to use, and prescription drugs more affordable.” According to the Wall Street Journal (subscription required), any collaboration between these companies will become less formal in the future.

In addition to impacting their own respective workforces, the collaboration also intended to influence and disrupt the payment and delivery models currently in place. Reading between the lines, however, when their appointed chief executive, Dr. Atul Gawande, stepped down from his role in May of 2020, perhaps the proverbial ‘flywheel’ lost any inertia it may have gained.

Lesson Learned

Going forward, it will take more than three highly-respected leaders and their innovative organizations to mildly disrupt a system that desperately needs disruption, but has largely resisted meaningful changes. Many have tried to reform this massive industry, but up to this point, there has been very limited success.

In healthcare, bold changes may only come after America experiences an unimaginable crisis beyond anything we’ve ever encountered before.  But then again, only time will tell.

–Update on Hospital Price Transparency Requirement

My Tuesday blog on the new hospital price transparency mandate revealed that two major Des Moines hospitals have not posted the required pricing information despite a national mandate to do so – beginning January 1. The penalty for noncompliance is, quite frankly, small potatoes for at least larger hospitals – just $300 a day. To learn more, the CMS issued a FAQ on December 23.

According to POLITICO Pulse just one-third of the top 20 hospitals have posted visible price lists as of New Year’s Day. Politico reports, of those hospitals that have posted, the information is often vague or hard-to-decifer. More to come in future blogs on this subject.

To stay abreast of employee benefits, we invite you to subscribe to our blog.

Psst…Bezos, Dimon and Buffett: Let’s Lift the Veil on Medical Prices

This past week, we learned of a bombshell joint announcement from three significant U.S. business leaders on fixing our healthcare system: Jeff Bezos (Amazon), Jamie Dimon (JPMorgan Chase) and Warren Buffett (Berkshire Hathaway). These three individuals and organizations plan to form a new independent healthcare company for their 1.1 million employees in the U.S.  In the past, many other large business organizations have attempted to transform this healthcare system that is ripe for disruption and widely considered wasteful and inefficient. To date, however, such activity has met limited success. Conventional wisdom suggests these three behemoth companies do not have critical market power to make inroads on transforming an industry intent on gobbling up more of the U.S. economy.

So, what is different with this latest announcement? Based on this rather skinny declaration, we know very little and only time will tell.

We do know, however, this ‘new’ approach cannot happen soon enough. David Cutler, a Harvard health economist, calculated that administration accounts for nearly a quarter of the total healthcare cost in the U.S. – double the rate in the next bloated country. Karl Vick wrote quite succinctly in TIME magazine: “The U.S. healthcare system is the antithesis of Silicon Valley. Grossly inefficient and user-unfriendly, it may be the least transparent enterprise outside of the Kremlin – and just as awash in money.”

Is it possible this new coalition may propel other employers (and other payers) to band together and look for local alternatives to drive transparency in an industry that is notorious for obfuscation? The common word that is often used to change a particular industry is ‘disruption.’ Harvard professor Clayton Christensen started the Christensen Institute to address how industries can be changed (disrupted), usually through technological innovation.

The ‘pricing’ veil – A personal experience

This past December, after experiencing dizziness and double-vision, coupled with a slightly slower speech pattern, a family member was taken to an urgent care center in Mankato, MN. After undergoing a few initial tests, it was recommended the patient be transferred by ambulance to a hospital two miles away – presumably for more in-depth testing that was not available at the urgent care facility. Needless to say, this sudden turn of events was loaded with confusion over the cause of the medical problem and the impending worry.

As a patient or a family member of a patient, we seldom are prepared for what issues and challenges we face when seeking care due to a sudden medical ‘episode’ or ‘emergency.’ In fact, we typically fly by the seat of our pants when we enter the unknown world of healthcare. Even the well-intentioned medical staff are sometimes bewildered by the symptoms and possible causes of those symptoms.

Confusion reigns further when, in our case, the hospital’s electronic medical records don’t communicate with the tests previously performed at the urgent care center just 30 minutes earlier – even though both facilities are part of the same medical system! Because of this, identical tests (EKGs, blood work-up, etc.) were replicated at the hospital – unnecessary charges equating to additional costs for the payers – and increased revenue for the provider(s). I’m still working on that issue, by the way.

Thankfully, my brother and his wife were with us, which was both comforting and beneficial while attempting to discern the next course of action relating to tests and treatments. By default, we quickly assumed the role of being the ‘patient advocate’ – a daunting task.

Gratefully, the bank of medical tests found no cause for the aforementioned symptoms, although not knowing the cause remains a concern. As many of you know, the shock does not end when the patient is discharged following a litany of medical tests that occurred during a two-night stay. The second shock wave arrived a few weeks later in the form of an ambulance invoice in the snail mail and a host of ‘explanation of benefits’ found on our carrier’s website for all the other charges that occurred at the urgent care center and hospital.

The invoice for a two-mile ambulance joyride was only $1,887.79, while the urgent care facility chimed in at about $5,744.* The hospital invoice for tests and a two-night stay represented the price of a brand spanking new mid-level automobile – $24,579.40. All told, the total charges were $32,211.19, while the carrier applied their ‘network savings’ of $2,779.35.

In their recent article, “Why the U.S. Spends So Much More Than Other Nations on Health Care,” authors Austin Frakt and Aaron Carroll make the case, using a recent study in JAMA along with other research, that higher prices are the real culprit, more so than higher utilization of services by Americans when compared to residents of other countries. Yes, despite the increase in population size and the aging of U.S. citizens, health spending greatly outpaced the spending found in other countries, even after adjusting for other factors. Ashish Jha, a physician with the Harvard T.H. Chan School of Public Health is quoted in the Frakt/Carroll piece saying, “The U.S. just isn’t that different from other developed countries in how much healthcare we use. It is very different in how much we pay for it.

Why is this ‘pricing’ problem happening in the U.S., you might ask? Much of this has to do with fundamental limitations of competition in the American healthcare system. This veil of secrecy has little to no accountability on how prices are determined. Bezos, Dimon and Buffett are looking to blow up this highly-guarded industry standard. The rest of us can no longer afford to play the role of ‘innocent bystanders.’

After discussing the dearth of sensibility in healthcare pricing with a friend who works in the insurance industry, he sent me the following comical YouTube clip that cleverly attempts to address the medical price conundrum.

My recent family experience was yet another reminder that no matter our professional background, seldom are we prepared to confront the shock and confusion of the healthcare we receive…and the bills that result from that care.

The status quo in healthcare must be blown up. If existing players and stakeholders resist being part of real solutions, then the eventual sea change will sweep them into a new reality that may be difficult to survive.

As ‘real’ payers of healthcare, maybe employers can become the change they wish to see in the healthcare industry. After all, sometimes business interests can align with those of humans.

But only time will tell.

To learn more, we invite you to subscribe to our blog.

*Some billing discrepancies remain while attempting to discern a number of charges found on Mayo’s list billing with what was paid by my insurance carrier.  The list-billing from Mayo, I’m convinced, was clearly not meant to be a consumer-friendly document.