New CEO of Amazon-Berkshire-JPMorgan Health Venture Says Employment-Based Care is "Broken," Touts an American Form of "Single-Payer"

June 29, 2018

Speaking at an Aspen Institute conference, Atul Gawande, newly-appointed CEO of the Amazon-Berkshire-JPMorgan health venture, said the new entity would focus on developing “scalable solutions” that produce “better outcomes, better satisfaction, and better cost-efficiency,” while commenting that some type of single-payer system is “the necessary way to go.”

“Even though I’m going to work for a bunch of employers, employer-based care is broken,” Gawande said.  “Tying how you get your health to your place of employment is going to become less and less tenable as fewer and fewer people are getting coverage through their employment.”

Administrative costs, pricing, and misallocated care are the three buckets he identified as targets for cost reduction.

Intermediaries in the health care system exacerbate health care costs, Gawande explained.  “There are a lot of middlemen in the system, and there have to be solutions that simplify that [by taking] some of the middlemen out of the system.”

On single-payer:  Gawande said, “I think the only way we go is by having us collectively paying into a system that no matter where you’re employed you have coverage along the way.  And that’s what I think people mean by single-payer, and it’s the necessary way to go.  Now whether it’s all Medicare that people get . . . Medicaid for all . . . you can find any number of versions of systems in the United States that will be an American form.  But it will need to be something that allows us to have coverage as we move between employment especially since most of the job growth is in forms of employment that don’t have coverage.”  He cited a study by economist Lawrence Katz that found 94 percent of net new job growth between 2005 and 2015 was in “alternative work arrangements” that typically offer no health benefits.

Outlook: The new company is an independent non-profit entity that, if successful, plans to share its innovations with other firms.  According to Gawande, “resources won’t be the problem, [but] human behavior will be, and achieving scale will be.”