CNBC just announced that HAVEN, the joint venture of Amazon, Berkshire Hathaway and JP Morgan, has decided to fold as healthcare is complicated:
Haven, the joint venture formed by three of America’s most powerful companies to lower costs and improve outcomes in health care, is disbanding after three years, CNBC has learned exclusively.
The company began informing employees Monday that it will shut down by the end of next month, according to people with direct knowledge of the matter.
I was always perplexed at what Haven could do differently and better as I wrote in 2018:
My first professional thoughts though are the following:
- Healthcare is hard
- Big data is already being run hard in healthcare by incumbents (Optum), start-ups (Oscar, Clover) and tech companies (Google/Verily)
- What are they planning to do differently than previous private sector consortiums?
- What are they planning to do differently than CalPers and other large pension pools?
- What are they planning to do differently than large insurers with significant fully insured pools?
- What are the planning to do differently than large integrated delivery networks that also self-insure?
- 1+ million covered lives is a good pool for experimentation and beta testing but not a representative sample for the nation
- Healthcare is hard
We have good ideas on how to reduce costs. They mainly involve a variety of ways of saying “No” or at least saying “No, not at this price” as well as care design. I could see a strong play for reference pricing, centers of excellence and value based insurance design. Bringing that all in-house could make some sense on some level. But I am really scratching my head on the so-what unless they really think that they have a special sauce that can accurately and effectively intervene so far upstream of preventable costs at pennies on the dollars. If that is the case, great but so far no one has found that special sauce.
Healthcare is hard. Having cool technology is nice, but not sufficient nor always critical. Most attempts to storm the healthcare castle will fail. And this time, the castle was not stormed.
Nicole
Clever Boy Syndrome strikes (and struck out) again.
Another Scott
Google is rather infamous for starting interesting projects and then killing them after a few short years. And they’ve got their fingers in all kinds of pies. It’s not surprising that they tried this, and not surprising that they killed it after just a few years. It’s what they do.
(And, honestly, it’s what tech companies should be doing. Seeing if there are new ways of doing things that are more efficient, cheaper, faster, somehow better. Giving it a good shot, then moving on to something else if it doesn’t show signs of working.)
Thanks.
Cheers,
Scott.
Brachiator
This is unfortunate. But understandable, I guess.
Benw
They’d have gone further if they stuck to fax
Gin & Tonic
@Benw: For anyone reading this thread and not the previous, this will make no sense at all.
LeftCoastYankee
Hopefully, this type of magical thinking around “technology” (including blobbing in anything electronic and/or digital as “technology”) will begin to decrease as these limits slowly seep into our collective CW.
The big money brains are easy marks for this phenomenon that “tech will magically make everything instantaneous”.
In order to make technology predictive in terms of decision making it requires large large sets of historical data. Meaning it may actually take a long time to even put together, and if the end-product ends up being replacement level with human decision making, it’s not really a good financial trade-off for businesses.
This type of long-term, see where it goes work is scientific research. We will get some much more out of digital technology when we stop treating it like a magic bullet understood only by mystical silicon cowboys, and just like “boring old” science.
(dismounts soapbox)
Roger Moore
@Nicole:
This. Tech bros are one of those groups who assume they’ve handled the most difficult problems imaginable, so they should have no trouble solving whatever it is that somebody else has failed at. Sometimes they are smart enough to add something others have missed, but it’s always at the cost of enormous effort; it’s never as easy as they expect it to be.
Yutsano
“Bye bye boys! Have fun storming the castle!”
“Ya think it’ll work?”
“It would take a miracle.”
“BYE!!!”
Scott
I wonder if JP Morgan was the culprit. What is their role other than looting the system and making the patient weaker?
Brachiator
@Another Scott:
Yeah. They are lacking something in their organization. A Steve Jobs type, a marketing whiz, something. They come up with all kinds of interesting ideas, but have no interest in maintaining them or refining them. They don’t develop the concept of a product or service to be delivered to people.
It’s all about making their innovators happy. So, it’s as if a new group comes along and says, “we don’t want to make the product better. We want to come up with something new to show how cool we are.”
3M seems to be an example of a company that finds ways to develop and maintain a wide range of products.
In any event, tough to apply this creative energy to the problems of health care.
Benw
@Gin & Tonic: Dammit, I failed to eschew obfuscation!
Roger Moore
@Another Scott:
Note that this is Amazon, not Google; Google has a different project that David mentioned that does not appear to be shutting down.
And while I agree that it makes sense for tech companies to try new things and drop them when they fail, the big complaint about Google is that they seem to have different standards for what constitutes success from their users. They have a habit of creating new tools that people like and use and then abandoning them despite dedicated user base. I assume this is because the technology is OK but the business side is a failure, but it’s nonetheless a sore point with a lot of Google fans. They like and use a Google product and then get left high and dry when Google drops it unexpectedly.
As a FOSS advocate, I see this as an example of the risk of closed source software and especially software as a service. With the source code, it’s at least theoretically possible for dedicated users to keep software going indefinitely. If you don’t have the source but run the software on your own computer, you can keep running the program you need even after the company abandons it, even if you can’t fix any problems. But with software as a service, the program you depend on can go poof the moment the company providing it gives up. The more critical the program is, the less sense software as a service makes.
JDM
Boy howdy, I could sure as heck darn it shake up that health care industry. You know how? Computers! I’ll use computers!
Adore me.
Ohio Mom
The simplest way to reduce health care costs would be to take the requirement for profit out of the system. Simple and yet seemingly impossible.
And certainly not what was motivating Amazon, Berkshire Hathaway and JP Morgan.
Roger Moore
@Brachiator:
I think the thing that kills a lot of Google’s projects is that they can’t figure out how to monetize them. A group of engineers comes up with a cool idea and develops it. They release it as a beta product, and people start using it. When they see how big the user base is, they start thinking about how to convert it from a cool concept into a money making business. If they can make money on it, great! That project makes it out of beta and becomes a standard Google service. If they can’t figure out how to make money on it, it eventually gets abandoned, or possibly the users get shunted over to a different product with a better business case (or which is earlier in the product cycle and hasn’t been abandoned yet).
Calouste
@Brachiator: The problem that Google has is that they haven’t really worked out how to make money except through advertising. So if a project can’t bring in money through advertising, they don’t really know how to fund it. Of course they could just charge for software, but they seem very reluctant to do that.
Brachiator
@Ohio Mom:
I honestly do not know if this is possible or even necessary.
Ohio Mom
Also, as long as we are on the subject on Berkshire Hathaway, how Warren Buffet maintains his image as a kindly, wise old uncle-type, completely benign and without a trace of avarice, is one of the great American con jobs of all time.
Dave
Really the hard part is deciding what the desired outcome should be. Is it lower costs or longer lives or some mixture of goals. For cost efficiency the top to bottom salaried models are there (NHS or VAcomes to mind) or some regulatory/subsidized mix (German or Swiss). Just computerized records is not going to be enough
Roger Moore
@Ohio Mom:
This is an underlying problem with a huge part of our political system. Too many people think companies that are currently profitable are owed continuing profits, or at least that the government shouldn’t take away their profits by changing the law in ways that hurts their business. It makes it nearly impossible to fix parts of our economy that are systematically broken. To fix our economy, we first need to fix our political system.
Barbara
The hardest truths about health care costs:
Brachiator
@Calouste:
Not entirely true. But we probably need a separate thread about technology and innovation.
This would make a lot of software more expensive and only available to the elites.
The brilliance of google search, like yahoo and Ask Jeeves before it is that it is free. The wider the use, the more these services could be improved.
And here is an issue that may relate to health care.
Delivery of service continues to be a problem apart from funding health insurance.
Health care needs to reach more people more often and more consistently.
Ken
I’m reminded of this XKCD (though he’s done similar ones for physicists and engineers).
Lobo
I came really close to working there as a data protection professional. I had hoped to bring some “working in the trenches” knowledge. But you summed it up. Healthcare is hard and tech is no silver bullet.
Roger Moore
@Calouste:
Google actually does make money by charging for software, or at least by charging for software as a service. For example, they made Gmail profitable by offering email as a service; companies pay Google to manage their mail servers so the company doesn’t have to. They do the same thing with Google Office. With Google Drive, you get a some space for free, but you have to pay a fee if you want more. I don’t think these things are as profitable as their ad business, but they do make money.
ItinerantPedant
I can’t tell you the number of times that I’ve listened to executives in a half billion dollar a year business say, “We should do [thing they’re COMPLETELY unfamiliar with]. We’re smart. How hard could it be?” Followed by falling flat on their collective faces, because, as it turns out, [thing] turned out to be really difficult (including a [thing] I told anybody who would listen was really difficult…that project ended up two years behind schedule).
Nobody is as over confident as someone successful in one field in which they’ve worked their whole lives, nor as resistant to input to people with diverse backgrounds.
Mary G
I don’t want to talk to you no more, you empty headed animal food trough wiper. I fart in your general direction. Your mother was a hamster and your father smelt of elderberries
sab
@Mary G: Is smelling of elderberries a bad thing? I tend to be clueless on popular culture.
sheila in nc
@Mary G: So you are saying that healthcare is the holy grail of US domestic policy?
sab
@ItinerantPedant: My brother was a finance whiz early in his career and I was a lowly tax person. He called me about partnership taxation. I told him it was an extremely weird and technical field and I wasn’t about to comment on it, and perhaps he (non-lawyer) should go beyond the Internal Revenue Code and read the related Regs. He hadn’t known there were Regs. The things they don’t teach you in B School.
Anonymous At Work
@Roger Moore: I can see the mission statement being a bunch of MBA-babble about leveraging synergies and technological innovations. Smells more like snappy banter by fresh-from-Kinsey Ivy-League MBAs, since the money appears to have been Wall Street investors.
Kent
Exactly. My wife finds herself at the epicenter of this by working for Kaiser Permanente here in the Pacific Northwest. Which is very much laser-focused on both of those things. They say “no” by using primary care physicians as the “gatekeepers” to expensive specialty referrals. And they spend tremendous effort on preventative care to prevent expensive interventions down the road.
Interestingly, she told me that Kaiser cut a special deal with Intel, one of the largest employers here in the Portland metro. Apparently in order to lock down the massive contract for Intel employee health care, Kaiser agreed to much more liberal or responsive specialty referrals and such. So when they get an ‘Intel patient’ the chart is flagged and the nurses let the doctors know the patient is “Intel” and is going to more likely get what they want if it is a specialty referral or expensive diagnostic test they might not otherwise do. Drives my wife crazy.
Old School
@sab:
All of Mary G’s comment is nonsensical taunts from the film Monty Python and the Holy Grail.
Frank Wilhoit
@Brachiator: It is necessary, because it makes all the incentives perverse. (NB. “all”.)
I do not engage the question of whether it is possible, because the word “possible” does not have a single meaning.
Barbara
@Kent: Kaiser’s interventions and techniques are limited by wider societal expectations. What is needed is an ecosystem where Kaiser is the rule and not the exception. We are a long, long way away from that.
sab
@Old School: Thank you. Geez, I saw that movie long ago.
Wapiti
@Kent: We were covered by Kaiser when we lived in CA. They sent us a health care book that covers all sorts of maladies with instructions of what you can deal with, what you need to talk to your doctor about, and what to take to the ER. A very useful book.
It’s also online; searching for “<malady> Kaiser” will often bring up the Kaiser site for the malady.
Calouste
@Roger Moore: I don’t think that adds up to more than maybe ten percent of Google’s revenue, and certainly not profit. Which is what I meant with really make money.
Brachiator
@Roger Moore:
No. More to it than that. They get bored or don’t see how to maintain a product or service, even when customers clearly enjoy and use the service.
This also applies to products such as the Pixel phones.
The history of successful products often involves someone who invents or develops it and someone else who knows how to market the shit out of the product and maintain it.
Google lacks this, or doesn’t seem interested in developing this kind of talent.
Kent
@Barbara: Oh, of course. They have their flaws too. They run their primary care doctors ragged and have high burnout as a result. But at least their priorities are line with cost cutting and improving preventative care, unlike much of the rest of the US health care system.
Steve in the ATL
@Ohio Mom: he’s like a cross between Ronald Reagan and W Bush!
Kent
I think part of the problem is that Google gets involved in niche stuff that is never going to be more than rounding error in their revenue stream. So they lose interest and discard it. Where a much smaller company might do productive, profitable and interesting things with the technology.
That’s a problem with all monopolies, and why telephones were basically unchanged from the 1950s to the 1980s and then suddenly we had an explosion of different types of phones. AT&T was just uninterested in developing new kinds of phones when they had a monopoly on the old rotary ones we all grew up with (those of us of a certain age anyway).
Jeffro
I guess when it’s easier to start frickin’ space exploration ventures than revamp health care, folks ought to take notice.
piratedan
@Barbara: one item that seemingly always escapes notice is how all of this works as a whole…
you have a medical records system that is tied to one patient, one provider/HMO….
said patient has an issue, depending on where they show up, and the type of insurance that they have, we have a myriad decision tree that starts with in network/out of network choices…
it’s a tree that also has a concurrent silo of what is the best source of treatment for the patient and their malady….
these silos are concurrent and often-times do not overlap.
You could/would see more advances in these fields but for small decision points/hiccups like privacy, decision making by non-human entities, and the dreaded cost-benefit analysis.
sadly the answers involve “who gets paid” just as equally as “who gets treated, how”.
different-church-lady
An on-line realtor and two investment bankers walk into a bar…
sab
@Steve in the ATL: Where were you when satby needed labor advice? Missing, as always.
different-church-lady
@different-church-lady: On line retailer, not realtor… DAMMIT, hate when I typo the jokes…
Arclite
Healthcare is easy. Just kick out teh sicks.
Roger Moore
@Kent:
You’d think they’d at least try spinning those ideas off to someone willing to put the effort into developing them. I thought part of the point of creating Alphabet as an umbrella company was to let them spin off interesting projects internally.
taumaturgo
Haven found that going beyond the current healthcare consumer’s ripoff is really beyond the pale even for them. A majority of the world government is either in a Universal or single-payer system, which the evidence is clear is not so hard to implement. The hard part comes when is essential to skim 20% right off the top for huge salaries, bonuses, and ultra-expensive medical equipment at the same time our mortality continues to crap out. Best healthcare in the world for the very few!!
J R in WV
@Old School:
@Mary G:
When Mary G tells us “I fart in your general direction” that was when I knew the source of this wonderful remark. Elderberries actually smell great, and the wildlife love them when they get over-ripe and alcoholic. Drunken birds and intoxicated squirrels. Oh, My!!!