Haven, the brainchild of the CEOs of Amazon, Berkshire, and JPMorgan Chase was set to disrupt the inefficient healthcare sector but failed miserably.
According to its founders, Haven’s operations will end in February after only three years of operation. The venture’s closing down is not really unexpected following the resignation of its CEO. High profile healthcare researcher and doctor, Professor Atul Gawande stepped down several months ago.
Haven’s goal was to reduce healthcare costs for the three companies, its employees, and all Americans in the future. The company’s website, which is now defunct, states that Haven’s focus is to create value for families and not shareholders as the company was not seeking incentives.
With such a goal, the venture spiked panic in the healthcare sector as companies saw it as a prospective competitor in the market. And with the three companies being giants in their own right, the trio was believed to succeed in correcting the chaos in America’s medical system.
However, three short years down the line Haven is packing up. While it is not clear what exactly happened, but there are clues that hint at the natural limits of the company as well as the sector it intended to compete in.
Haven’s Strategy Loopholes
Although there is secrecy surrounding the collapse of Haven, its management may have been the reason behind it. Issues such as lack of tangible progress, inability to retain talent, and hiring a CEO who had limited experience in running the venture, all may have weighed down the company.
Apart from that, the company’s goals have been considered ambiguous and unattainable. Amitabh Chandra, Harvard Kennedy School of Government’s director of health policy research, tweeted that Haven’s goal was vague and ambitious. According to him, it was more of “a vision rather than a business plan.”
The three companies, Amazon, Berkshire Hathaway, and JPMorgan Chase combined have 1.2 million employees who live around the country. With this geographic diversity, Haven was faced with the challenge of providing healthcare coverage for its employees wherever they are while keeping it cost-effective.
The conflict in the interest of the three companies was yet another problem that Haven had to deal with. According to CNBC, each of the companies wanted the venture to continue researching on medical solutions for its employees.
Amazon Care may be the major contributor to the disbanding of Haven. This initiative caters to Amazon employees who live in Seattle. Employees who sign up for the healthcare cover are allowed to have telehealth visits, text with their clinicians, get a nurse visit at home, and get medications delivered to their homes.