Paduda: Haven Healthcare’s Demise Affords Classes for Employees’ Comp| Employees Compensation Information

By Joe Paduda

Friday, January 15, 2021 | 50 | 0 | min read

Haven Healthcare, the Amazon-JPMorgan-Berkshire Hathaway joint venture designed to reinvent healthcare, no longer exists. The drive to improve access to basic services, simplify insurance coverage and make prescription drugs more affordable ended after three years.

Joe Paduda

We don’t know why Haven is in heaven now; It could be that three of the most powerful and best-run organizations in the world have failed to figure out how to build a better health system.

Or it could be that they had different motivations, different needs, different priorities, and couldn’t figure out how to work together. That wouldn’t be a surprise. Or that their well-known, accomplished, and brilliant CEO wasn’t an effective CEO (that’s not a slam; I’m not an operator either).

Or more likely all of the above plus more.

Anyway, it’s dead. Worker Comp Execs can learn three lessons from the failure of Haven.

CEO Atul Gawande lacked the thorough knowledge of the healthcare infrastructure, reimbursement, regulations, and management required to be successful. Gawande was a brilliant writer, insightful analyst, and a highly visible public figure. He also didn’t quit his other jobs and had no experience as CEO of a startup.


Two things: knowledge and commitment.

Do you know anyone in the workers’ association who has in-depth knowledge of the healthcare sector? Someone who understands reimbursement, infrastructure, process, the regulatory environment? Medical drives the workforce, and very few employees have this knowledge and understanding.

Many who believe they do not do it.

Then there is engagement. Gawande was committed to Haven – and frankly so were the three founding companies – just as the chicken is committed to breakfast.

If you’re looking to take on something as daunting as health care reform, the best way to do it is to devote yourself to how the pig is committed to breakfast.

Second, market share. With about 1.6 million employees and maybe 5 million policyholders, the three giants had a lot of life to cover, a lot of money to pay for healthcare (about $ 24 billion in employer bills and about $ 30 billion total). But the proverbial one-mile-long, one-deep problem meant that Haven had no local scale.

Health care is local. Institutions and medical practices want insured bodies. The more the better. Outside of a few markets where Amazon has large distribution centers, Haven didn’t have enough facilities to take advantage of big changes.

Implication: Total annual medical expenses for workers roughly match that of Haven ($ 31 billion). That’s less than 1% of US medical spending. Haven tried to use all of those dollars. It went wrong.

Unlike Haven, there are many comp networks of workers all trying to negotiate deals. The largest have potentially $ 8 billion in national spending.

These are small potatoes, in fact, just a tablespoon of hash browns.

what does that mean to you?

The workers’ comp industry cannot “solve” health care. but that is not the point.

The point is this: Organizations and leaders who know more about healthcare will be more committed to better performance and will far outperform their competitors.

Joseph Paduda is a co-owner of CompPharma, a consulting firm focused on improving pharmacy programs in employee compensation. This column is republished from his Managed Care Matters blog with his permission.

Comments are closed.