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Healthcare Stakeholders Dissect Haven Disbandment

Analysis  |  By Melanie Blackman  
   January 07, 2021

The disbandment comes only three years after Amazon, Berkshire Hathaway, and JPMorgan Chase formed Haven Healthcare "to create better outcomes, greater satisfaction, and lower costs for their U.S. employees and families."

Haven Healthcare, the joint venture of Amazon, Berkshire Hathaway, and JPMorgan Chase & Co., will disband at the end of February, the company announced earlier this week.

According to the Haven website, which has since been taken offline, the company's original vision was "to create better outcomes, greater satisfaction, and lower costs for their U.S. employees and families."

Despite the end of the much-heralded project, which was first announced in 2018, the three companies will continue to “collaborate informally to design programs tailored to address the specific needs of their own employee populations."

Although Haven initially aimed to disrupt the healthcare sector, the company faced turbulence from the beginning, including losing multiple C-suite leaders in a short timeframe.

COO Jack Stoddard resigned for personal reasons in May 2019, after serving for only nine months. Dr. Atul Gawande stepped down as CEO in May 2020 to serve as chairman of the company's board of directors, after serving for almost two years in the role. Megan McLean resigned as chief of staff in May 2020, after serving for almost 10 months.

Lack of traction towards goals

Jeff Becker, a senior analyst serving eBusiness and channel strategy professionals for Forrester Research told HealthLeaders that the inability to maintain a stable C-suite was "damaging to [their] ability to set a strategy, and then execute on that strategy.” He added that the strategic issues served as a “big red flag” for outsiders looking at the company.

"I think a lot of people saw [the disbandment] coming," Becker said. "There were certainly enough signs that things weren't going as planned. Haven's at three years now and we haven't seen any tangible evidence of traction towards its established goals."

But, while Haven struggled to gain traction, Becker said that Amazon continued to innovate in the healthcare sector.

"[This] led people to start questioning, what's actually coming from Haven?" Becker said. "While Haven was relatively quiet, you saw Amazon Pharmacy, Amazon Care, [and] quite a few things that we would have thought were going to be coming out of Haven, ended up coming out of Amazon proper."

"The Amazon in healthcare story isn't over," he added.

While Haven is wrapping up its operations, Becker said other companies are still interested in disrupting the current healthcare system.

"The cautionary tale is that healthcare is a $3.6 trillion market in the United States, and it's appealing to tech companies, large enterprise organizations to come and try and do better," he said. "But what we see time and time again, is that outside organizations come to healthcare and stake a flag in the ground and try and do better and they just end up turning tail a few years later. There's been a sense among outsiders that they're going to be able to come in and do it better, but I see no evidence or reason why we should continue to think that outsiders will be able to come in and fundamentally do this better."

Lack of focused execution

Elizabeth Mitchell, president and CEO of Pacific Business Group on Health (PBGH) told HealthLeaders that she's disappointed in the news of Haven’s disbandment.

"[Haven] certainly arrived with a lot of fanfare and promise,” Mitchell said. “I do think it was important that three leading CEOs of private businesses said that the current U.S. healthcare system isn't working for employers and for their employees, and something needs to change. I think that was the right position.”

Mitchell added that Haven’s most significant hurdles to addressing the institutional issues in healthcare was a lack of “focused execution and, apparently, political will.”

"There is as much demand as ever for new entrants who can tackle the growing problem of lack of affordability, variable quality, and poor experience in the healthcare system,” Mitchell said. “It is going to take concerted effort, not bright shiny objects, [to] figure out how to change an entrenched system that, quite frankly, is happy with the status quo.”

Mitchell continued: "That said, there are a lot of innovative provider partners out there who are ready for change. Clearly the pandemic is consuming providers, appropriately so. They need to be focused first and foremost on patient care, but we're also seeing the pandemic put unbearable pressure on primary care when we need it most. We are going to have to rethink the U.S. healthcare system coming out of this pandemic."

Transforming healthcare is complex

HealthLeaders also received written statements from stakeholders about Haven's disbandment.

Will Hinde, managing director and leader of healthcare and life sciences at West Monroe said in a statement: "Only those directly involved in the joint venture know the exact reasons why the effort was abandoned. That being said, the venture was always light on specifics—including how it was going to tackle historic and incredibly complicated issues like insurance coverage and prescription drug prices.”

Hinde continued: “The fact that three large, successful, and intelligent organizations faced significant challenges in solving these issues illustrates just how complex they are. The venture was an interesting concept in an ecosystem ripe for disruption, but it’s not entirely surprising that it didn’t work out and will join many others who have attempted to evolve and improve healthcare in the U.S."

Paddy Padmanabhan, CEO of Damo Consulting said in a statement: "Haven’s problem may have been internal issues and execution gaps, complicated by the competing interests of its major shareholders. That said, it isn’t easy to simply ‘disrupt’ healthcare by throwing tech and dollars at the problem. I believe a combination of market-driven change and policy action at the federal government level will transform healthcare eventually. This is already happening, as we have seen with the rapid rise in telehealth adoption during the pandemic.”

Padmanabhan added: "Transforming healthcare requires a full-time commitment. The shareholders of Haven are in very different businesses and were not in a position to dedicate themselves completely to the success of the initiative. It is possible that they will individually succeed through a piecemeal approach by addressing specific aspects of the healthcare value chain. For instance, Amazon has made significant progress in the pharma distribution aspect of healthcare services."

Editor's note: This story has been updated.

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Melanie Blackman is a contributing editor for strategy, marketing, and human resources at HealthLeaders, an HCPro brand.

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