|Nataly Kehyayan, Staff Writer|
The End of Haven: A Short-Lived Attempt at Revamping American HealthCare
Back in January of 2018, three corporate giants, Amazon, JPMorgan Chase, and Berkshire Hathaway announced a new non-profit, health care joint venture for their employees. In 2019, the venture was officially given the name Haven Healthcare. The initial goal of the project was to provide affordable health care to employees with the possibility of an expansion in the future to serve more businesses and Americans.
Three years later, on the first week of 2021, the company website directs users to a PDF that reads: “In the past three years, Haven explored a wide range of healthcare solutions…Moving forward, Amazon, Berkshire Hathaway, and JPMorgan Chase & Co. will leverage these insights and continue to collaborate informally…Haven will end its independent operations at the end of February 2021”.
Now that the venture has been terminated, in hindsight, Haven is seen as an “incubator of ideas” where ideas were tested and experimented on with results that are, according to insiders, invaluable. There aren’t many tangible implementations of these ideas that can be evaluated, other than a few small-scale changes in employee health programs. Nevertheless, the companies do not plan on completely abandoning the health care business especially during a time when it is a crucial component for employers and employees. Some of the new health care solutions that the three employers now provide, inspired by Haven, focus on transparency, affordability, and simplicity.
Despite the amount of capital and power that these leading players hold, it is still a daunting challenge to transform and reinvent the American health care system. Although there is no single reason that could explain why Haven had to pull the plug, it is clear that the problem at hand is not due to the lack of effort or resources.
When the market heard about the venture in 2018, major pharmaceutical companies and distributors’ stocks plummeted as investors expected Haven to disrupt the industry. CVS Health Corp. took a 4.1% hit, while Walgreens Boots dropped by 5.2%. Shares of these firms and other health care providers like UnitedHealth Group went up by +2% as a result of the recent news. Though this is good news and a relief to competitors, it does not necessarily mean the coast is clear.
Independently, Amazon has already been rapidly penetrating the healthcare industry by purchasing PillPack back in 2018, a few months after talks about the venture circulated, initiating Amazon Care in February 2020 for its employees, and finally launching Amazon Pharmacy in November to handle Prime members’ medical prescriptions. The latter caused another decline for CVS (8.6%) and Walgreens (9.6%) stocks as the competition intensifies. Amazon might soon start exporting Amazon Care services to other companies.
Berkshire Hathaway, too, has been investing heavily in healthcare-focused companies like Pfizer and AbbVie. This situation could also be viewed as a conflict of interest for the multinational holding company, especially considering Buffett’s large stake in DaVita Inc, which would be positioned as a competitor to Haven Healthcare. JPMorgan, on the other hand, has become more involved in telemedicine, boosted by an increase in demand for the service due to the pandemic.
As said before, this is most definitely not the last of the attempts made by US companies to take matters into their own hands to improve the deficiencies of the American health care system. There is an unsustainable imbalance in the increase in wages and insurance premiums in the United States that will need to be addressed in one way or another. While paychecks have increased by 27% over the past 10 years, insurance premiums have become 55% more expensive. Americans can expect to see more from these companies in the future, especially Amazon, as healthcare will likely remain a focal point after the COVID-19 crisis for businesses and the government.