The FAMCare Blog

Our Faltering Health Care System

Posted by GVT Admin on Jul 5, 2018 10:56:00 AM


Without continued congressional support and a national commitment to succeed, The Affordable Care Act will eventually falter.  Why has it been so difficult for the United States, the greatest industrialized nation on earth, to provide affordable healthcare for all its citizens? Is it political polarization, philosophical divides, economic conundrums, relentless costly innovation, government regulation, professional posturing, or a combination of all these factors that has prevented every administration since Franklin Roosevelt from tackling the problem?


Warren Buffet, Jeff Bezos, and Jamie Dimon, the three most iconic business leaders in America today, announced that they have joined forces to take a shot at it. Even in the absence of further details, I daresay this is the best news for American healthcare since Henry Kaiser persuaded Dr. Sidney Garfield to open a prepaid practice for his construction workers building the Grand Coulee Dam in 1938. That leadership decision, of course, was the beginning of what eventually became Kaiser Permanente, the largest not-for-profit health maintenance organization in the United States.

Amazon, Berkshire Hathaway, and JPMorgan Chase aim to launch a joint healthcare venture that is expected to be “free from profit-making incentives and constraints.” This new joint venture, which has yet to be named or incorporated, will be based in Boston and led by surgeon Dr. Atul Gawande.

In 2009, Dr. Gawande received a surprise check for $20,000 as a token of gratitude from an executive in Warren Buffett’s inner circle for an article entitled “The Cost Conundrum” that Dr. Gawande had written in The New Yorker. The article was an analysis of why ballooning healthcare costs in the US were not matched by commensurate gains. Gawande wrote:

“Virtually every family in the country, the research indicates, has been subject to over testing and overtreatment in one form or another. The costs appear to take thousands of dollars out of the paychecks of every household each year. Millions of people are receiving drugs that aren’t helping them, operations that aren’t going to make them better, and scans and tests that do nothing beneficial for them, and often cause harm.”

Dr. Gawande returned the check only to receive two in return. He subsequently donated the $40,000 to charity. Apparently, this episode seeded the announcement that Dr. Gawande, an  endocrinologist and surgeon at Brigham and Women’s Hospital and a professor of public health at Harvard, will be the chief executive of the new not-for-profit healthcare venture funded by Amazon, Berkshire Hathaway, and JP Morgan Chase.

A Beginning

The joint healthcare venture will focus on a number of key areas:

  • How to reduce expenses due to waste, administration, and fraud.
  • How to better align incentives.
  • How to help employees make better health care choices.
  • How to develop better wellness programs.
  • How to reduce costs in high-cost areas such as specialty care.

From a Business Perspective

At Harvard, Dr. Gawande and his associates have taken a business approach to healthcare that, of course, fits with the “world-view” of Buffet, Bezos, and Dimon. They focus on evaluating and crafting business models that attain alignment between an entrepreneurial health care venture and the six factors that critically shape new health care ventures:

  1. Financing
  2. Structure
  3. Public Policy
  4. Consumers
  5. Technology
  6. Accountability

Hopefully, this “business-like” approach to healthcare will reveal efficiencies that produce positive healthcare outcomes at a fraction of the current cost. With powerhouse business intellects like Warren Buffet, Jeff Bezos, and Jamie Dimon jointly dedicating themselves to success, we are at a flexion point in American healthcare. A solution to the persistent affordability problem that has vexed administrations for almost a century will begin to emerge. Stay tuned.

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