Publication | ThinkSet

Amazon’s Healthcare Play: It’s Exciting – But It’s Not New

Randy Moon

August 8, 2019

Big employers have been using data for years to drive innovation in healthcare. Can Amazon and its partners speed up the progress with Haven Healthcare?

Employees of Lowe’s who need heart surgery don’t simply go to their local hospital and hope for the best. The company pays for their treatment, travel and lodging at the Cleveland Clinic, home to the best cardiology clinic in the country.

The first-of-its kind offering wasn’t created by Lowe’s health insurer and didn’t result from a government program. The company’s human resources and benefits team developed it, using extensive data on their employee population, their health and outcomes from years of cardiac procedures.

That was in 2010. I joined Lowe’s as VP International HR, Benefits and HRIS in 2011, and we partnered with some other big employers—including Wal-Mart—to expand what we labeled the “Centers of Excellence” program. Again we contracted directly with the best surgical centers in the country to provide joint surgeries for our employees. Again the companies paid for the procedures, associated treatment, travel and lodging—for the employee and a companion.

That program represents a little-known but profoundly important fact about the US healthcare system: the country’s largest companies have long been the most innovative forces in healthcare. Alone and collectively, through trade groups and affiliations created for this express purpose, big employers have been using their scale, data and ingenuity to engineer solutions to some of the most stubborn problems in care delivery.

The potential for employer-driven innovation has been in the news a lot lately, thanks to one of the world’s most innovative companies. Last year, Amazon announced its intention to create a new healthcare organization, Haven Healthcare. In partnership with JP Morgan Chase and Berkshire Hathaway, their broad vision is to create better outcomes, greater satisfaction and lower costs for their US employees and families.

But is this really anything new? And if it is, what might it mean for our healthcare system?

Haven’s enormous potential—and those who paved the way

The potential here is enormous and exciting. Haven’s three corporate founders provide health insurance for 1.2 million employees collectively. Add their family members, and Haven will likely represent more than 2 million Americans—a population larger than 14 states. That will give it not only formidable negotiating power, but also a wealth of data its technologists and leaders can mine, organize and analyze to identify—and ultimately achieve—the better outcomes and lower costs they’re searching for.

But for all the buzz surrounding Amazon and Haven, this isn’t the first time a large organization has taken things upon itself or teamed with other big companies to deliver a better healthcare experience for its employees.

At Lowe’s, beyond pioneering the Centers of Excellence approach—paying for employees and their companions to visit top providers like the Cleveland Clinic for certain procedures—we also created a quality assurance program that crunched data to assess the quality of care down to the physician level, and partnered with an upstart technology company to deliver a customer experience that our insurers simply couldn’t provide.

Those programs succeed because they deliver lower costs for Lowe’s and better care for its more than 300,000 employees—and because they’re based on data, not ideology or any other distorting priorities. We created the Cleveland Clinic program because, as the data indicated, the Cleveland Clinic’s deep expertise in heart surgery—its doctors perform hundreds of the procedures every year, while local hospitals often only perform a few—vastly reduces post-operative complications and hospital readmissions.

I’ve seen other examples where big organizations drove innovation in healthcare. Groups like the HR Policy Association, American Benefits Council and National Business Group on Health have been around for years. They were all formed by large employers seeking creative, collaborative ways to combat the escalating cost of care, and to keep their workforces healthy, productive and happy.

Those employers have ample incentive to innovate. Most are self-insured, so not only are they financially responsible for their employees’ health, but they’re working with various partners to administer care and insurance. They need healthy workers to stay competitive, and offering better care makes for a powerful recruiting and retention tool.

Yet beyond the business rationales, leaders at these big organizations simply care about care. Here I speak from experience: when you’re responsible for the health of hundreds of thousands of your coworkers and their families, you’re keenly aware that your job isn’t just to drive down costs—it’s to deliver the best possible healthcare. That’s both a daunting responsibility and a profound motivator.

A new era of American healthcare?

While Amazon and its partners’ efforts to create a better care experience may not be new, they certainly holds the promise to be revolutionary.

As at Lowe’s and other large organizations, they’ll use vast amounts of data to seek and drive effective solutions. That will likely mean an improved customer experience that gives their employees more information and better tools to manage their care. It could also mean tackling stubborn challenges like behavioral health or chronic pain management.

At a speaking engagement in June, however, Chase CEO Jamie Dimon raised the stakes even higher for Haven, declaring publicly that if the venture was successful, its founders intended to make its innovations available to not just employees of the three founding organizations, but also the public at large.

If that does happen, it could open a new era of American healthcare—and a new twist on the long history of big employers driving change in the healthcare system.

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Randy Moon

Managing Director

Washington, DC