Atul Gawande/Wikimedia Commons
The joint venture launched earlier this year by Amazon, Berkshire Hathaway and JPMorgan Chase to explore new ways of lowering health care costs for their employees now has a dedicated leader. Dr. Atul Gawande, a renowned surgeon, medical researcher, and author of several highly regarded books on medicine who has also been a staff writer at the New Yorker for 20 years, will serve as CEO of the as-yet-unnamed organization, Fortune reported on Wednesday:
Gawande may come as an unexpected choice to lead this new health care company, whose aim is to decrease health care costs and improve outcomes for the approximately one million employees in the triumvirate’s workforce. He practices general and endocrine surgery at the renowned Brigham and Women’s Hospital in Boston and is a researcher and professor at Harvard’s T.H. Chan School of Public Health. …
Following the Amazon-JPM-Berkshire announcement, Gawande stated that he would continue his positions at Brigham and Women’s and Harvard and will keep writing for the New Yorker even as he takes the reins of the health venture on July 9. He will, however, step away from his role as executive director of Ariadne Labs—a company he founded that focuses on health care delivery with a global health-focused bent—to become its chairman.
Few other details are publicly known about the partnership, which was announced in January, sending ripples through the stock market as pharmacy benefit managers, health insurance companies, and biotechnology firms wondered what it would mean for them. The organization Gawande has been hired to lead is an independent nonprofit based in Boston, which is expected to focus on technological solutions, data sharing, and its participants’ bargaining power as large buyers in the health care marketplace. The organization may eventually partner with other companies along with Amazon, Berkshire, and JPMorgan.
Walmart and the mobile health management platform Sharecare announced a partnership earlier this month that will add a new element to the big-box chain’s wellness offering for its 1.5 million US employees. The partnership will give these employees, as well as their families, access to the Sharecare platform, which includes a variety of biometric data tools, an automated symptom checker to prepare for doctor visits, and tools for finding doctors and managing insurance claims. The program will first be introduced to participants in Walmart’s ZP Challenge wellbeing initiative:
Over the past four years, thousands of Walmart associates have transformed their lives by participating in the ZP Challenge, a series of 21-day programs that encourages and rewards associates and their families to improve their overall wellbeing by making better choices every day in the categories of fitness, family, food, and money. Building on the success of this initiative, Walmart will offer its associates using ZP with access to Sharecare, providing them with even more robust health and wellness resources to help them live their healthiest, happiest, most productive lives.
Walmart also will provide its associates and their families, alumni, and the community at large with full access to Sharecare to help each of them better understand, track, and improve their health, no matter where they are in their health journey.
The rollout to the full workforce will take place gradually over the coming few years, Sharecare president Dawn Whaley told Kathryn Mayer at Employee Benefit News. “We’ll start there [with the ZP Challenge], and then steadily scale over the next three years to engage more than 1 million users across the Walmart community,” Whaley said.
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Amazon, Berkshire Hathaway, and JPMorgan Chase made headlines—and sent health insurance stocks into a tailspin—when they announced in January that they had partnered to form an independent nonprofit organization dedicated to finding ways of providing health care to their employees at a lower cost. However, Kathryn Mayer at Employee Benefit News flags a new report from venture capital firm Venrock in which healthcare experts say that this partnership is unlikely to have as immediate or dramatic an impact as its founders might expect:
Of the 300 healthcare professionals, employers, investors and academics surveyed by Venrock, 73% said that the Amazon, Berkshire Hathaway and JPMorgan effort was going to take a lot longer than expected and endure many obstacles. Meanwhile, 25% said the companies “have no idea what they’re getting into.” There are a number of reasons for the industry’s skepticism, say Venrock partners Bryan Roberts and Bob Kocher.
“[One is that] many new entrants have sought to dramatically improve healthcare for many years and nearly all have failed to produce any material impact. Remember Google Health and HealthVault?,” Roberts says. “While these are all large, successful companies, they do not have any real market power in healthcare, where all leverage is locally driven.” Meanwhile, Kocher notes, the companies haven’t yet formed a leadership team.
January’s announcement reflected the pressure many US employers of all sizes are feeling as rising health care costs force many of them to shift more of these expenses onto their employees. Businesses are bracing for a further spike in costs next year, as Congress has declined to take action to stabilize the individual health insurance marketplace established by the Affordable Care Act, potentially paving the way for premium hikes of as much as 30 percent. Higher expected costs for insurers mean higher prices for group insurance customers (mainly employers) as well as individuals.
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Amazon, Berkshire Hathaway and JPMorgan Chase have announced a partnership to establish a nonprofit entity dedicated to lowering health care costs for their employees, the Washington Post reports:
The independent company would be jointly led by executives from all three companies and would be focused on technology that could increase transparency and simplify health care, according to the joint announcement. It will be free from the need to deliver a profit. … Few details were available about the new initiative, described as in the initial planning stages. The announcement comes amid anticipation that Amazon could disrupt health care as it has in other industries — sending tremors through companies that make and supply prescription drugs.
The announcement sent health care stocks tumbling, Bloomberg adds, affecting several major pharmacy benefit managers, health insurance companies, and biotechnology firms. While the details of the partnership are still sketchy, it is expected to focus on technological solutions, data sharing, and its participants’ bargaining power as large employers. The initiative may also expand beyond these three companies in the future:
When a district court in Washington, DC, ordered the US Equal Employment Opportunity Commission to rewrite its rules governing incentives for employee wellness programs last August, the court declined to vacate the commission’s current rules in order not to create disruptions in businesses that had already implemented programs based on them. The AARP, a lobbying group for older Americans and the plaintiff in the case against the EEOC, petitioned the court to amend its judgment and vacate the rules.
In its latest ruling, issued in late December, the court agreed to do so, but not until January 2019. Labor and employment attorney Jonathan E. O’Connell outlines the latest chapter of this legal drama at SHRM:
Also playing into the court’s decision to modify its prior judgement was the timeline offered by the EEOC for issuing its revised rule. The EEOC indicated that the new rule would not likely be ready until 2021. The court stated that such a lengthy delay was inconsistent with its expectation that the revised versions of the rule would be issued in a timely manner and thus also supported reconsideration of the court’s earlier decision. The court stated that “an agency process that will not generate applicable rules until 2021 is unacceptable” and strongly encouraged the EEOC to take steps to implement revised regulations faster.
Arguing on behalf of the EEOC, the Justice Department pushed back on that decision in a court filing this week, arguing that the court did not have jurisdiction to impose a deadline on the agency or force it to write new rules at all, Erin Mulvaney reports at the National Law Journal:
The US House Republican leadership’s plan to exempt workplace wellness programs from the genetic privacy protections of the 2008 Genetic Information Nondiscrimination Act (GINA) would dramatically expand organizations’ power to compel employees to share their health data with their employer. Nonetheless, Quizzify co-founder Al Lewis makes the case against exercising that power at the Harvard Business Review, arguing that trying to collect this kind of personal information about employees would be expensive:
Is there any evidence that genetic testing is effective in doubling the effectiveness of wellness programs (i.e., in improving health or reducing costs)? There is ample evidence of ineffectiveness. An Aetna study showed no meaningful change in risk factors after one year between at-risk groups that were or were not offered genetic testing, using the standard randomized control trial. Experts in the field have not endorsed the notion that genetic testing for chronic disease predisposition is effective, though that could change as the technology improves.
Accordingly, Lewis argues, the only way employers can really save money with genetic testing is “by relying on employees who resent the testing’s intrusiveness to refuse to comply”:
One vendor advertised noncompliance as a source of savings even without genetic testing. … It would be more common for employers to switch to offering a high-deductible plan that increases the annual deductible by, say, $1,000, but prevent it from looking like a pay cut by offering employees the chance to earn the $1,000 back by participating in the wellness program. On paper, that is an “incentive.” If an employee were to forgo genetic testing, they would not collect the incentive but would still have the higher deductible. …
Given the cost, lack of effectiveness, and likely employee reaction, why would an employer want to do this? In my opinion, they wouldn’t.
If GINA protections are withdrawn for employees participating in wellness programs and employers do choose to start collecting this information, Gizmodo’s Kristen Brown worries the information could be abused: