Everything about Amazon.com Inc., Berkshire Hathaway Inc., and J.P. Morgan Chase & Co.’s enigmatic effort to reduce health care costs has been unusual.
On Wednesday, the triumverate stuck to their strange guns by picking renowned surgeon, writer and Harvard public-health researcher Atul Gawande to run their new company.
It’s easy to peg the choice as something of a victory for incumbents. Gawande is brilliant. But he has no experience in managing a large organization, or in the practical aspects of managing employee health care costs. He’ll face a steep learning curve. And it’s still unclear what this organization will actually do beyond producing buzzword-laden press releases.
But it’s hard to imagine a more fascinating person to empower with the combined resources of companies worth $1.6 trillion and a long leash. Tangible results may take longer than they would if an industry insider were to take charge, or if the venture were to narrowly focus on something like drug costs. But they are likely to be much more interesting.
If Gawande lacks a conventional resume for this job, the one he has should still do nicely. He’s spent years grappling with issues that have caused health care spending to spiral in the U.S without much improvement in outcomes. These include things like overtreatment, overdiagnosis — and the bad incentives that encourage it — geographic disparities in cost and outcomes, and outsize spending on end-of-life care.
Gawande hasn’t just spent time pondering the issues. In 2013, he founded Ariadne Labs, a joint effort by Brigham and Women’s Hospital and Harvard’s public health school aimed at figuring out practical ways to reduce health care costs and improve outcomes around the world. One prominent byproduct of their efforts is the creation of a surgery checklist that can help substantially reduce the likelihood of post-operative complications.
If Gawande gets autonomy and support to take a similar tack with this joint venture — to test scientifically sound, data-focused, and potentially scalable interventions in different areas of health care — it could have a far-reaching impact.
That said, the venture won’t change from a collection of industry talking points into something real overnight.
Approaching the cost problem from the employer perspective is going to be novel for Gawande and comes with complications and constraints. If Gawande’s efforts anger employees — a real possibility, given the tendency of cost-saving interventions to reduce choice— the companies funding him may not like it. Figuring out novel insurance designs and new provider relationships or whatever else Gawande ends up doing will be challenging within that context.
But at the end of the day, giving the keys of this initiative to someone who has devoted his career to intelligent efforts to make health care less wasteful, cruel and stupid is likely to pay dividends.
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Max Nisen is a Bloomberg Gadfly columnist covering biotech, pharma and health care. He previously wrote about management and corporate strategy for Quartz and