News 1/6/2021

BenefitsPro: Goodbye, Haven: The Benefits Industry Reacts

When Amazon, JPMorgan Chase and Berkshire Hathaway announced three years ago they would be joining together on a venture to reimagine employer-sponsored health care, they had our ears. They had industry clout, a reputation for innovation, and, perhaps most importantly, financial leverage.

Unfortunately, the venture has produced none of the massive disruptions many had (perhaps overly optimistically) hoped for. More pragmatic individuals recognized the monumental undertaking was riddled with obstacles and were not surprised to hear Haven would be throwing in the towel.

Here’s just a sampling of what those in the benefits industry have to say:

Health care needs a chisel, not a sledgehammer

“Initially, I was excited to see what Haven’s end solution would look like, particularly to see how and if they would do anything different from what other forward-leaning advisors are doing. Many were optimistic that the Manhattan Project-style approach would be a solution to rush to the aid of their own populations and even gig economy workers, while others realized early on that the many layers of conflicts of interest could become troublesome. For me, seeing Dr. Atul Gawande step down as CEO last year was a warning that Haven’s existence could be short-lived. Tackling a healthy slice of the GDP doesn’t come without repercussions to individuals, investors and organizations that are named daily in financial publications.

“We may never know whether Haven died of indigestion of trying to solve the health care puzzle, (or maybe it was Colonel Mustard with the candlestick that did them in?) but my money would be on a combination of the two. For me, the main takeaway remains that a boulder-sized problem as big as health care cannot be solved with an equally sized sledgehammer solution. It is best done in moderation with a chisel, and over time.”

Derek Winn, co-founder and president, Distilled Concepts

Amazon races ahead

“Having closely covered both the joint venture (Haven) and Amazon independently over the last 24 months, it’s become clear that Amazon and the other two companies involved in the joint-venture were on different trajectories as far as what they wanted the outcome to ultimately be and how rapidly it could be implemented.

“I believe now, without the confines of the Haven relationship, Amazon will move forward independently at a very rapid pace, as they have been continuing to build and own assets to deploy under the Amazon logo. Within the last year, Amazon has already started to provide a health care plan option for its employees in Ohio and integrated an online pharmacy that they purchased in their larger Amazon website marketplace. These are just a few of the pieces they have built or acquired during roughly the same timeframe that Haven has been in existence.”

Mick Rodgers, managing partner at Axial Benefits Group

A problem too big to solve?

“I find it very curious that Haven is disbanding. There are a couple of thoughts that immediately come to mind.

“First, I believe, at least partially, it is a clear indication of just how big of a challenge it will be to fix our broken health care system. It’s no secret the system is broken; it’s not even a real secret what is broken about the system. In fact, it isn’t even a mystery as to what solutions are needed. The challenge is in how to untangle all the disgusting webs that work to drive up costs and allow waste, fraud and greed to be perpetuated.

“Haven was made up of some of the brightest business minds of our time; they have smart teams and unbelievably deep pockets. Perhaps outsized egos led them to believe they could fix it by sheer force. Perhaps it’s humility (protecting their egos from an eventually failed effort) that is causing them to give up so quickly.

“One thing is certain, it’s not a lack of money, voice, or influence that is causing them to shutter the Haven doors. I only hope it isn’t recognition and belief that this beast truly can’t be tamed. It concerns me that the problem could be viewed as so unfixable that they would give up so soon.

“One other possibility is that they were never really interested in ‘fixing health care’ in the first place. This may have been an opportunistic ego-stroking move they seized as they pursued their real motivation, which may have been to merely fix health care for themselves. Imagine the competitive advantage this would give them over those stuck in a broken system.

“I felt from the beginning that this trio’s best chance to contribute to fixing health care was to be a spotlight shining on both the darkest corners and brightest platforms of the system. If they had used their influence to call out the bad players; if they would have helped celebrate the successes that many advisors are already putting in place for their clients, they may have been able to truly move the needle.

“All that said, don’t count these guys out yet.”

Kevin Trokey, founding partner and coach, Q4intelligence

Hard to break the status quo

“This is sad to hear, but not surprising. I think we were all hoping to see what they could accomplish with the size and leverage of their organizations. However, my hopes were diminished when they announced their partnership with CIGNA and Aetna. At that point, it sounded like more of the same status quo rather than revolutionary invention and entrepreneurialism that we see from Amazon.

“I think it shows insight into how difficult it is to create meaningful change in health care when it makes up roughly 20% of the nation’s GDP. For an organization or entity to do so, it takes a willingness to challenge the status quo and compete viciously for the paychecks of the American worker. Health care has been robbing all Americans of compensation for the last 15+ years as wages have remained stagnant relative to the cost of health care and benefits.

“This reinforces my belief that the change in the health care landscape is either going to happen at the local level through brave, driven, and committed advisors and employers, or by those select few who can cast votes in Washington D.C. I think there is a place for both of those things to happen, but that requires both parties to act. We need advisors and employers to continue to step up and champion the cause.”

Ben Conner, CEO, Conner insurance

No surprises here

“To be honest, I’m not sure how anyone can make too many comments considering the vagueness of what was released to the press. I think the bottom line is that they found out that health care was complicated….shocker.”

Susan L Combs, founder, Combs & Company

Small-scale successes

“Nearly three years after the huge announcement with that three mega-corps would band together to fix health care, we find out that Haven is disbanding. Surprising? Not really. Health care is a $3.7 trillion industry. Most cannot comprehend just how large that is. Removing the waste, the abuse, is no easy task when you consider that the industry will go down fighting to keep their slice of the pie. Too, this ABC venture has deep roots in the existing health care ecosystem. Consider Amazon’s recent expansion into retail pharmacy – essentially plugging into the existing infrastructure versus disrupting and disintermediating it.

“The good news is that American businesses don’t need nearly this type of scale nor capital to transform the way health care is purchased and delivered to their people. There is a large grassroots movement across the country of both small and mid-sized companies that have taken back control of their health care dollars. Companies like Keystone Technology in Eureka, MO with just 20 employees that for 3 years straight have seen their costs go down by over a third and their benefits improved with it. Or Shine Solar in Rogers, AR whose employees rang in the New Year with a $0 deductible and premiums slashed in half. That’s the change happening across the country and the solutions are replicable.

“Employers embracing this type of change and those excited about the opportunity to take back control of this massive investment in health care will be well-positioned for incredible growth, talent attraction, and profitability. There’s no need to wait for a mega-deal among corporate giants to figure out our health care woes. Evidence-based solutions to provide better benefits, better health outcomes, and improve costs for both company and employee already exist. It just takes common sense and will to take the first step.”

Adam Berkowitz, founder & president, Simpara HR

Turning inward

“The Haven health venture and the publicity surrounding it shone a light on the critical role employers play in funding the health care system and generating innovation that can benefit employees and the public at large. But health care delivery is primarily regional, so it’s not a surprise that these companies are pursuing projects tailored to their own populations.”

–Candice Sherman, CEO, Northeast Business Group on Health

Cooperation, not disruption

“Haven’s decision to cease operations proves just how hard it is to disrupt the health care system in America. Even three of the largest and most influential employers in the country found the challenge a very steep one. We share with Haven’s founders the conviction that employer sponsorship is key. HTA’s experience is that when employers themselves cooperate in the development of health solutions, augmented by like-minded health care partners who possess the ability to negotiate and enforce contracts, companies and employees save money while delivering providing equal or better care.”

–Rob Andrews, CEO, Health Transformation Alliance

Aiming at a moving target

“Employers have been struggling for decades to get their arms around and control rising health care costs. While Haven doubtless generated many good ideas for doing so, putting ideas into practice is truly individual to each organization—there is no one ‘right’ solution for every employer just as there is no ‘right’ plan for every employee. And it’s certainly difficult to change a moving target—the industry has changed dramatically in just the few years Haven was in existence, in response to new government regulations, economic pressures and of course COVID.”

–Kim Buckey, vice president of client services, DirectPath

Gone, but not forgotten

“I have always liked the idea of having employers come together, not to just disrupt, but rather restructure health care from delivery to financing. National initiatives are always a challenge for two main reasons. First, health care is always a local delivery and locally financed industry. Secondly, the challenge is always in aligning interests and goals. While this particular venture with Amazon, JPMorgan and Berkshire Hathaway may be disbanding, there will be other employer-sponsored initiatives in the future. The good news is that the disbandment will not cause any disruption in the industry.”

–Perry Braun, executive director, Benefit Advisors Network

All eyes on Amazon

“We’ve been watching for signs of positive disruption from Haven since the joint venture was announced in 2018. In particular, their stated approach to think first about the employees of the three participating organizations piqued our interest. In complex systems like US health care, there’s no single solution or entity that will deliver higher quality care at lower cost. While we believe employers do have the power to change the health care system for the better, it requires large numbers of employers working toward common goals, and rewarding the health plans and providers that deliver higher-value health care.

“It remains to be seen if Berkshire Hathaway, JP Morgan Chase or Amazon take action in the health care arena. In particular, we’ll be watching Amazon, who has recently launched “Amazon Pharmacy”, and is rumored to expand their current employee program for virtual care, “Amazon Care” to other employer plan sponsors. If Amazon can bring about even a fraction of the innovation it brought to e-commerce, the health care system should be watching.”

–Kate Brown, Center for Health innovation leader, Mercer

Lessons learned

“The bar was high given the success of Haven’s founding companies. So the inability for Haven to holistically disrupt the health care system is not only troubling but is a reflection of the depth of the challenges to do so. We hope they will share lessons learned or roadblocks they faced, to support those of us in the benefits industry who continue to work toward more affordable and accessible care for all.”

–Sherri Bockhorst, SVP of innovation and strategy, Businessolver

Baby steps

“Haven didn’t work because tackling health care doesn’t require three companies — it requires all companies. For better or worse, our health care system is built around employer-sponsored plans. While Amazon, J.P. Morgan, and Berkshire Hathaway each employ large, diverse workforces, I think Haven leaders underestimated the challenges of offering a single health plan or provider system. The majority of companies aren’t ready for that disruption, nor does it address the different health concerns employees have across the country.

“Tacking employer-sponsored health care also requires focus and gradual shifts. What I have learned from starting HealthJoy and working with employers is we, as in the health benefits industry, need a cohesive obsession for offering high-quality, affordable care to employees. We also need a focused long-term vision to provide a model employers need and in a platform employees will actually use. We have to improve our health care system one step at a time, and I think Haven bit off more than they could chew.

“However, Haven was successful in exposing some very critical cracks in how employees consume health care. This is part of the reason why we’re seeing an influx of employers and insurers turn to telemedicine right now. They’ve realized it actually works as a way to help address the immediate disparities in care while also mitigating costs at the employer and member level.

“Looking ahead, the next step we have to take in improving employer-sponsored health care is employee empowerment. Today, the majority of virtual care tools capture those who are already engaged enough to research their health options. But when tools become accessible and approachable by those who wouldn’t have otherwise had the skills to navigate the health care system or have the health literacy to act, that’s when there is potential for larger impact for employers and their employees.”

–Justin Holland, co-founder and CEO, HealthJoy

Read the article here

(BenefitsPro editors)

The 2021 Benefits Broker: Year-round Strategies to Keep Employer Costs Down During a Pandemic
The 2021 Benefits Broker: Year-round Strategies to Keep Employer Costs Down During a Pandemic
Download Report