JPMorgan Chase will take another crack at fixing health care after a push with two other corporate giants dissolved earlier this year.
The bank said Thursday that it formed a new business focused on improving care provided for about 285,000 people through its employer-sponsored health plan. Morgan Health will start with $250 million for investments and a health policy veteran as its CEO, former Clinton administration official Dan Mendelson.
The announcement comes a few months after a similar venture backed by JP Morgan shut down. The bank, retail giant Amazon and Warren Buffett’s Berkshire Hathaway had formed an independent company called Haven in 2018 because health care costs and quality had become such a persistent problem for corporate America.
Haven tinkered with ways to improve primary care and also identified areas for cutting prescription drug costs before announcing its end in January. Amazon said then that Haven worked well for devising ideas, but it made more sense to implement those ideas independently.
Morgan Health leaders plan to build on what they learned through Haven and hope to make models for care improvements that other employers can follow.
But their focus initially will be making care better for the people covered under their own plan.
“That will be the lens through which we look at everything,” said Vice Chairman Peter Scher, who will oversee the new unit.
Aside from primary care, the new business also will study mental health care and ways to improve the treatment of people with chronic conditions like diabetes. Health equity will be another big focus.
Mendelson noted that all employees have the same benefits, but the company wants to address why health care outcomes can differ.
“The goal here is to ensure that health outcomes improve for minority populations,” he said.
Employers have struggled for years managing the cost of a health benefit many companies need to offer to attract and keep workers.
Employer-sponsored health insurance covers roughly 157 million people or nearly half the U.S. population, and the cost of that coverage routinely increases faster than wages and inflation.
Many companies have already tried fixing primary care, which is seen as a gateway to the health care system for patients and an important tool for keeping them engaged in their health.
Employers have built their own doctor networks, set up clinics on worksites or pushed care connections through telemedicine. Amazon, for instance, developed a virtual care program that also sends providers like nurses to patients if they need in-person care.
Health economist Paul Keckley said that if JPMorgan CEO Jamie Dimon wants to “create a better mouse trap there, he’s got a lot of catching up to do.”
Keckley also noted that it’s tough for just one employer — even a company as big as JPMorgan — to have a meaningful impact on health care costs, which vary tremendously around the country.
He said large employers need to band together in a single market in order to gain enough leverage to influence costs.
“It’s just hard for these companies to change physician behavior or hospital cost structure unless they get scale,” he said.
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