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Haven, the joint healthcare venture between Amazon, JPMorgan, and Berkshire Hathaway, is shutting down.

The company told employees on Monday that it would disband by the end of next month, CNBC reported. Brooke Thurston, a spokesperson for Haven, confirmed the news to Business Insider in an email.

Haven was announced in January 2018 with a cryptic press release about solving the embarrassing cost of healthcare in the US. The three giants would form an independent company "free from profit-making incentives and constraints," it said. Using their combined resources, Havenwould come up with tech-savvy answers to healthcare problems, bringing down cost and giving member employees access to great care.

Dr. Atul Gawande, healthcare rockstar and author of "Being Mortal," was hired as Haven's CEO the following June. In the months that followed, Gawande still wasn't sure what he wanted Haven to do, saying months later at the 2018 New Yorker festival that perhaps the company would focus on middle class employees who didn't qualify for federal assistance, but couldn't afford commercial insurance.

It took another year before Haven, which wasn't named until 2019, got its first test project off the ground. That short-lived effort was ultimately defunded, which Gawande told employees was thanks to the coronavirus pandemic. During Haven's short tenure, it also faced lawsuits from rivals, lost top leadership, and ultimately couldn't settle on a direction, showing once again thathealthcare in the US is a network of problems that is difficult to solve.

The industry had high expectations for Haven.

Stocks of healthcare companies plummeted on the day JPMorgan, Berkshire Hathaway, and Amazon announced the joint venture in 2018, as investors feared that the massive employers would have success in reducing the $3.8 trillion the country spends on healthcare each year, more than 20% of which is waste, estimates indicate.

Haven, however, never came up with an answer as complicated as the problems it was trying to solve for employees based all around the country in a range of different jobs from warehouse workers to Wall Street bankers.

"Haven's founders tested the hypothesis that innovation in healthcare can be adopted at scale, and on the same pace, across different local and regional environments in the US," Tom Cassels, president of Rock Health, told Business Insider on Monday.

"It turns out that one size doesn't fit all when it comes to what individual employers want to stand behind and what their employees personally value," he said.

In a statement, Haven's Thurston said that the three companies would continue to work together loosely in pursuit of their individual ideas, depending on what makes sense for their employee populations.

When Haven was announced, Warren Buffet said that the "ballooning costs of healthcare act as a hungry tapeworm on the American economy" in a statement. The new company was supposed to do something about that with technology, and not many other details were provided in 2018 or since.

That might've been Haven's first blunder. It was formed without a clear mandate and promised an abundance of resources, but good will from the founding companies soon burnt out.

Read more: Amazon wants to build a medical care empire. Here's what that means for Haven, Amazon's joint venture with JPMorgan and Berkshire Hathaway that set out to fix healthcare.

Gawande, who was passionate about primary care, led the company towards its first big pilot. Codenamed "Starfield," Haven stood up an app that would connect employees to a dedicated primary care team, as The Information's Paris Martineau reported in July 2020.

Starfield, launched in November 2019, was expensive to build and similar to other telehealth apps, which embarrassed employees and bothered executives at the founding companies, The Information reported. But ultimately it's downfall was two-fold: an intense culture of secrecy, per that report, and an unfriendly relationship with Amazon, Business Insider found.

When it came time to roll out the app to JPMorgan Chase employees based near Columbus, Ohio, Haven didn't widely market the service because executives were wary of leaks to journalists. As a result, there was little engagement. Just two months prior, Amazon added to Haven's difficulties with the public launchof its own primary care service, Amazon Care.

Amazon Care connects eligible Amazon employees to home visits, remote care, and prescription delivery. Just like Haven, it's tech-friendly and works with a mobile app that's built around preventive care. The thinking is that better access to care on the front-end should limit pricey emergency room and urgent care visits.

Haven employees were shocked when they learned about Amazon Care through news reports in September 2019, according to The Information. But Amazon was working on the program long before Haven came along, two people close to Amazon told Business Insider.

"No one at Amazon was happy about Haven because it was a shot across the bow from Bezos that the internal team wasn't doing its job to control costs," a person familiar with the matter said. "Hence, everything Haven brought them was dead on arrival."

Soon after Starfield's launch, Haven began to lose funding, according to The Information.

Read more: Amazon wants to provide medical care to workers at major companies. Here's an inside look at Amazon Care.

In its short life, Haven lost a number of top leaders.

Jack Stoddard, Haven's chief operating officer, left in June 2019. Stoddard now serves as executive chairman of Eden Health, a startup focused on primary care.

Read more: A former top exec at the JPMorgan-Amazon-Berkshire Hathaway healthcare venture shares the 3 reasons he joined a primary-care startup as executive chairman

There was a score of layoffs in the beginning of 2020, followed by the shuttering of Starfield in April, The Information reported. In May, Gawande left his post as CEO. Serkan Kutan, Haven's chief technology officer, left in August 2020 for telehealth company Amwell, according to his LinkedIn profile.

Gawande became chairman of Haven's board and said his departure from the CEO role would allow him to focus on the coronavirus pandemic.

"This will elevate my focus from daily management to supporting Haven's strategy, board, and leadership. It will also enable me to devote time to policy and activities addressing the immediate and long-term threats to health and health systems from COVID-19," Gawande said in a statement at the time.

Since, Haven wasn't able to find a new CEO with fresh ideas or recruit top notch executives after the exodus that summer and spring.

The company told Business Insider that it shifted its focus away from primary care, without providing further details, in December. Mitch Betses, a longtime CVS Health executive, was brought on in March as chief operating officer, and took over Gawande's responsibilities when he left in May.

Some thought that Haven, under Betses' leadership, might turn to the too-high cost of prescription drugs for its founding companies. Instead, the upstart never recovered from a failed primary care project that divided leadership and ran head-first into Amazon's ambitions.

Read the rest here:
3 reasons why Haven, Amazon's joint healthcare venture with JPMorgan and Berkshire Hathaway, was doomed from the start - Business Insider