Newly released court documents paint the clearest picture yet of what the joint health-care venture between Amazon, J.P. Morgan and Berkshire Hathaway is up to.
The three companies created the still-unnamed, not-for-profit joint venture in January 2018. Since then, the venture, known as ABC, has named renowned surgeon, author and speaker Dr. Atul Gawande as CEO and has started filling its executive ranks.
It hasn’t, however, given much insight into what exactly it’s trying to do other than lower health-care costs for the three companies and their more than 1.1 million employees.
Some of ABC’s priorities were revealed Wednesday when sealed testimony in a court case was made public by a judge. Chief Operating Officer Jack Stoddard’s testimony last month highlights ABC’s ambitions: to make health care easier to understand, less expensive and ideally produce better outcomes for employees. It suggests the venture wants to work with existing players such as insurers, providers and pharmacy benefit managers rather than uprooting them.
“We’re looking, we’re analyzing, we’re assembling, we’re partnering,” Stoddard said, according to a transcript of his testimony. “And any company that leans in and wants to help us with this, the competitors, are the kinds of companies that we would love to do business with.”
Stoddard’s testimony comes from a case in which UnitedHealth Group‘s Optum unit is accusing a former executive of stealing trade secrets and taking them to his new employer, ABC. The sealed testimony was made public Wednesday following a motion from The Wall Street Journal and STAT News.
In his testimony, Stoddard said ABC is primarily focused on “things around insurance complexity.” For example, the venture is exploring whether it can “reinvent what insurance looks like in terms of benefit design,” he said.
ABC’s backers — Amazon CEO Jeff Bezos, J.P. Morgan CEO Jamie Dimon and Berkshire Hathaway CEO Warren Buffett — “are incredibly allergic to market inefficiencies,” Stoddard said. One area the venture wants to learn more about is the pharmacy.
ABC has “no plans” to compete in the space, Stoddard said. However, it will look at “how the pharmacy works” and “what are the opportunities for big employers to actually get a better understanding of what a drug should cost, and how do we help patients afford them and stay compliant.”
The venture will explore whether it can contract with existing pharmacy benefit managers to get more transparency and to actually understand what the costs are, he said.
Executives are also looking at how the venture can “make primary care more central in health care and how it can make it easier for doctors to do good care and to spend more time, not less time,” Stoddard said. The group will study which health solutions exist and how it could bring them together to make its employees healthier, he said. He cited examples such as maternity, cancer and musculoskeletal care as areas it may analyze to see what works and how it can bring solutions together for employees.
However, Stoddard noted it’s possible the venture’s priorities may change since the company is at such an early stage.
Optum is attempting to block former executive David Smith from working at ABC. The presiding U.S. District Judge, Mark L. Wolf, on Wednesday said he expects to rule Friday on whether to grant a temporary restraining order that would block Smith from joining the venture.
A spokeswoman for ABC declined to comment.
