20180603_biz_health_online

Warren Buffett, Jeff Bezos and Jamie Dimon have teamed up to fund a new health care system, but can they change the way health care has run in the country for so long?


In 2010, Charlie Munger sent a $20,000 check to Atul Gawande after reading a New Yorker magazine article he had written about how the medical system in McAllen, Texas, viewed patients more as profit centers than as people.

The article, titled “The Cost Conundrum,” caught Munger’s attention because it was “so useful socially,” Warren Buffett said at the time. It explained why the high-cost medicine practiced in McAllen did not yield high-quality medical care.

Munger had never met Gawande, who called the check “a flattering gesture” and gave it to Brigham and Women’s Hospital’s Center for Surgery and Public Health to pay for oxygen monitors to low-income countries.

Wednesday, the connection with Buffett and Munger, longtime partners of Berkshire Hathaway Inc., strengthened as Gawande, a surgeon, Harvard Medical School professor and widely read author on medical issues, was named as chief executive of a new nonprofit health care initiative being formed by Berkshire, financial giant JPMorgan Chase and online retailer Amazon.

Reactions were swift to Gawande’s appointment, highly anticipated since the companies announced their plans in January to reduce costs and improve the quality of health care not only for their 1.2 million employees but also in ways that would reach the entire U.S. health care system.

“You have to make the assumption, based on some of the things he’s written about, that he’s an innovator, that he can do things to change health care for the better,” said Dr. Rowen Zetterman, associate vice chancellor of the University of Nebraska Medical Center.

“This is a high-profile person,” Zetterman said. “I believe, based on his writings, he’s a well-thought-of person in various aspects of health care delivery.”

Dr. David Filipi, an Omaha physician for 43 years and medical director of a Midwestern doctors’ association, said he has read Gawande’s articles, including the “classic” article on McAllen’s medical system.

“He’s certainly a bright fellow who can articulate well the challenges that we have in medicine,” Filipi said, “but I don’t know of his abilities to bring the various parties to the table and provide that sort of leadership. This is going to be a tremendous task.”

Gawande will start July 6 as head of the yet-unnamed initiative, which will be based in Boston.

Earlier, Buffett had said getting the right person to head the effort was key to its possible success. The months-long search, led by Berkshire investment manager Todd Combs, prompted news articles saying that the job was so big that finding the CEO was difficult.

In a statement Wednesday announcing the appointment, Buffett said, “Talent and dedication were manifest among the many professionals we interviewed. All felt that better care can be delivered and that rising costs can be checked.”

CEOs Jamie Dimon of Chase and Jeff Bezos of Amazon also endorsed the choice, Buffett said.

“Jamie, Jeff and I are confident that we have found in Atul the leader who will get this important job done,” he said.

Gawande said he was “thrilled to be named CEO of this health care initiative. I have devoted my public health career to building scalable solutions for better health care delivery that are saving lives, reducing suffering and eliminating wasteful spending both in the U.S. and across the world.

“Now I have the backing of these remarkable organizations to pursue this mission with even greater impact for more than a million people, and in doing so incubate better models of care for all. This work will take time but must be done. The system is broken, and better is possible.”

Dimon called Gawande “an extraordinary leader and innovator” and added that the three companies “have the talent and resources to make things better, and it is our responsibility to do so.”

Said Bezos: “We said at the outset that the degree of difficulty is high and success is going to require an expert’s knowledge, a beginner’s mind and a long-term orientation. Atul embodies all three, and we’re starting strong as we move forward in this challenging and worthwhile endeavor.”

Gawande practices general and endocrine surgery at Brigham and Women’s Hospital and is a professor at the Harvard T.H. Chan School of Public Health and Harvard Medical School.

He also is founding executive director of Ariadne Labs, a health systems innovation center, and a staff writer for the New Yorker. He has written four New York Times best-sellers: “Complications,” “Better,” “The Checklist Manifesto” and “Being Mortal.”

Lyndean Lenhoff Brick, chief executive of the health care consultant Advis Group of Mokena, Illinois, called Gawande “an eloquent visionary. He’s a great writer, and he’s a great surgeon. He’s well-respected from the top to the bottom.”

“I’m a little bit surprised because he’s more of an academic than a businessperson, but I think it was an outstanding pick,” she said. “He has such a practical approach to health care. What I like is that he’s out front about the limitations of medicine. That’s particularly important because he’s attuned to the exorbitant cost of care at the end of life.”

The cost of end-of-life care was one point Buffett has discussed in recent months. Gawande watched his father die and wrote about it, including a New Yorker article about end-of-life medicine.

“He has such a practical, no-nonsense but yet almost inspiring view of the end of life,” Brick said. “He realizes that it’s not an appropriate expenditure of costs, and it deprives people of dignity. He balances all of these issues out so beautifully.

“I’m hoping he can take that expertise and that view to so many other issues and can translate his practical and visionary approach to all the other areas of reform.”

Brick said she expects Gawande to “surround himself with some pretty hard-nosed professionals who understand the nuts and bolts of health care — supply chain, delivery, insurance, big pharma, you name it. He’s going to be the guy out front. He’s going to be the salesman that’s going to wrap all these things up in a velvet bag and deliver it.”

Howard Shandell, a partner in the benefit consulting firm Midwest Benefit Advisors, said the new group’s goals should include aligning patients’ interests with those of the health care system, which today are often at odds.

Filipi, the medical director of the Midwest Independent Physicians Practice Association, said Gawande’s credentials as a physician give him credibility.

But making changes involving doctors, hospitals, drug companies and other groups will be difficult, he said.

“All these sectors are designed to provide profitable activity,” Filipi said. “That system’s going to have to change. So whenever you have change, you’re going to have a decrease in profits because the system is designed to develop profits the way it is.

“You’re going to have some pressures when you change from different models. People are skeptical of change.”

The Omaha World-Herald is owned by Berkshire Hathaway Inc.

Reporter - Money

Steve covers insurance, the economy and other topics, including Berkshire Hathaway, Mutual of Omaha, Blue Cross Blue Shield, business ethics the Affordable Care Act and other topics. Follow him on Twitter @BuffettOWH. Phone: 402-444-1080.

(1) comment

MARY GAUGHAN

This is so very interesting. My question is why
Amazon and Warren are involved in an area that is
so broken and complicated that no amount of money can fix it. The insurance companies and Rx firms are responsible for this, not our doctors and hospitals. They need to be cured first. This is going to be a tremendous task with a lot of fighting going on. I wish them well. Bill Gaughan - Omaha

Welcome to the discussion.

Please keep it clean, turn off CAPS LOCK and don't threaten anyone. Be truthful, nice and proactive. And share with us - we love to hear eyewitness accounts.

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