Civica Rx CEO predicts ‘stampede’ if Amazon’s Haven succeeds

By | April 30, 2019

Dive Brief:

  • Civica Rx CEO Martin Van Trieste is among the healthcare players cheering on Amazon’s bid to disrupt the industry, noting the e-commerce giant’s focus on the consumer experience and unwillingness to work within the status quo position it to succeed and be imitated.
  • “It’s going to be Amazon at the end of the day … once they do it, it’ll be a stampede,” Van Trieste said at the World Healthcare Congress in Washington, D.C. Monday.
  • Stanford Graduate School of Business professor Robert Pearl and Manatt Ventures’ technology group leader Lisa Suennen agreed, saying that government and legacy businesses alike have their hands tied by perverse financial incentives, making them unlikely candidates for disruption.

Dive Insight:

Those financial incentives contribute to widely acknowledged inefficiency in healthcare delivery, a lack of transparency and skyrocketing medical costs.

Such unclear pricing leads to “risky and unhealthy behavior,” according to a recent West Health report finding 41% of Americans reported forgoing an ER visit in the past year over cost concerns.

“It’s an inefficient industry,” Pearl said. “Disruption is inevitable.”

Whether the political will is there is another matter.

Debate around lowering costs in 2019 centers around less controversial issues, like nixing surprise medical bills, covering pre-existing conditions, lowering insurance premiums, cutting unexplainably high drug prices and promoting pricing transparency.

But two-thirds of Americans across party lines aren’t at all confident elected officials will be able to lower costs through legislation, according to the same West Health report.

“Big business is the only force in the United States that’s big enough to take on the elected officials,” Pearl said, predicting the joint Amazon, J.P. Morgan and Berkshire Hathaway venture Haven will be as big in healthcare “as Amazon is in retail.”

Together, the three giants already cover more than 1.2 million lives, giving their troika Haven significant heft as it seeks to lower employer healthcare costs. Led by Harvard Medical School professor Atul Gawande, Haven was announced in January of last year to a respectable amount of industry interest.

Concrete details remain scarce on Boston-based Haven. Gawande has reportedly been meeting with employees from the three companies over the past few months to talk about their healthcare experiences and they’ve recruited a spate of big names to Haven’s C-suite, including former UnitedHealth and Comcast exec Jack Stoddard as COO.

Haven operates as an independent entity and is free from “profit-making incentives,” according to its website, and will “reinvest any surplus back into [its] work.”

“Businesses need courage and a model that works,” Pearl said. “If [Haven is] able to do it, I think immediately what you’ll see is a cascade of people following them.”

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