Haven Failure a Reminder of Health Reform Pitfalls

Lost amid last week’s existential threat to democracy was the announcement that Haven, the heavily hyped 2018 health care startup, would be ceasing operations.

Nearly three years ago, Amazon, Berkshire Hathaway and JPMorgan Chase announced they would build an independent health company to explore better and cheaper ways of delivering health care, at first to their more than one million employees and perhaps later to other health providers and consumers. Health insurance stocks shuddered at the prospect of a well-funded new entrant that might introduce reforms that would hurt that industry.

Health stocks took another hit in June 2018 when the new venture selected Atul Gawande as its chief executive. A gifted surgeon, Harvard faculty member, and widely followed New Yorker writer and author, Gawande was expected to walk on water and perform miracles at the new venture, which was later named Haven.

It was, in hindsight, an impossibly high bar for anyone to leap, and neither Gawande nor Haven wound up leaping much of anything. During its three years of existence, the company did not publicly announce a single new health initiative. Gawande stepped down from the CEO role last year, leading to speculation that the venture had run its course.

“Haven’s demise demonstrates that it will take more than big names and buzz to create meaningful change,” said Kate Brown, health innovation leader at the Mercer employee benefits firm. “For the U.S. healthcare system, there’s no single solution or entity that will deliver transform our system to deliver higher quality care at lower cost.”

Given Haven’s visibility, its failure to make much of a dent in health care will foster a new cottage industry of post mortems and B-school case studies. I don’t claim any special insights but do think the venture’s fate should be a powerful reminder of how hard it is to make significant changes in the U.S. health care system.

These difficulties are laid out in my new book, and in fact were the reason I decided to do the book in the first place. Reforming health care is a process, not the act of any single legislative or corporate effort. When the Affordable Care Act (ACA) was passed in 2010, it only cleared the finish line due to big Democrat majorities in the Senate and House.

Even then, the law contained major compromises, especially the absence of a public option that would have let any consumer buy a policy from the government that covered ACA-mandated benefits. That would have been a game changer. But it didn’t happen.

Even with a more modest set of coverage innovations, it took four years to implement the ACA, and it still generated enormous turmoil in insurance markets and public confusion. Keep in mind the ACA involves 20 million persons – a big number but only about one in fourteen (7 percent) of those in the U.S. with health insurance.

Imagine what it would take to reform health care for the other 93 percent and you’ll have some idea of the enormous mountain that needs to be scaled to cover more people, lower health costs, and improve quality.

Extended Medicare to those aged 60 to 64 isn’t even a steep hill in comparison. Medicare for All would get closer but there is scant evidence it would make much of a dent in U.S. health costs, which were $3.8 trillion in 2019 – twice as high per person as in any other country that is comparable to the U.S.

Smart and powerful health care interests – insurers, pharmaceutical and medical equipment companies, and hospitals and doctor firms and lobbies — will block the way to even modest reforms.

Faced with such daunting opposition, waiting for health reform is even more exhausting than Waiting for Godot. The good news, explained in only 355 pages in my book, is that consumers do not need to wait. We can reform our own health care right now, using new tools and mountains of research that can improve our access to care that is better and cheaper than what many of us can now find.

This consumer-led revolution will not be easy or quick. But it has the potential to help us achieve our health care goals more quickly than relying on government reforms. Or on Godot.