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Atul Gawande's company looks to benefit design, unsealed court testimony shows

Executive testifies that if the ideas being explored for the new company work, they could be scaled up among the venture's owners.

Susan Morse, Senior Editor

Jack Stoddard is COO of the new company formed by Amazon, Berkshire Hathaway and JPMorgan Chase.  Jack Stoddard is COO of the new company formed by Amazon, Berkshire Hathaway and JPMorgan Chase.

The nonprofit healthcare company formed by Amazon, Berkshire Hathaway and JPMorgan Chase is looking at benefit design to take cost and the complexity out of health insurance, according to unsealed court testimony  obtained by The Wall Street Journal and Stat.

Jack Stoddard, the chief operating officer for the new company, said the venture is asking if it can "reinvent what insurance looks like in terms of benefit design," according to The Wall Street Journal. The venture is also looking at pharmacy costs, Stoddard said, but has no plans to compete with existing pharmacy-benefit managers.

Stoddard testified in Massachusetts District Court in Boston last month, in the case of a lawsuit brought by Optum against former employee David Smith, who went to work for the new company.

Optum filed for a temporary restraining order to prevent Smith from working for the company it calls "ABC." Optum said going to work for what it deemed a competitor violated his non-compete agreement. The court has yet to make a ruling.

An Optum memorandum speculated that ABC would very soon be a direct competitor, if it was not providing competitive services to Optum's clients already, according to court documents.
Stoddard denied that ABC would be a competitor to Optum.

Smith, former vice president of Product/Corporate Strategy for Optum, said in previously released testimony that he expected his new role would be in-depth research on the delivery and costs of healthcare for the 1.2 million lives covered at ABC. The new venture expected to test new ideas this year for its employees. 

One goal just released is to bolster the importance of primary care and to make access to care easier, Stoddard testified, saying, the venture wants to "make it easier for doctors to do good care and to spend more time, not less time," providing care, according to the WSJ report.

The company's CEO is Atul Gawande, a surgeon and author, who in a New Yorker article published this past November, criticized the administrative burden placed on physicians by their EHRs.

WHY THIS MATTERS

Gawande and the CEOs of the three companies have released so little information about their healthcare company since forming it last year, that any bits that trickle out, such as that in the recently opened court testimony, is examined for clues.

The industry sees Amazon as a major disruptor, and is looking to see if the new company - which has yet to have a name - has plans that could be extended to other employers and healthcare systems.

Stoddard reportedly said that if the benefit design ideas work for the new company, they could be scaled up among the venture's owners, according to the WSJ report.

As with many healthcare companies that are looking for better outcomes and decreased spending, the startup wants to analyze data for variations in care, both in price and performance.

WHAT ELSE

The new health venture had sought to keep part of Stoddard's testimony private. The sealed testimony came to light after The Wall Street Journal and Stat asked for it to be made public.

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com

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