Amazon's joint venture with JPMorgan and Berkshire Hathaway set out to fix healthcare. But Amazon was secretly working on its own idea before Warren Buffet came knocking.
- Amazon, JPMorgan, and Berkshire Hathaway launched a joint healthcare venture in 2018 aimed at reducing healthcare costs for the founding companies called Haven.
- But it turns out that Amazon was already working on its own idea to do just that, Business Insider has learned.
- Called Amazon Care, the budding medical services business serves internal employees but hopes to expand nationally.
- The company's investment in Amazon Care could shed further light on why, among the founding companies, Amazon has been the slowest to commit to Haven's projects, according to The Information.
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In January 2018, Amazon, JPMorgan, and Berkshire Hathaway launched a healthcare joint venture that was later named Haven.
At the time, Warren Buffett memorably said that the ballooning costs of healthcare act as a "hungry tapeworm" on the US economy. Haven would combine the founding companies' resources to come up with innovative ways to do something about it.
But Amazon and Haven were always destined to clash, because Amazon had its own vision to cut healthcare costs long before Buffet came knocking, two people close to Amazon told Business Insider.
Business Insider has discovered that the $1.6 trillion retail and technology giant wants to provide medical services to other companies. Called Amazon Care, the business currently provides online and in-person visits to Amazon employees, but plans to expand nationally, five people said. They asked not to be named because they were not authorized to speak publicly.
Read more: Amazon wants to provide medical care to workers at major companies. Here's an inside look at Amazon Care.
With its app-based approach to primary care, Amazon Care had a similar approach to one of Haven's pilots in 2019. The Haven pilot also aimed to use a mobile app to connect employees to primary care teams, as The Information's Paris Martineau reported in July.
Haven told Business Insider that its founding companies, including Amazon, were supportive.
"Our Founders are aligned on our priorities and programs," a spokesperson at Haven said in an email. "It's not accurate to say that they have been slow to collaborate or commit."
Amazon Care was already in the works when Haven showed up
One person close to Amazon Care said that Amazon has been slow to commit to Haven's projects, because some of its internal executives wanted to bring their own solution — Amazon Care — to CEO Jeff Bezos.
Amazon's human resources department had a team working on Care before the upstart came into the picture, a person familiar with the matter told Business Insider.
"No one at Amazon was happy about Haven because it was a shot across the bow from Bezos that the internal team wasn't doing its job to control costs," they said.
Amazon Care is a product both of Amazon's corporate human-resources department and of Grand Challenge, a secretive group within Amazon that takes on bold projects that can be out of step with the company's main business, Business Insider has discovered.
The initial idea was incubated in HR before Haven came along, a person familiar with the matter said. The employee pilot, however, didn't begin until 2019.
Amazon Care's boss is Kristen Helton-Lloyd and she reports to Babak Parviz, who heads Grand Challenge, Business Insider has learned. The health service is known internally as one of Grand Challenge's "flagship" products, as the clearest example insiders can point to of an idea spearheaded by the group that's working and growing, someone close to Grand Challenge said.
Amazon did not address Business Insider's request for comment about Haven, but said that Amazon Care is a healthcare benefit pilot for Amazon employees in the state of Washington.
"We do not comment on rumor or speculation," an Amazon spokesperson said in an emailed response.
Haven has shifted away from primary care
With backing from top execs like Parviz and Beth Galetti, a senior vice president of HR at Amazon who also sits on Haven's board of advisors, Amazon Care has internal support from corporate, three insiders said.
Meanwhile Haven employees were blindsided and troubled when they read about Amazon Care in the news last year, Martineau reported.
Haven's had a difficult couple of years. It's losing the levels of financing it enjoyed in 2018, The Information reported, as well as key leaders like Dr. Atul Gawande, the former CEO. Tensions have escalated between Haven and the founding companies, and Amazon in particular has been the most reluctant to make commitments to Haven, according to The Information.
Mitch Betses, a longtime CVS Health executive overseeing part of the pharmacy-benefits business, joined Haven as COO in March, the company said. After the departure of Gawande in May, Betses has been managing daily operations at Haven.
Haven is now shifting away from primary care, the company confirmed to Business Insider, and the addition of Betses could signal that Haven could tackle the too-high cost of prescription drugs for its founding companies.
But Haven and Amazon Care may share more in common than just their initial focus: Amazon, too, is up against pressures to scale from a corporate team that judges success in terms of hundreds of millions of dollars in annual revenue, an advisor close to the company told Business Insider.
Eugene Kim contributed reporting.
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