BREAKING
Chegg Q4 2025 Earnings Soar: New Strategy Stuns Market 7 hours ago PAL Q4 2025 Earnings Explode: Mergers Pay Off Now 8 hours ago Outdoor Holding Company Q3 2026 Earnings Soar 7% 11 hours ago Apollo Q4 2025 Earnings Rocket: Historic AUM Breakthrough 12 hours ago Anavex Q1 2026 Earnings Rise: Breakthrough Drug Nears 14 hours ago Dynatrace Shares Rise After Q3 Fiscal 2026 Results Beat Guidance 16 hours ago Eli Lilly and Company (LLY) to acquire Orna Therapeutics 18 hours ago Earnings Summary: Becton, Dickinson and Company Q1 FY26 adjusted earnings decline 15% 19 hours ago Earnings Summary: Highlights of Apollo Global Management’s (APO) Q4 FY25 report 20 hours ago Earnings Summary: Loews Corporation reports sharp increase in Q4 FY25 profit 21 hours ago Chegg Q4 2025 Earnings Soar: New Strategy Stuns Market 7 hours ago PAL Q4 2025 Earnings Explode: Mergers Pay Off Now 8 hours ago Outdoor Holding Company Q3 2026 Earnings Soar 7% 11 hours ago Apollo Q4 2025 Earnings Rocket: Historic AUM Breakthrough 12 hours ago Anavex Q1 2026 Earnings Rise: Breakthrough Drug Nears 14 hours ago Dynatrace Shares Rise After Q3 Fiscal 2026 Results Beat Guidance 16 hours ago Eli Lilly and Company (LLY) to acquire Orna Therapeutics 18 hours ago Earnings Summary: Becton, Dickinson and Company Q1 FY26 adjusted earnings decline 15% 19 hours ago Earnings Summary: Highlights of Apollo Global Management’s (APO) Q4 FY25 report 20 hours ago Earnings Summary: Loews Corporation reports sharp increase in Q4 FY25 profit 21 hours ago
ADVERTISEMENT
Analysis

Will Atul Gawande shake the US healthcare industry?

Berkshire, JPMorgan and Amazon have announced on Wednesday that Dr. Atul Gawande will be donning the role of CEO for their newly formed healthcare venture. Gawande will be joining the yet-to-be-named venture on July 9th. When Warren Buffett, Jeff Bezos and Jamie Dimon who are stalwarts in their own domain handpick somebody as CEO of […]

June 22, 2018 4 min read

Berkshire, JPMorgan and Amazon have announced on Wednesday that Dr. Atul Gawande will be donning the role of CEO for their newly formed healthcare venture. Gawande will be joining the yet-to-be-named venture on July 9th. When Warren Buffett, Jeff Bezos and Jamie Dimon who are stalwarts in their own domain handpick somebody as CEO of the joint healthcare project, then that deserves special attention.

Amazon (AMZN), JPMorgan (JPM) and Berkshire Hathaway (BRK) announced earlier this year that they are forming a healthcare firm to help them reduce spiraling healthcare costs. The triumvirate that together employs 1.2 million also added that the new venture will be an independent one which would not be focusing on profits. Healthcare firm will be based in Boston, which is reputed for medical/biotech research.

Atul Gawande
Atul Gawande, CEO of new healthcare venture

Gawande is a well-known face in the healthcare sector who practices ethical leadership. He has been vociferous about healthcare related issues along with lowering costs, which would help in improved healthcare delivery across the country.

Gawande’s profile looks impeccable where he dons many hats of a surgeon, researcher, journalist and writer. He also will be taking over as Chairman of Ariadne Labs, a joint venture between Brigham and Women’s Hospital and Harvard which works on the patient safety and healthcare innovation. Lifebox is a non-profit firm focusing on making surgeries safer across the world where Gawande is Chairman.

This work will take time but must be done. The system is broken, and better is possible.

Despite Gawande’s appointment, there are still many questions looming about what plans does the new venture has or how it’s going to address the highly complex issues across the US healthcare landscape. On the flip side, critics are not sure about picking Gawande since his expertise has been more on the policy front and improving healthcare delivery and not on managing the business. However, the corporate giant trio seems to be unfazed by the concerns and has stated clearly that this is a long-term effort which will take years to yield results.

ADVERTISEMENT

Related: Amazon finds the healthcare space a hard nut to crack

Gawande has an arduous task at hand. The US healthcare industry total spending is now over $3 trillion. There are inherent issues in the healthcare sector like preventable medical errors, infections and accidents which can be fixed, but till now there wasn’t sufficient progress made because of the complex nature of the system, which makes it extremely hard to pinpoint issues.

US Healthcare Spending Since 1990

Kaiser Family Foundation in its 2017 report has stated that insurance premiums have jumped 55% over the last 10 years. It’s no brainer that employers are major providers of health insurance providing coverage to 150 million people.

To put things in perspective, Centers for Medicare and Medicaid Services (CMS) has stated that healthcare spending in US rose 4.6% in 2017 touching $3.5 trillion. It also added that total spending in 2026 is going to hit $5.7 trillion, representing nearly 5.5% spike in spending annually.

Related: Medicare and Social Security funds are on the verge of drying up!!

The increasing insurance costs and drug spending are touted to be the major drivers for rise in spending. Another concern which needs to be worth looking is the rise of uninsured over the next decade. According to CMS, insured rate is going to touch 89.3% by 2026, which is a drop of 1.8% from 2017 levels.

ADVERTISEMENT

It would be interesting to see how Gawande addresses the issues which are prevalent for decades. He can either take the tough and long-time route of reinventing the wheel right from the scratch or join hands with other organizations which are like-minded and fix the existing system. Gawande has been given the go-ahead to choose a right team which would help him to move ahead in the long-term journey.

ADVERTISEMENT