How Haven Failed at Repairing America’s Healthcare System

How Haven Failed at Repairing America’s Healthcare System. The reason that healthcare and associated costs for medical treatment are so high is the way pricing is established, managed care. Making healthcare more affordable and accessible was what Haven was supposed to do.  Its failure to address how prices are kept artificially high via managed care was among its biggest failures.

The lessons available from this epic ‘bellyflop’ are the subject of the latest Houston Healthcare Initiative podcast, hosted by respected Houston based neurologist Dr. Steven Goldstein. The Houston Healthcare Initiative podcast can be heard on: SoundCloud, Radio.com, Spotify, ListenNotes, iHeartRadio, Podcast Addict, Stitcher, BackTracks,PlayerFM, and the Houston Healthcare Initiative web site.

Resource Rich but Still A Bust

Haven was a joint venture between Amazon, Berkshire Hathaway and JPMorgan-Chase. Its purpose was to use the leverage of its tens of thousands of employees and its expertise in technology to improve the healthcare system.

Managed Care Keeps Prices High

Haven Failed to Fix Healthcare
How Haven Failed at Repairing America’s Healthcare System. Haven was a $100 million bellyflop of a failure, as represented here.

Haven worked at the edges of what really made medicine expensive and avoided the fundamental challenge of the managed care model. “We need a system that enables hospital systems to profit from the improved health of the population rather than the amount of ‘sick care’ delivered,” Dr. Goldstein told his podcast audience. “Innovative ideas need to focus first on improving health. The only way for this to happen is for hospital systems to profit from this outcome.”

How?

One example of how to accomplish this, is for hospitals to offer Medicare pricing to patients without insurance at Medicare rates. In return for the discounted prices, patients would pay the hospital a monthly fee. They would also pay a monthly fee into a savings account in order to pay the hospital bill. In this scenario, the hospital would collect the monthly fee even if no patients were admitted to hospital. If patients were kept well, the need for hospitalizations would decrease. “In this environment, the innovative ideas of Haven would have found a much warmer reception,” Dr. Goldstein said.

No Reason for Change or New Ideas

Haven also failed to understand why the medical business was not interested in new, innovative ways to provide and charge for medicine. The reasons were simple. Insurance companies and providers make lots of money from the current way of doing things,” Dr. Goldstein said. “There are few enticements for them to change and why should they when money is pouring in and there is no pressure to do things differently.”

Thanks, But No

Would the ‘industry’ be open to creative ideas and problem solving when it comes to pricing, service delivery or an emphasis on making the public healthy and not just treating illness? “Probably not,” Dr. Goldstein reported. “The current system of managed care frowns on innovation. It controls innovation by only paying for services that have codes. It likes to use words like usual and customary. Medicine lags behind the tech world by approximately 25 years. So no, in a change averse industry I would not look for any creative approaches to take place except over long periods of time.”

About Dr. Steven Goldstein and the Houston Healthcare Initiative

The Houston Healthcare Initiative (HHI) was founded by respected, Houston neurologist Dr. Steven Goldstein. Like many Americans, Dr. Goldstein is concerned about the state of the U.S healthcare system and the sorry state of the public’s health. The Houston Healthcare Initiative web site is an aggregator of news, healthcare pricing information, and resources for those who want to help drive reform for the healthcare industry. HHI’s emphasis for reform is on free market innovation and personal responsibility.

The goal of the Houston Healthcare Initiative is to be a catalyst for change in the way Americans receive and pay for medical treatment. To cause change the site aggregates information, tools, and targets for the reform of the healthcare industry with an emphasis on free market innovation and personal responsibility.

With Haven in the rearview mirror… Failures to Reform U.S. Healthcare System Are Because the System Is the Problem

Haven Failure
In spite of the high tech ability and deep pockets of the joint venture partners, Haven went out of business on January 31, 2021.

Big fail. Haven, a joint venture between Amazon, JPMorgan-Chase, and Berkshire Hathaway, booted the chance to reform their collective employee health insurance, in part, by not working on the correct challenge, according to respected neurologist Dr. Steven Goldstein.  Dr. Goldstein hosts the Houston Healthcare Initiative podcast with a focus on reforming the highest priced healthcare system in the world. Haven is the most recent, but likely not the last, story of corporate good intentions not delivering what was hoped. So, what’s the right challenge?

The System Is the Problem

“Our current healthcare system is focused on treating sick people, not preventing illness,” Dr. Goldstein told his audience, and he gave an example. “The more people there are in hospital beds, the more money is made by the hospitals, doctors and everyone else involved in patient care.” The U.S. healthcare industry is a volume-based scheme of reimbursement for getting paid. Better patient health is not part of the current equation.

More of the Same

The business system Haven tried to disrupt offers no tie to healthier outcomes for patients or incentives for those same people to take better care of themselves. “It’s just more of the same,” Dr. Goldstein said. “Haven failed at reforming their collective employee health insurance in part by not working on the correct challenge but instead ‘worked on the fringes’ of a non-competitive business.”

Worthy Goal but Poor Execution

At Haven, the published goal was improving healthcare services and lower costs for the three companies’ employees. With a heavy reliance on ‘big data’ and the ability to analyze patient information in big amounts, Haven promised to make primary care easier to access, prescription drugs more affordable and render insurance benefits easier to understand. While essentially getting nowhere but costing a lot of money to get there, Haven shut down without affecting the healthcare industry at all.

Healthcare as a Commodity?

The best way to ensure an adequate supply of anything at the lowest possible price is to permit the laws of supply and demand to work. “But as we also know, that is not what we have and not the way costs are assigned or managed by insurance companies, hospitals and pharmaceutical companies that assign prices,” Dr. Goldstein said.

Employee & Patient Voices Heard for a Change?

The public has little to say about how pricing is determined but could have a great deal to say with the right type of organization. The correct method available to everyone is via the non-profit, employee-owned healthcare cooperative.

The cooperative or ‘co-op’, can replace traditional health insurance for qualified individuals and families. Co-ops can also provide incentives for members to adopt healthier lifestyle habits. Financial incentives based on lifestyle would result in lower healthcare costs by decreasing utilization. Ownership of the cooperative would pass the savings from the cooperative to the employees. Co-ops can allow employees to remain members even if they leave the company. By transferring ownership of the cooperative to the employees, companies are no longer responsible for healthcare and can concentrate on their core business.

How Co-ops Work

Co-ops provide affordable medical coverage through a combination of negotiated rates, low monthly payments, personal accountability and lifestyle incentives. “By organizing their workers and families, businesses of any size can overcome this less than efficient way of doing things,” Dr. Goldstein said. “For example, financial incentives based on choices about diet and exercise will result in lower healthcare costs by decreasing utilization. The ownership of the cooperative will pass the savings from the cooperative to the employees. But there are other benefits that will make those employees healthier.”

About the Houston Healthcare Initiative

The Houston Healthcare Initiative podcast with Dr. Steven Goldstein is an information vehicle for people who want to know all medical options for themselves and are interested in reforming the healthcare industry. To learn more about the Houston Healthcare Initiative please visit www.houstonhealthcareinitiative.org.

Why Did Haven Healthcare Fail?

Haven
With the resources of three large and very successful companies, Haven will cease operations in late January, 2021.

Why Did Haven Healthcare Fail? Because they focused and worked on the wrong thing. That is the topic and lesson from Dr. Steven Goldstein on the latest edition of the Houston Healthcare Initiative Podcast.

Haven was a joint venture of Amazon, Berkshire Hathaway, and JPMorgan.  It was formed three years ago to better manage healthcare for the one million employees of these three large, successful and high tech companies. After three years and approximately $100 million Haven will cease operations. Dr. Goldstein tells his podcast audience the reason for the shortfall had nothing to do with resources, talent or intention and everything to do with trying to fix the wrong thing. The people at Haven were approaching the challenge with trying to fix the existing system.

But according to Dr. Goldstein, the existing system is the problem. “Our current healthcare system is focused on treating sick people not preventing illness,” Dr. Goldstein told his audience and he gave an example. “The more people there are in hospital beds, the more money is made by the hospitals, doctors and everyone else involved in patient care. Ours is a volume-based system of reimbursement for getting paid. There is no tie to healthier outcomes for patients or incentives for those same patients to take better care of themselves. It’s just more of the same.” 

The strategies Haven pursued was to leverage the scale of all those employees for better rates and prices. With over a million employees it seems like that might have worked. But it did not because the healthcare industry is not governed by the free market. Instead, it is governed by lobbyists from the hospital, pharmaceutical and insurance industries all who work together to help make sure that little meaningful change is ever introduced never mind adopted. “The focus is not on improving the population’s health, Dr. Goldstein said. “And ultimately that was the biggest mistake the people at Haven made. They were focused on the wrong problem. They might have been able to make a bad system work somewhat better, but it is still a bad system.”

 It was a shame that so much money and time went into this laudable goal but yielded no good outcome.  A common sense approach to managing the public’s health and is exactly what the insurance, hospital, and drug companies do not want. Given the collective influence (deep pockets) of these businesses and their lobbyists, the American public will continue to get the bill for a medical industry that puts maintaining the status quo as its priority. 

 

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