ASPEN, Colo. — It’s hard to imagine having to endure a more exacting executive search committee than the triad of corporate chieftains atop Amazon (AMZN), JPMorgan Chase, and Berkshire Hathaway.
But Dr. Atul Gawande’s selection last week by Jeff Bezos, Jamie Dimon, and Warren Buffett to run a venture with the extraordinary yet seemingly futile goal of disrupting the health care industry didn’t stem from any longstanding relationship he had with any of them. Its genesis was an article he wrote for the New Yorker nine years ago.
“That opened the door,” Gawande told STAT, providing the first explanation of how his selection came about.
Gawande, 52, the celebrated surgeon, author, and journalist, said the closest he had come to knowing Amazon’s Bezos was a fleeting hello at a TED Talk. “But I had really never met Jeff Bezos. And I didn’t know Jamie Dimon in the least.” He did catch the eye of Berkshire Hathaway’s Buffett years ago, or, rather, Buffett’s longtime right-hand man, Charlie Munger, also a businessman and entrepreneur.
In a brief interview at the Aspen Ideas Festival Spotlight Health program — in which he also said the new job would have to be his top priority — Gawande said he had known Munger ever since he wrote a much acclaimed article in 2009 for the New Yorker, “The Cost Conundrum.”
The piece examined why health care was vastly more expensive in some parts of the U.S. than others, despite little difference in the quality of health care and the sickness of people getting it. The piece was reported from McAllen, Texas, then the most expensive health care market in the country.
“Charlie Munger I’ve known since he told me he loved, he liked, the article I wrote,” Gawande said. He then recalled the story, well-publicized at the time, of how Munger thought the article was so socially important that he blindly mailed Gawande a $20,000 check.
Gawande, a surgeon at Brigham and Women’s Hospital in Boston, said at first he sent the money back: “He sent it back to me again and said, ‘Do with it what you want.’ And so I put it into our research fund.”
Though Gawande said the Munger relationship had paved the way for his selection as CEO of the new health care company, he went on to say of Buffett, Dimon, and Bezos, “I think each of them heard about me in different ways.”
Buffett spoke publicly about Gawande long before they met. In a CNBC interview in 2010, Buffett praised the “The Cost Conundrum,” saying, “That fellow whose written on health care recently in the New Yorker — Gawande — he had an article last summer that was absolutely magnificent.”
In some ways, the McAllen article could be seen as laying out some of the challenges the new enterprise will face as it seeks to reduce health care costs. In announcing the venture in January, Dimon said, “Our goal is to create solutions that benefit our U.S. employees, their families and, potentially, all Americans.”
Gawande told STAT that he was first approached for his advice in January. He said he did not know when the dialogue evolved from his offering his thoughts to being a prospect for the job.
“I started talking with them,” he said, “but they ended up talking to over 100 people for advice, so I don’t think I exactly know.”
Gawande has offered scant details about the yet-to-be-named organization (he jokingly referred to it as AJB after its corporate owners), though he said it is meant to come up with ways to reduce health care costs for the companies’ employees, as well solutions that could be applied across the entire country.
He said the intermediary who first contacted him was Todd Combs, an investment manager at Berkshire Hathaway in Omaha who was the emissary who quietly put the three billionaires together in the first place. Combs was said to have so impressed Dimon that he was named to the board of JPMorgan Chase.
No matter how efficient Gawande is with his time, his CEO role will test even his ability to multitask. Asked how much time he would devote to it when he officially begins July 9, Gawande said, “It’ll have to be 100 percent.”
But he is not giving up his positions at Harvard or Brigham and Women’s or his work as a surgeon, and plans to continue writing. He said he will transition from being executive director to chairman of Ariadne Labs in Boston, which works on solving problems in health systems around the world.
“I still have my patients and surgery booked through the summer and have my work,” he said.
Asked if most of his time will be spent in the new role, he said, “This is going to become the number one priority.”
If it were possible for Gawande to be even more of a celebrity in the worlds of health and medicine, the announcement last week has inevitably made him more in demand. He was crowded by well-wishers at appearances here Saturday and Sunday, with some thrusting his books at him for autographs.
Several leaders in health and medicine said in interviews here that while Gawande’s mission is daunting, they thought he was a prudent choice.
“He’s excited. He’s nervous. And he’s also incredibly humble,” said Seth Berkley, CEO of Gavi, the Vaccine Alliance, who met privately with Gawande in Aspen this weekend. “He’s incredibly smart and he has a great shot at being able to do this.”
Berkley said Gawande will, of course, be under great pressure from Dimon, Bezos, and Buffett. “Some of these leaders he’s working with don’t have a reputation for patience, and he knows that. He understands the risks given the oversized personalities.”
Rip Ballou, vice president and head of GSK Global Vaccines, said he was impressed after hearing Gawande speak here, saying, “He left me feeling that there are actual people thinking how do we get out of this quagmire.”
Ballou said that the billionaires who will be Gawande’s new bosses reminded him of when he worked for Bill Gates. “People who have achieved the kind of success these people have achieved — it’s not by accident,” he said. “I would expect them not to leave him to his own devices. I wouldn’t be surprised if those three bosses become very well-educated” in health care and put forward their own ideas.
“I was very encouraged to hear that all three of his bosses said, ‘You have time — you don’t have to figure it out by next year,'” Ballou added.
Indeed, during a panel here Saturday, when he was questioned by PBS journalist Judy Woodruff, Gawande took care not to overpromise — and repeatedly noted that he hadn’t started yet. He said he understood the daunting challenge of taking on health care intermediaries such as insurers and pharmacy benefit managers.
“It is amazing to me that I would get to partner with people like Jeff Bezos, Warren Buffett, and Jamie Dimon — amazing people who have committed themselves to the long term,” he told the crowd. “But the largest concept here is that I get to have a million patients that I as a doctor get to add to my responsibility, and my job for them is to figure out ways that we’re going to drive better outcomes, better satisfaction with care, and better cost efficiency with new models that can be incubated for all. That is a tall fricking order. But what they’re saying to me is that resources won’t be the problem. Human behavior will be. And achieving scale will be.”
Gawande emphasized the nonprofit nature of the organization and made clear that he does not see himself under the thumb of Amazon, JPMorgan Chase, or Berkshire Hathaway bureaucracies — something people who know him said was important to establish before he accepted the job.
“Number 1: It is an independent entity; it is not part of those companies. Number 2: It is nonprofit; there are no dollars that go back to those companies. That’s really important.”
Asked about the range of employees at the companies, Gawande said, “This is ordinary America. They are across the entire country. So I get to have and have to worry about and learn about the life and needs of — what’s the largest employment group at Amazon? Fulfillment center workers, most of them people who probably are only there a year or so.
“So these are people who have very unstable health care … and how do you solve problems for that range of people?”
Berkshire Hathaway includes many old-line companies, he noted, “often union, Midwestern, Southern — it’s Burlington Northern Railways, with union railway workers, it is Acme Brick, it is Dairy Queen. They make stuff. And then you get to JPMorgan Chase, where their largest employment group are bank tellers.”
Sounding much like a politician, Gawande told people here that he intends to embark on a “listening tour.” His first decision: coming up with a name that’s less of a mouthful than the Amazon-Berkshire-JPMorgan health venture.