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Dr. Atul Gawande will step out of health care’s limelight on Monday to put himself under its microscope.

Taking the helm of the new health venture funded by Amazon, JPMorgan Chase, and Berkshire Hathaway is the riskiest move of his career — one that will subject his acclaimed New Yorker narratives to a real-world stress test whose outcome is far from certain.

In the balance will hang not just his reputation as a physician and writer, but perhaps the highest-profile effort to date to leverage the private sector to fix America’s fragmented and dysfunctional health care system. Gawande has made a name for himself by proposing novel solutions to the system’s many shortcomings — from surgical checklists to rooting out unnecessary care — and testing them in specific hospitals or markets around the world.

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“All the eyes of American health care will be on this new initiative,” said Andrew Dreyfus, chief executive of Blue Cross Blue Shield of Massachusetts and an acquaintance of Gawande’s. “Atul understands this is high stakes, and I think that’s why he took the job.”

After interviews with leaders across the world of health care, STAT has identified five challenges Gawande will take on in his new role. Each one carries substantial risks and complications that range from the political, to the personal, to the professional and ethical:

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Challenge: Controlling costs while improving quality

How: Leverage technology to inform patients, demand lower prices

Risk: Coming off as a corporate stooge, rather than a steward of better health

Gawande’s biggest test will be to make changes that will simultaneously lower costs while improving the quality of care for 1.2 million employees who range from investment bankers, to short-order cooks, to Amazon pickers in fulfillment centers across the U.S.

The combined workforce is a microcosm of America, which is why it can serve as a powerful example for the rest of the country and why it will be so difficult to develop effective solutions.

To succeed, Gawande will need to make clear who his real boss is — the employees or the business leaders who have an inherent interest in reducing their runaway health care expenses. Gawande has emphasized that the new venture will be a nonprofit, and therefore somewhat insulated from corporate financial pressures. But health care business specialists said he will need to set the tone early among patients who will be skeptical of the new venture’s motives.

“It’s a sensitive political area: Are we here to just cut costs? Will we lose the trust of those under our care if that’s a stated mandate?” asked Zen Chu, faculty director of Health Care Ventures at the Massachusetts Institute of Technology’s Sloan School of Management. “Setting it up as a nonprofit helps, but there will still be trust issues.”

Gawande will need to muster his considerable talents as a communicator to explain the rationale behind his changes — whether it’s sending employees to a particular provider to get care, or more carefully scrutinizing when they get certain tests and procedures.

“All the eyes of American health care will be on this new initiative. Atul understands this is high stakes, and I think that’s why he took the job.”

Andrew Dreyfus, chief executive of Blue Cross Blue Shield of Massachusetts

Challenge: Lowering hospital prices

How: Shift care to lower-cost settings, get more employers to join the effort

Risk: Alienating academic centers that dominate some markets

It is impossible to save money without getting lower prices for medical services. Americans pay the highest health care prices in the world, which is a primary driver of the nation’s sky-high health care tab, according to a recent study by researchers at Harvard University and the London School of Economics.

But several industry specialists said that Amazon and its partners, though large and influential, lack the concentration of employees in specific geographic regions to force hospitals to cut their prices.

“The quickest way to get a bang for your buck in cost control in health care is for purchasers of care to negotiate better prices, and that’s what limits them in local markets — they don’t have enough purchasing power,” said Dr. David Blumenthal, president of the Commonwealth Fund, a private foundation that conducts health care research. “If you can’t negotiate better prices, the alternative is to send your consumers to places that charge lower prices.”

In some cases, that might mean directing employees to steer clear of large academic medical centers that dominate local health care markets and charge the most for their care. Gawande himself is a surgeon at Brigham and Women’s Hospital, a prominent Harvard-affiliated hospital in Boston, so his effort in this new venture may run counter to the business interests of his own hospital.

Another way to counter hospitals’ pricing power is to convince other large employers to join the new venture, which may be a relatively easy to do given the prominence and promise of the effort.

“It wouldn’t surprise me if lots of other self-insured employers piled into whatever Atul is running,” said Chu. “It’s structurally a nonprofit and it improves with scale, so very quickly you could have 50 million covered lives, way beyond the 1 million employees the founding companies charged him with.”

Challenge: Cutting out the middlemen

How: Create innovative business solutions that streamline health care’s supply chain

Risk: Alienating key stakeholders needed to access or serve customers

Amazon has built its business on simplifying supply chains and cutting out industry gatekeepers who either add unnecessary costs or undermine the customer experience. Think books. Think home goods. Think groceries.

Gawande must accomplish the same feat in health care, where it is much harder and more complicated to do so. The market is filled with entrenched incumbents who control access to prescription drugs, medical services, and even the customers themselves.

But Amazon’s recent acquisition of the mail-order pharmacy PillPack points to a way forward — and not just in pharmacy sector. PillPack successfully battled with pharmacy benefit managers, which operate their own mail-order pharmacies, to get access to networks that include hundreds of millions of U.S. customers.

Chu, who was the first investor in the company, said it accomplished that by using technology to create a better service. PillPack uses software and robots to deliver medicines in presorted packets to patients across the country that take multiple medicines. It provides them with instructions on taking the medications and avoiding adverse interactions.

When Express Scripts, one of the nation’s largest pharmacy benefit managers, sought to block PillPack from its network, the company got its customers to protest the move, putting pressure on Express Scripts to reverse course. It did so in 2016.

“From the beginning they knew they were competing on customer satisfaction,” Chu said of PillPack’s founders, who added that Amazon’s acquisition of the company will spur a transformation of the industry. “My prediction is this is the beginning of a sea change, as Amazon will be able to serve on the front lines of consumer health care.”

Amazon will also likely become the pharmacy supplier to the 1.2 million employees covered by Gawande’s venture, which could help improve care and lead other employers to sign up.

Challenge: Attacking chronic disease; and variations in care

How: Leverage technology to improve patient knowledge, contract with select providers

Risk: Changing patient behavior is the hardest thing to do in health care, and may prove costly

A crucial part of Gawande’s efforts will be addressing the crushing burden of chronic disease. These preventable illnesses, such as diabetes and heart disease, dramatically magnify costs: Studies have established that 5 percent of U.S. patients account for nearly 50 percent of spending in the U.S.

“Most of those 5 percent have multiple chronic illnesses that tend to not be well-managed within our fragmented health care system,” said Dreyfus, the Blue Cross chief executive. He added that one of Gawande’s first efforts will likely be trying to understand the extent of the disease burden among the 1.2 million employees.

The new venture could help improve their care and cut costs by standardizing treatment regimens and directing employees to providers with proven track records. Given the expertise of Amazon, JPMorgan and Berkshire Hathaway in analyzing data and assessing risks, Gawande will be able to use machine learning software and other technologies to better predict the onset of disease and take preventive measures.

That’s where Blumenthal sees the greatest potential for Gawande and the new health venture — using the power of technology to help inform patients and deliver care at the time when it can make the most difference.

“The one major advantage that this combination has is Amazon and its IT capabilities and the network of consumers that Alexa touches,” he said, adding that the PillPack acqusition further enhances its ability to leverage technology.

“I would extend that well beyond the pharmaceutical market to begin to try to influence the decisions that consumers make with their clinicians about health care in a very personal way,” Blumenthal said. “That doesn’t mean changing the way providers behave so much as it means changing the way consumers behave, making them smarter purchasers.”

Challenge: Writing for the New Yorker while leading a national effort to reform health care

How: Carefully selecting subjects and avoiding conflicts

Risk: Compromising the progress of the new venture, or undermining his credibility as a journalist

Gawande holds many jobs — surgeon, writer, teacher, entrepreneur — and intends to retain them while leading the new venture. But it may be difficult to keep the roles separate, particularly as it relates to his most public job as a staff writer for the New Yorker.

The power of his writing is what put him on the radar of the executives who formed the new health venture. In 2010, Warren Buffett publicly praised “The Cost Conundrum,” Gawande’s New Yorker piece, which examined why health care was so much more expensive in some parts of the U.S. than others, despite little difference in the quality of care or the sickness of people getting it.

But writing on matters related to his work for the health care nonprofit could pose conflicts, potentially by disclosing information or strategies the new venture would want to keep quiet — something Amazon in particular insists upon in its business dealings. He might also have to tiptoe around certain topics to avoid infusing bias.

“I see a lot that intersects pretty directly with the work he’ll be doing as part of his new venture,” said Dan Kennedy, an associate professor of journalism at Northeastern University. In addition to health care costs, Kennedy noted that Gawande has written about President Trump’s attempts to do away with the ACA, unnecessary medical procedures, and other controversial subjects.

“Given his journalistic focus on policy matters, it strikes me that it’s going to be difficult for him to avoid writing about issues that he’s not involved in,” he said.

More broadly, Gawande will have to learn to manage the new venture, and his other interests, in a fish bowl, as his every move and misstep will be the subject of intense media coverage and scrutiny. But keeping one foot in his existing endeavors also provides a cushion if the new venture doesn’t produce the results many are hoping for.

“I do think this is brave,” Blumenthal said of Gawande’s new job. “On the other hand, he starts from a foundation of enormous prestige and influence and he’s not giving up the career that has brought him to prominence. So if it doesn’t work, he can return to being the extraordinary thinker and writer and innovator he’s always been.”

  • It’s an enormous challenge not only in it’s scope, also the heavy intensive media coverage which, coming from different perspectives, will be a great public influence both adversely and favorably producing confusion where confidence is needed in order to succeed. To be certain, big Pharma won’t sit quietly either. I have the highest respect for his courage, and for the patriotism and support of Amazon, JP MorganChase and Berkshire Hathaway. Thank you all.

    • Yes you are right. Mountains are going to be moved for the ABM missile (Amazon, Berkshire and Morgan) effort to fail. You might have read my observation. FDA has to watch and regulate rather than meddle which they do. Drugs could become affordable.

  • I do not underestimate the intelligence of Warren Buffett or Atul Gawande.

    There is one outcome of this venture that may be genuinely helpful.

    Many if not most health policy experts believe that the major problem of our healthcare system is that it is employer/employee based.

    It is possible that the three companies involved in this venture have thought of extricating themselves from providing health care insurance.

    If Dr. Atul Gawande takes this on as his mission this project may well prove transformative and worth the risk Dr. Gawande is taking.

  • The fourth challenge, regarding more intensive and tech-savvy ways to handle patient care, is the only one that really brings new thinking to the health care system. The first three challenges are tweaks to a broken insurance and payment system that could be instituted by payers independent of what the new non-profit recommends. I actually would hope for this promising new venture to go beyond the recommendations in this article and to find creative approaches that cut through the dilemmas that the health care field now faces.

  • There is an urgent need to reduce health care costs in the US because the middle level physicians practitioners who can take care day to day minor ailments many of which might be due to stress and need a pulse or BP reading or a patient hearing is not readily

  • The United States cannot afford still another marginal effort to sort out its healthcare system.

    Dr. Atul Gawande who is an admirable figure is not in a position to solve America’s health care problems.

    This new organization has no specific purpose at this time. It also has a rather diffuse patient catchment. It is based upon a miniscule fraction of our population spread over a continent.

    It carries the characteristically American limitation that it is employer/employee insurance based.

    This organization will apparently not have line authority and would appear to be nothing more than a rather large employer group seeking better prices through group purchasing.

    It will also not address the reality that some ten percent of the population is still uninsured, that a much larger percent of the population is underinsured and that a still larger population has no easy access to primary care for lack of such physicians.

    It will not address our top public health crises, such as opioid abuse.

    I find the overblown interest in this effort to be a misplaced hope for change or a sign of desperation.

    We need a genuine national debate on what we want out of health care. Not another private effort of pseudo reform bankrolled by our 0.1%.

    Bohdan A. Oryshkevich, MD, MPH (Health Policy and Management)

    • Great comment. My initial reaction to the formation of this new organization was that “it’s probably not going to move the needle at all visibly in the aggregate.”

      Again, I recommend the new “Overcharged” book. Not that I am touting it, not at all. “Who knew that healthcare could be so complicated?“ — President Trump

    • Folks start writing epitaphs before anything happens. I wonder why? Let him do what he is charted to do and you can lead your debate. At times debates help but an effort is needed rather than saying cannot be done.

      Yes healthcare is politically charged subject and in our legally corrupt system it would be Herculean task. Please review my comment for the task. There are options and if we are persistent there will great results. Let’s no write it off.

  • When reporters write about a subject they behave like Monday morning quarterbacks. They have not clue and have never been there or done anything meaningful.

    ABM Alliance is taking on two formidable foes, Pharma and PBMs, to make drugs affordable. This alliance and recent Amazon acquisition of PillPack have the tools and means to achieve the objective. We need to give them a chance.

    No one has been bold enough to take on the challenge. Yes PBMs are not going to rollover and play dead. They will use their monies in our legally corrupt system to kill every progress ABM Alliance makes.

    My perspective:

    1) https://pharmachemicalscoatings.blogspot.com/2018/05/improving-drug-affordability-for-united.html

    2) https://pharmachemicalscoatings.blogspot.com/2018/07/amazon-pillpack-marriage-can-alleviate.html

    Let’s cheer rather than say the task is difficult. If it was easy every village idiot would have done it.

    • Amazon, BH, and JP Morgan are for profits known for making money. PillPack was bought to make money not to save money.

      Bezos and Buffett know how to make money.

      The richest men in America are not in a position to tell Americans what their health care should be like.

  • One way to reduce the cost of care for patients with chronic illness is to utilize physician extenders such as a registered nurse practitioners or specialty clinically certified registered nurses. they can provide follow-up and case management with electronic or phone contact with patients. Conditions with proven benefit of such management are cardiovascular, diabetes, COPD, renal failure and children with severe asthma. Hospitalization can be avoided and complications reduced. There are many nurses whose bodies have been broken by decades of bedside nursing, and have a wealth of knowledge we are currently wasting. Much patient monitoring and advisement can be done electronically, especially as tech-savvy Baby Boomers age into chronic illness.

  • Nicely done. I will have to cite this on my KHIT.org blog. I was given a comp advance copy of the new Cato Institute book “Overcharged” for study and review. A lot of the same themes (I’ve written it up), though for Cato it all principally boils down to “no middlemen, pay cash, just like the rest of the wondrous competitive ‘free market’. Prices down, quality up. Problem solved.”

    Yeah, I know…

  • There is only one solution to the mess American healthcare is in: remove third party payers. They control what happens in healthcare because they control the money. It is a sad reality no one wants to confront and unless we have a single payer system and make care affordable there is no hope including Atul Gawande, Amazon or anybody else. Good luck

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