Gawande says health venture is not seeking profits. But whose bottom line will it benefit?

Dr. Atul Gawande has described his new health care company as a “nonprofit” that will operate independently from the three massive corporations providing its funding — a firewall he said is crucial to ensuring its mission stays focused on the needs of patients.

But since he was named CEO in June, the three founders of the company — Amazon, JPMorgan Chase, and Berkshire Hathaway — have remained circumspect about the health venture’s precise legal structure, focus, and funding.

A person familiar with the inner-workings of the enterprise told STAT that its corporate creators view it as a non-profit-seeking internal unit “that serves the three founding companies.” This person stressed that the new entity, even though designed to accomplish public good, is a private organization that is accountable to its funders, not to people in need of health care solutions outside it walls.

The ambiguity surrounding the venture is understandable given the unusual and ambitious nature of the effort. No companies of such stature have publicly launched a campaign to fix America’s costly and dysfunctional health care system — and agreed to commit funding over the long term to test solutions conceived by a physician with the public profile of Gawande.

Still, the extent of that funding — and what strings will be tied to it — remain open questions that are central to how the enterprise will function and who will benefit most from its work. Will it be the 1.2 million employees who will be used to test the reforms? Will it be the three founding companies that will save money on health care costs and develop commercial solutions they can sell to others? Will it be the broader society that will finally get privately supported innovation in health care, instead of ever-rising deductibles and premiums?

“Nobody knows what this thing is going to do,” said Howard Forman, a professor of management and public health at Yale University. “I wonder what is the undercurrent of this company. Is it going to be funded with enough money to make a difference? Is it going to be allowed to do pilot projects with the health plans associated with the three partners, in which case you could see some real change?”

The desire for secrecy by the three companies underscores a tension between their private business goals and the intense public interest in whatever solutions they pursue in health care, which remains a hot-button issue in Washington, D.C., and in homes across the country. Furthermore, pursuing social reform is not typically within the purview of such companies, whose executives run the risk of alienating investors who might prefer that they focus on making money, not healing the sick.

Forman applauded the companies’ willingness to tackle the nation’s health care challenges, asserting that the work is aligned with their business interests given the rising costs of health care for employers. But he also said he was puzzled by the secrecy surrounding the Boston-based venture and the vision shared by its leaders.

“It’s not like Atul Gawande scribbled this on the back of a napkin,” he said. “They told us he wrote a white paper. My first request of Atul Gawande would be, ‘Continue to edit your white paper so we can publish it and the world can know what our vision is, because it will help us attract the type of talent we want to attract.’”

Gawande has kept a low profile in recent weeks. After the announcement of his appointment in late June, he described the mission of the effort as lowering costs and improving health care for the employees of the three companies, and incubating solutions for the rest of society.

He also emphasized that the new entity would stand apart from the business goals of Amazon, JPMorgan, and Berkshire Hathaway.  “Number one, it is an independent entity. It is not part of those companies,” he said during an interview at the Spotlight Health conference in Aspen, Colo. “Number two, it is nonprofit. There is no dollars that go back to those companies. That’s really important, because the only mission and the only goal then from the investment is to achieve those three core goals: better outcomes, better satisfaction, and better cost efficiency.”

Gawande added later in the conversation that any successful solutions put in place for the employees will be used for the public good, not private enrichment. “What we discover has to be open to everybody,” he said, adding that the entity does not want to follow the path of companies that sought to patent genes discovered through the Human Genome Project.

“If you discover a new surgical procedure, we tell everybody about it. We teach people how to do it,” Gawande said. “We don’t tell them, ‘OK, now you have to give me 10 percent of your future earnings as a surgeon because I taught you how to do this work.”

The person familiar with the three companies’ strategy for the venture said any solutions put in place by Gawande would be vetted and considered by the companies providing the funding. This individual added that its budget is unclear because the precise focus of the work remains unclear.

“It all depends on what they find and what they need,” this person said. “They’re not told, ‘This is your budget.’ They’re asked, ‘What do you want to invest in?’”