The CEO of Berkshire Hathaway sat down with the editor-in-chief of Yahoo Finance to discuss the healthcare joint venture backed by Amazon-Berkshire-JPMorgan, including its much-anticipated name, audacious goals and leader Atul Gawande, MD.
When CEOs Jeff Bezos, Mr. Buffet and Jamie Dimon joined forces to lower healthcare costs for their 1.2 million combined workers in January 2018, it was clear the corporate trio had potential to force payers and providers to behave differently. Fast forward 14 months: The venture has a name (Haven), website, board, leadership team and a respected CEO who has been on the job for nine months.
Seven points Mr. Buffett made in his interview with Andy Serwer, editor-in-chief of Yahoo Finance:
On the venture operating without a name for 14 months
"I didn't worry about a name. We could have gone on as a no-name operation for 10 years, as far as I'm concerned."
On Dr. Gawande's game plan as CEO of Haven
In response to the question of whether Dr. Gawande will talk to insurers: "He'll be talking to everybody. His game plan is not something we are going to try and lay out because it's in his head, to some degree. Obviously, we selected him by hearing and reading what he's done. But he'll learn as we go. He will conduct certain experiments and try [them] out with a community with a lot of employees. There are various ways to experiment."
On his plan to support Dr. Gawande as CEO
"The plan is to support a very, very, very good thinker on this subject who is a practicing physician and who commands the respect of the medical community to in effect figure out some way so we can deliver even better care, have people feel better about their care and stop the upward march of cost relative to the country's output. We have this incredible economic machine, but we shouldn’t be spending 18 percent [of GDP] when other countries are doing something pretty comparable in terms of doctors and hospital beds per capita. I want us to be the leader, but I think we're paying a price. If we are paying 7 extra points of GDP, that's $1.4 trillion a year."
Why the CEOs make the partnership work
"We've got a wonderful partnership in the sense that it's large and has reasonable market muscle with more than a million employees among the three of us. We've got three CEOs who can make things get done in organizations that are so big that normally they would get very bureaucratic. If you tried to do this with many big companies, you'd have legal weighing in, public relations weighing in — we don't have any of that. We may have it in certain areas, but Jamie isn't going to worry about doing that sort of thing and neither is Jeff."
On the complacency he encountered when interviewing CEO candidates for Haven
"We've got unity of commitment and an ability to execute on the commitment. The only problem is you’ve got a $3.4 trillion industry, which is as much the federal government raises every year, that basically feels pretty good about the system. As we went around talking to people — to find a leader for the group, for example — everybody says the system turns out very good medicine. Everyone thought the system needed some adjustment, just not their part of the system. That's very human; I'd do the same thing I'm sure if I was in the same place."
On the need for private sector intervention to curb healthcare spending
"There is enormous resistance to change while a similar acknowledgement that change will be needed. And of course, if the private sector doesn't supply that over a period of time, people will say then, 'We give up. We have got to turn this over to the government.' Which will probably be worse."
On the government acting to lower drug prices
"They're trying. … When you talk to the average congressman, they regard it as a problem, and they see specific instances of drug prices. But it's a big problem to change. The trouble is it intersects in so many ways. That's why we've got Gawande heading it and three bigger-sized organizations backing him."