May 21, 2021: -After the healthcare joint an Amazon formed venture, Berkshire Hathaway, and the biggest U.S. bank by assets was disbanded earlier this year, the companies vowed to push forward in their attempts to lower costs improve outcomes for their employees. On Thursday, JPMorgan announced it is about to launch Morgan Health to improvise the quality of medical care for the bank’s 165,000 employees and their families from the U.S. The business is run by Dan Mendelson, a healthcare consultant who served in the Clinton administration and will be based in Washington.
The new unit will have $250 million to make venture investments in companies with “promising healthcare solutions,” the firm said.
“We have the healthcare in the world in terms of doctors, hospitals, pharmaceutical, and medical device companies, but we do not have the best outcomes,” CEO Jamie Dimon said.
The American healthcare system has proven to be a difficult nut to crack: It’s a complicated network of entrenched players that include insurers, drug makers, physicians, and intermediaries that cost the country $3.8 trillion in the year 2019, according to the Centers for Medicare and Medicaid Services. Haven, the joint venture folded in January, had little to show concrete results in its three-year yeats.
The bank, which spends $1.3 billion annually on healthcare for its employees, will seek to improve the way primary care is delivered and enhance the ability of patients to navigate their care, Mendelson said on Wednesday on a call. He will also focus on preventative care in maternal health, cardiovascular disease, and diabetes.
The new business struck a collaborative tone than its predecessor; in its release, the bank included a statement from the CEO of CVS Health, one of the healthcare companies whose stock was punished when Haven first made headlines in 2018.
“Everything we do, we expect to be doing in partnership with other organizations,” Mendelson said. “We’re not looking to build tools and technologies from scratch, but rather to deploy the best in healthcare to work for us.”
Like its predecessor, Morgan Health isn’t being run to generate a profit, according to Peter Scher, the bank’s vice chairman who has ultimate oversight of the effort.
That makes it somewhat unique as a business within JPMorgan, a powerhouse in retail and Wall Street banking activities. Instead of being included in one of JPMorgan’s four main revenue-generating divisions, Morgan Health’s results will be reported under the bank’s corporate reporting line.