Jamie Dimon, CEO of JP Morgan Chase, speaks at the CEO Innovation Summit of the Business Roundtable on December 6, 2018.
Janhvi Bhojwani | CNBC
JPMorgan Chase does it alone.
After the healthcare joint venture founded by Amazon, Berkshire Hathaway, and the largest U.S. asset bank was dissolved earlier this year, the companies vowed to continue their attempts to cut costs and improve results for their employees.
Now JPMorgan announced on Thursday that Morgan Health is being launched to improve the quality of medical care for the bank’s 165,000 U.S. employees and their families. The company is led by Dan Mendelson, a health advisor who served in the Clinton administration and will be based in Washington.
The new entity will also have $ 250 million to venture into companies with “promising healthcare solutions,” the company said.
“We have the best health care in the world in terms of doctors, hospitals, pharmaceuticals and medical device companies, but we certainly do not have the best results,” CEO Jamie Dimon said in the statement. “There are ways we can make significant improvements and we intend to take a disciplined approach to addressing some of these issues in meaningful ways.”
The American healthcare system has proven to be a tough nut to crack: it’s an intricate network of established players, including insurers, drug manufacturers, doctors, and middlemen, that cost the country $ 3.8 trillion in 2019, according to the Centers for Medicare and Medicaid Services Has. In its three-year run, Haven, the joint venture that was formed in January, had little to show in terms of concrete results.
JPMorgan is confident that it will be more successful on its own, including by focusing on local providers and partnering directly with provider groups, insurers and other organizations.
The bank, which spends $ 1.3 billion annually on health care for its employees, will seek to improve the way primary care is provided and improve patients’ ability to navigate their own care, Mendelson said on Wednesday in a telephone interview. It will also focus on maternal health, cardiovascular disease and diabetes preventive care, he said.
The new business was more collaborative than its predecessor. In its press release, the bank included a statement from the CEO of CVS Health, one of the healthcare companies whose stocks were fined when Haven first made headlines in 2018.
“Everything we do, we expect to be in partnership with other organizations,” said Mendelson. “We don’t want to build tools and technology from scratch, we want to use the best in healthcare to work for us.”
Like its predecessor, Morgan Health is not operated to make a profit, according to Peter Scher, the bank’s vice chairman, who is in control of the efforts.
That makes it a unique company within JPMorgan, a powerhouse in both personal and Wall Street banking. Rather than being included in any of JPMorgan’s four main revenue generating areas, Morgan Health’s results are included in the bank’s corporate reporting.
While the bank will initially focus on employees and their families, it aims to be a model for other employers to emulate and will seek to increase access to health care in the communities in which the bank operates improve, said Scher.
“The work we’ve done with Haven has increased both opportunities and challenges, and we think this is an important step,” said Scher. “If we can capture the innovation that is happening and scale it to benefit our employees and their families, it will be a huge boost for JPMorgan and, ultimately, could be a huge boost for the country.”
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