The American healthcare system is broken, and few would argue otherwise, and now the richest men in the world--Amazon CEO Jeff Bezos, and the world’s most legendary investor, Warren Buffett, who were hoping to disrupt it to some extent--can’t even find a CEO for their new partnership.
Four months after launching a search for the right CEO to run a healthcare partnership among Amazon, Berkshire Hathaway and J.P. Morgan Chase, there’s still no CEO, and sentiment has gone a bit soft.
ABC could potentially significantly disrupt the entire healthcare industry because while it would be providing healthcare only to the employees of these three companies, they are giants: That’s 1.2 million employees in total.
So there’s no wonder it’s hard to find the right (or willing) CEO. Not only will the prospective CEO have to deal with 1.2 million employees, but he or she will have to deal with them in the most harrowing industry on Earth—American healthcare. To top it off, the CEO would be working under the intimidating trio of Bezos, Buffett and Jamie Dimon of JPMorgan Chase.
And in the meantime, no one’s really sure how ABC even plans to do what it intends: bring down healthcare costs and use technology to simplify the system. That said, some industry experts view ABC as a major potential disruptor because it could cut out an extensive and expensive network of middlemen.
Still, for a potential CEO, it’s rather ominous. Related: Kenya: The Blockchain Capital Of Africa
Further diminishing the job’s attractiveness, ABC is designed as an entity “free from profit-making incentives and constraints”, but won’t necessarily be a non-profit. For a CEO, that probably means no big stock incentive plan.
Having interviewed health policy and insurance experts—including a former Aetna executive, former Medicare chief and a former Obama-era chief technology officer—no one’s fit the bill, apparently.
Lately, though, the JV has been looking elsewhere, to technologically focused entrepreneurs who have nothing to do with healthcare, CNBC reported cited unnamed sources, noting that ABC viewed healthcare and drug supply companies as part of the problem, not the solution at the end of the day.
Even so, the name of Owen Tripp, CEO of Grand Rounds Health—a second medical opinion service—and the founder of Reputation.com, a developer of online reputation software, has come up, but comments from Tripp himself suggests he’s not in the running, or not considering the gig.
Tripp told CNBC he’s committed to Grand Rounds for now. “To the extent we can be part of their solution as their mission sharpens, we’d be glad to pitch in – just as we would assign any organization that wants to improve clinical outcomes,” CNBC quoted him as saying.
The partnership, ABC, is pretty much a microcosm view of the hoped-for disruption in the wider healthcare sector.
Despite all the chaos, the healthcare industry is still attractive to investors, with Bain & Co. detailing four permanent, long-term trends that investors are eyeing: an aging population, rising rates of chronic disease, demand for quality services and the need for efficient delivery.
Last year was the year of the “megadeal” in the healthcare industry, and this year is set to see more of that. Even if deal-making activity wasn’t as pervasive as it was in 2016, the size of deals has been bigger, jumping over 148 percent to $175.2 billion in 2017.
By Charles Benavidez for Safehaven.com
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