Amazon hires surgeon to lead US healthcare revolution

Amazon, Berkshire Hathaway and JP Morgan Chase aim to revolutionise the US healthcare system with a new company – and have hired respected surgeon and writer Atul Gawande to head the operation.

The three companies made waves in January when they formed a joined venture that aims to cut costs in the US healthcare system, which they argue is too expensive and is damaging economic progress.

Gawande (pictured above) practices general and endocrine surgery at Brigham and Women’s Hospital in Boston, Massachusetts, and at Harvard Medical School.

He is also executive director of Ariadne Labs, a joint centre for health systems innovation, and chairman of Lifebox, a non-profit organisation dedicated to making surgery safer globally.

Details are sketchy about how the new non-profit company will develop its new, leaner healthcare model and the choice to hire Atul Gawande as CEO is the first indication of the direction of travel.

There is widespread speculation that the Amazon joint venture will attempt to cut out the “middle man” in the US drug prescription and reimbursement system.

In the US, pharmacy benefit managers have taken on the role of running formularies for insurance companies, and removing this link in the chain and doing deals with wholesalers and manufacturers is one way the company could reduce costs.

When the joint venture was first announced shares fell in pharmacy benefit managers such as CVS Health Corp and Express Scripts because of concerns, given the disruptive influence that Amazon has had in other industries such as retail.

Reuters reported that Leerink Partners analyst Ana Gupte said that the appointment suggests that the coalition is not just looking at the “drug value chain” in isolation, but at the overall healthcare system across payers and providers.

This tallies with the views expressed in Gawande’s writing in the New Yorker magazine – in this article he explores the American attitude towards health, and how the benefits of a healthcare system can be more widely shared in society.

Gawande speaks of the “generations-old error of yoking health care to jobs” – suggesting that the kind of reform he would like to see extends far beyond tinkering with the drug prescription system in the US.

Photograph: Amar Karodkar