A New Culture in Health Care

In the face of the American healthcare crisis, some companies have acknowledged the system’s effect on employee productivity and made healthcare reformation a priority. Amazon, JPMorgan Chase, and Berkshire Hathaway built a joint health care venture to re-examine insurance benefits, access to primary care, and pharmaceutical costs. Finding the right person to take the lead on this project is the first step in changing the lives of over one million employees between the three companies.

The following is an excerpt from Curable by Travis Christofferson. It has been adapted for the web.

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Listen to the following excerpt from the audiobook of Curable.

In the summer of 2009 Atul Gawande received a surprise in the mail. It was a check for $20,000 sent unannounced by a man named Charlie Munger. Admittedly, Gawande was confused. He had never met Munger or even ever corresponded with him. Gawande, then 43, was best known for his writing. He had penned two best-selling books, Complications and Better, and was a staff writer for the New Yorker, which had just published his article “The Cost Conundrum.” The article, which I touched on earlier, was a deep-dive into the massive cost variations to be found among local health care markets across the United States. The piece focused specifically on McAllen, Texas, one of the most expensive markets in the country.

Gawande had traveled there personally and uncovered the cause: a local culture of competitive entrepreneurship among the doctors that had manifested in “across-the board overuse of medicine.”

The McAllen doctors had been acting less and less like doctors and more and more like businessmen.

It was this article that had caught Munger’s attention and inspired him to impulsively write out a check for twenty grand and mail it to the article’s author. Gawande was given no explanation for the check other than that Munger had deemed his article “so socially useful.” Flattered, yet still confused by the spontaneous gift, Gawande mailed it back to Munger. “He sent it back to me again and said, ‘Do with it what you want.’” Gawande finally relented and donated the money to Brigham and Women’s Center for Surgery and Public Health, where he worked as a surgeon. The money was used to help supply oxygen monitors to low-income countries.

With this odd exchange behind him, and the money put to good use, Gawande settled back into his busy routine of operating, teaching at Harvard, writing, and lecturing. In 2010 Time magazine name Gawande one of the world’s most influential thinkers. In 2012 he published another New York Times best-seller, The Checklist Manifesto, and helped found Ariadne Labs, named for the Greek goddess who showed Theseus the way out of the Minotaur’s maze using a simple thread. Ariadne Labs served as a testing ground for high-impact “guiding threads” like surgical checklists—a bridge between Gawande and his staff’s innovative ideas about improving health care and their real-world implementation.

Gawande penned more award-winning articles for the New Yorker in the years that followed, and in 2014 he presented the BBC’s distinguished Reith Lectures, delivering a series of four talks in London, Boston, Edinburgh, and Delhi, entitled “The Future of Medicine.” Then, in 2018, Gawande again heard from Munger.

The true architect behind the Berkshire-Amazon-JPMorgan health care consortium is a man named Todd Combs, one of two investment lieutenants handpicked by Buffett and Munger to succeed them. It was Combs who, in the winter of 2018, had a flash of insight. Like a parasite, America’s health care crisis had infected Berkshire and was relentlessly siphoning away resources and productivity. But perhaps Berkshire didn’t have to passively allow the broken health care system to exploit their organization, reasoned Combs. Perhaps they could address it internally—fix it from the inside out.

Combs is cut from the same cloth as Buffett and Munger, his recruitment by the pair reflecting the self-sustaining culture that Berkshire has cultivated its entire existence. Like Buffett and Munger, he is in a perpetual state of learning. “I read about 12 hours a day,” Combs once reported in a rare interview. Like Buffett and Munger, Combs is a student of human nature. “He fascinated by psychology and the sorts of biases that drive decision-making. Books such as Talent Is Overrated and The Checklist Manifesto have become staples in the hedge fund world, where money managers are constantly looking for an edge. But Combs was interested in those ideas well before they became trendy,” said a colleague.

Steeped in Berkshire’s culture, Combs knew that his first steps in tackling a problem as complex as health care were to learn as much as he could, and, vitally, to pick the right person to lead the new venture.

This meant talking to hundreds of people and researching their patterns of thought and their track records. Gawande doesn’t recall exactly when Combs began considering him to head the consortium that he had been quietly putting together for months. But the leadership at Berkshire had noticed something extraordinary in him, and he had climbed to the top of their internal list. And then, in the summer of 2018, he received a call offering him a job. They asked him to be the chief executive officer of the Berkshire, Amazon, and JPMorgan health care company. He accepted.

It’s easy to see why he was picked. Gawande fits perfectly into the Berkshire culture. Like Munger, Buffett, and Combs, Gawande is often described as humble yet brilliant, and he’s a voracious learner. “I can’t think of anybody who’d be better. I don’t know of anybody who’d be better,” said Arnold Epstein of Harvard’s T.H. Chan School of Public Health. “He’s excited. He’s nervous. And he’s also incredibly humble,” said another colleague.

But the fledgling company, with its ambitious goals, does have its naysayers. “Just because you know an industry is underperforming and you have a lot of money doesn’t mean you have a successful strategy,” said Leemore Dafny, a professor at Harvard Business School. And Zack Cooper, Yale School of Public Health, tweeted: “I do hope Amazon, JPMorgan, and Berkshire succeed. Health care is wildly inefficient. However, it’s a bit like Mayo Clinic, Cleveland Clinic, and Partners in Health coming out and saying they don’t like their computers so they’re going to form a new IT company.”

But the consortium is under no illusions about the difficulties that they face. And while others may see Gawande’s relative lack of experience as a negative, Bezos sees it as a strength. “We said at the outset that the degree of difficulty is high and success is going to require an expert’s knowledge, a beginner’s mind, and a long-term orientation. Atul embodies all three, and we’re starting strong as we move forward in this challenging and worthwhile endeavor,” said Bezos.

For now, Gawande is tasked with delivering better and more efficient care for the venture’s 1.2 million employees. But the vision for the venture is much grander, and extends much further. If he can implement scalable improvements, then who knows? Other health systems may also adopt them. Politicians might even stand to learn from what Gawande and his team will do. Indeed, for three corporate giants, the goal of the venture is strangely altruistic. It will be set up as a nonprofit organization and serve as an incubator for ideas that, they hope, will be adopted around the world. “This work will take time but must be done,” said Gawande.

“The system is broken, and better is possible.”

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