JPMorgan Chase & Co. is taking another shot at trying to make health care less expensive for companies and better for workers in the U.S.
The largest U.S. bank is launching a business called Morgan Health aimed at improving employee benefits and promoting health equity, first for JPMorgan’s workers and then for other large companies.
With a $250 million investment arm and a remit to accelerate innovation in employer coverage, Morgan Health is a sign that large companies still want to influence a U.S. health-care system notorious for high costs and lagging outcomes.
Companies have a mixed track record in trying to tame health care costs and make benefits work better for their employees. The announcement follows the wind-down earlier this year of Haven, JPMorgan’s joint venture with Amazon.com Inc. and Berkshire Hathaway Inc. that sought to reinvent employer-based health care. Even with their economic might, the three companies were unable to generate much momentum to re-order health plans.
JPMorgan is betting that by trying new ideas inside the bank, it could find solutions that might work for others.
“We have an opportunity here to not only provide enormous benefit to our firm, our employees and their families, but ultimately create solutions that can be brought to bear throughout the United States,” Peter Scher, vice chairman of JPMorgan, who will oversee the venture, said in an interview.
High Premiums
Employer plans in the U.S. cover 158 million people, half of all Americans. About a third of health consumption spending flows through private health insurance paid for by employers and households.
Typical premiums for a family health plan now exceed $21,000 annually, close to one-third of the median household income in the U.S.
Despite their role in financing so much of health care, big U.S. companies have had limited influence in shaping what they’re ultimately paying for. Innovations in care delivery and linking payments to health outcomes in the past decade have largely been in response to policy changes from Washington, not private markets.
“We’re looking to drive meaningful innovation in quality, and in health equity, and in keeping costs under control,” Dan Mendelson, who joined the bank recently to lead Morgan Health as chief executive officer, said in an interview.