Human Capital & Careers

JPMorgan Unveils New Health Care Venture

The banking giant's new Morgan Health business unit "aspires to be a model for other employers."
Matthew HellerMay 20, 2021

Three months after abandoning a joint venture with Amazon and Berkshire Hathaway, JPMorgan Chase is taking another swing at disrupting corporate health care.

The banking giant announced Thursday it had formed a new business unit, Morgan Health, that will focus initially on employees covered under its own health care plan but “also aspires to be a model for other employers.”

Morgan Health will be provided with $250 million to invest in “promising health care solutions and overall system improvements for the benefit of JPMorgan Chase employees and the broader employer-sponsored health care system.” The company offers health insurance to 285,000 employees and dependents.

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“JPMorgan Chase has been focused on improving health care for its employees for many years,” Dan Mendelson, Morgan Health’s new CEO, said in a news release. “We are going to take what we’ve learned and accelerate health care innovation in the employer-sponsored healthcare market, partnering with and investing in companies that share our goals, and measuring key health outcomes to show what works.”

As Business Insider reports, Morgan Health is “the latest effort by a huge, non-health care company to help fix the $3.8 trillion industry’s great paradox. Despite the increasing and sometimes crippling cost, the U.S. healthcare system underperforms similar countries on multiple fronts, from life expectancy to the prevalence of chronic disease.”

Haven, the joint venture between JPMorgan, Amazon, and Berkshire Hathaway, was formed in January 2018 amid expectations it would disrupt the health care system by testing new ideas on more than a million employees.

According to former Haven CEO Atul Gawande, however, it wasn’t given control over the companies’ benefits, which made it difficult to roll out any program at scale.

“JPMorgan is betting it will have better success on its own, in part by focusing on local providers and partnering directly with provider groups, insurers, and other organizations,” CNBC said.

But health economist Paul Keckley said it’s tough for just one employer to have a meaningful impact on health care costs, which vary tremendously around the country. “It’s just hard for these companies to change physician behavior or hospital cost structure unless they get scale,” he said.