Becker's Hospital Review

90 THOUGHT LEADERSHIP Jefferson Health CEO Dr. Stephen Klasko: Amazon, JPMorgan, Berkshire Hathaway Venture a 'Landmark Event' By Morgan Haefner A mazon, JPMorgan Chase & Co. and Berkshire Hathaway unveiled plans to launch a new healthcare company aimed at cutting costs for their U.S. employ- ees Jan. 30. However, reactions have varied. Healthcare stocks took a $69 billion hit as investors re- sponded to Amazon's long-anticipated en- trance, Reuters reported. At the same time, STAT reported several healthcare experts have raised doubts about the announce- ment's effects, citing a lack of detail in the companies' 394-word press release. Stephen Klasko, MD, president and CEO of Philadelphia-based omas Jefferson Uni- versity and Jefferson Health, said the an- nouncement represents a watershed moment in healthcare. Since taking the helm of Jef- ferson Health in 2013, the system has grown from three hospitals to 13 and achieved the No. 16 spot on U.S. News & World Report's Best Hospitals list for 2017-18. Dr. Klasko spoke with Becker's Hospital Re- view about his reactions to the new Amazon/ JPMorgan/Berkshire Hathaway venture and what it means for healthcare executives. Question: As the CEO of a 13-hospi- tal system, you bring a unique per- spective to the question: "What does an Amazon, JPMorgan and Berkshire Hathaway collaboration mean for healthcare?" Can you share your per- spective and initial reactions to the announcement? Dr. Stephen Klasko: It's an amazingly inter- esting development. In some ways, I wasn't surprised. It's obvious our industry is going through one of those once-in-a-lifetime changes, from hospital companies that are run by doctors and administrators to con- sumer healthcare where the patient is the boss. Employers have tolerated incremental chang- es in healthcare while every other part of our lives has been transformed by technology, innovation and creativity. If you're Amazon, you're looking and saying, "Gosh, I can get this product to someone's house by same-day delivery, or do an automated grocery store, but I can't get a believable, understandable bill?" I think [the Amazon/JPMorgan/Berkshire Hathaway collaboration] is a landmark event. It's finally gotten to the point where these employers say, "We don't think you guys see the burning platform." Q: What are you hearing from other industry leaders on the issue? SK: I'm in a conference with a lot of indus- try leaders. Probably since the CVS Health/ Aetna announcement, [Jefferson Health] has been getting calls from unlikely sources — from national insurers, from other health systems, from alternative delivery companies — about really innovative partnerships. As far as other academic medical centers' leaders, I think they fall into three catego- ries. One is folks saying, "I knew I needed to change. But now CVS/Aetna, Providence/As- cension and Amazon/JPMorgan/Berkshire Hathaway, it's clear. I'm going to go all in and take some risk." Some are in denial, or at the point in their career when they don't want to change. I hear a lot of folks still say, even af- ter yesterday's announcement, it's not going to change, that this kind of thing happens all the time. ere is a third group that's saying, "I have to transform. My board is looking over me and is still looking for the least risky way to transform the organization." Q: What does this venture mean for healthcare executives? What, if any, response is needed from them? SK: I'm going to expand it beyond health- care leaders to health policymakers. What we need is almost a 9/11 approach to the crisis in healthcare. at crisis is why healthcare escaped the consumer revolution. We feel comfortable. If you think about the 9/11 commission, aer everyone got done blam- ing each other, they said, "We failed to keep the country safe." And they brought smart people from inside and outside the industry to say, "We have to change this." We also have to accelerate physician lead- ership so the immense changes we need to make in cost, access, patient experience and quality … that that burning platform can be shared. We're not prepared for that as physi- cians. We don't spend nearly enough to get the entire workforce into the future. Q: In your opinion, what comes next? Do we see similar partnerships crop up? Is this really a "watershed" mo- ment in healthcare, as it's been de- scribed? SK: I think it is a watershed moment. I think what is going to happen now is the most in- novative employers are going to recognize their employees are not getting the cost, ac- cess and quality they need. With retail, Ma- cy's, Sears and JCPenney didn't move. Tar- get and Walmart, those able to adopt some of the things that Amazon has done, have done well. ey're tired of a million explana- tions around transparency. I think what will happen is other employers will join on the bandwagon — look for places that embrace that mentality and are ready to join with Jeff [Bezos], Jamie [Dimon] and Warren [Buffet] in the revolution. e other thing that this will force is a discus- sion around the concept of your zip code be- ing more important than your genetic code when it comes to health — the whole issue of social determinants of health. We don't deal with that because hospitals are competing with each other and are just concerned about what happens if somebody comes into their office or hospital. I think these CEOs [Jeff Bezos, Jamie Dimon and Warren Buffett] are keen on and going to ask us to look more closely at that. n

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