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Boston’s Healthcare Establishment Welcomes Amazon Disruption With Open Arms

What could materialize into the healthcare industry’s biggest disruptor has chosen Boston for its headquarters, but the city’s industry establishment isn’t exactly quaking in its boots.

The Longwood Medical Area, Boston's healthcare hub

Amazon, Berkshire Hathaway and JPMorgan Chase selected Boston last month as the headquarters for a co-venture that is expected to offer an affordable healthcare option for the trio’s hundreds of thousands of employees and, potentially one day, the entire country. 

“Healthcare is an industry as ripe for disruption as the taxi industry was a few years ago. It’s hugely complex, with several sub-industries that really need to be looked at all at once,” Dana-Farber Cancer Institute Senior Vice President Elizabeth Liebow said. “On the one hand, I find the task to be daunting, but on the other, these are three organizations who could do it extremely well, and I’m thrilled they’re taking a stab at it.”

Stocks may have tumbled in January at the simple announcement that three of corporate America's biggest names were dipping their toes into the costly healthcare pool, but Partners Healthcare Vice President Dr. Joseph Kvedar sees the selection of Boston-based Brigham & Women’s Hospital surgeon Dr. Atul Gawande to be the upstart’s CEO as an indication the brand will be a quality one no matter the incarnation it may take.

“He’s one of our guys,” Kvedar said. “He’s well known and well respected in our community and beyond. We feel a special kinship because he trained at the Brigham. That takes the edge off, because we know him and know his integrity.”

The general and endocrine surgeon chosen to run the still-unnamed company is a Harvard Medical School and Harvard T.H. Chan School of Public Health professor.

While little is known about the co-venture, it is the latest shock to the healthcare industry. CVS Health Corp.’s $66B bid to buy health insurer Aetna would create the second-largest company in the country and has the potential to bring omnichannel retail into the healthcare orbit. Walgreens was in talks to acquire wholesale pharmaceutical distributor AmerisourceBergen, but the potential deal has since cooled.

Dr. Atul Gawande, the new CEO of the JPMorgan Chase, Amazon, Berkshire Hathaway healthcare venture

“Whether it’s an organization like the one Atul’s building — and we really don’t know what he’s up to — or CVS or Walgreens, any of those could be a threat to our basic business because others are chipping away at primary care and chronic care delivery, and those are areas that are important to us,” Kvedar said.

As with many industries, healthcare is facing its own issues in attracting top talent. Liebow — who is speaking at Bisnow’s State of Boston Healthcare event July 26 along with Kvedar — said older generations would spend more time at the same company, but millennials spend less time at a job and even frequently change industries. She optimistically looks at the Amazon healthcare co-venture as an opportunity to transform the industry and make it more appealing to desired talent.

“As an employer, it will make us more competitive for millennials and I think in a good way,” Liebow said.

The optimism shouldn’t be mistaken for complacency. Dana-Farber is embarking on its own disruption by changing the way it provides oncology care. The organization is opening several suburban treatment centers to be closer to where patients live. It is also at the beginning of an initiative to improve communication between patients and their providers, something Partners Healthcare is also exploring.

Dana-Farber Cancer Institute, Yawkey Center for Cancer Care

“We have to pay attention, be on our toes, be nimble and reinvent ourselves,” Kvedar said. “It’s a wonderful time to be in healthcare. Suddenly I’m relevant! I’m all for it.”

Kvedar said every industry is recognizing the future is mobile, and healthcare should be no different. It is easy to get bogged down in phone calls when trying to schedule a doctor's appointment, so he said mobile devices can put more power with the patient, citing Boston-based Iora Health particularly.

The primary care network that focuses on Medicare patients over the age of 65 has reduced healthcare spending for members by up to 20% and saw a 40% decrease in hospitalizations. Patients received in-office care as well as contact with their providers through email, text messages and phone calls. 

“We have to move to a way where you’re more in charge, use your own tools and maximize your time with your doctor and minimize the distraction,” he said. “If we do it well, we will maximize our efficiency and you’ll be more cared for.”

To hear more from Liebow, Kvedar, and other Boston healthcare experts, attend Bisnow’s State of Boston Healthcare event July 26 at the Westin Copley Place.