JPMorgan unveiled its second attempt at reforming the employer-sponsored coverage market on Thursday, launching a $250 million investment arm named Morgan Health.
Morgan aims to improve a space responsible for purchasing insurance coverage for almost half the U.S. population, by investing in innovative startups, internal pilots and forging industry partnerships. The effort comes as employee healthcare costs continue to rise. From 2010 to 2020, annual premiums for employer-sponsored coverage increased 55%, reaching $21,342, according to the Pacific Business Group on Health. A recent survey by PGBH found that nearly nine out of 10 business leaders said that the cost of providing benefits would become unsustainable in the next five to 10 years.
“We (the U.S.) have the best healthcare in the world in terms of doctors, hospitals, pharmaceutical and medical device companies, but we certainly do not have the best outcomes,” JPMorgan Chase CEO Jamie Dimon said in a statement. “Many of our problems have been around for a long time and are not aging well. There are ways we can make significant improvements and we intend to take a disciplined approach to solving some of these issues in a meaningful way.”
The initiative comes just three months after Haven—JPMorgan’s joint venture with Amazon and Berkshire Hathaway—fizzled out.
Unlike Haven, Morgan will focus first on cutting healthcare costs for the bank’s 165,000 employees and their 285,000 dependents. The D.C.-based company will work with the company’s Benefits team and insurance carriers to evaluate and identify new employee health options. CVS Health—which owns insurance carrier Aetna—already announced it planned to work with Morgan. Haven, meanwhile, had aimed to combine resources across the three companies and disbanded in February after failing to land a concrete strategy for cutting costs across industries.
Over time, Morgan will expand its reach and attempt to create benefits structures that other employers can use. Eventually, Morgan will collaborate with provider groups, health plans, employers and other organizations aimed at reforming the healthcare system.
“JPMorgan Chase has been focused on improving healthcare for its employees for many years,” Morgan Health CEO Dan Mendelson said in a statement. “We are going to take what we’ve learned and accelerate healthcare 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.”