JPMorgan's new health business makes heavy investment in health startup

JPMorgan launched a new health unit — Morgan Health— in May. The banking giant chose to go solo, avoiding the path of the disbanded joint health-care venture formed by Amazon, Berkshire Hathaway, and the biggest US bank by assets.

The companies announced that it was best for each company to be run by itself to lower costs and improve outcomes for their employees. Shortly after, JPMorgan announced in May that it was launching Morgan Health to improve the quality of medical care for its 165,000 U.S employees and their families. The health business unit is led by Dan Mende

Son, a healthcare consultant who served in the Clinton administration.

Besides offering quality healthcare to employees and their families, Morgan Health also set aside $250 million to invest in companies with "promising healthcare solutions", the company said. Through this the business hopes to better penetrate the highly competitive American health system.

The bank disclosed recently that it has made its first investment worth $50 million in healthcare startup Vera Whole Health, a Seattle-based startup that is pioneering a subscription type model for employee healthcare. JPMorgan's employees will begin receiving Vera's services during benefits enrollment season this fall, according to both companies.

"We have the best healthcare in the world in terms of doctored, hospitals, pharmaceutical and medical device, but we certainly do not have the best outcomes," said CEO Jamie Dimon, in a statement. "There are ways we can make significant improvements and we intend to take a disciple approach to solving some of these issues in a meaningful way."

JPMorgan will be among the first big corporate companies to partner with Vera to provide a real

world test for a paradigm shift that could confront one of the core issues facing the United States, despite investing trillions of dollars on the American healthcare system in recent years.

Since its founding in 2008, Vera has been on a mission to improve outcomes for workers and reduce costs for companies by making primary care team responsible for employees' health. Companies or employers pay a fixed monthly fee per employee and primary care doctors are given the responsibility to coordinate their users' care. Vera has an advanced care model that requires it to either operate or partner with clinics that work differently from the traditional system.

"In traditional model, providers are paid based on the volume of procedures; it's a highly transactional system which I think creates some perverse incentives," said Vera CEO Ryan Schmid. "In our care model, our teams are paid as a,army plus bonus, and that bonus is tied specifically to their outcomes."

The use of Vera will be optional for employees. However, Mendelson says it provides a "higher level of care" that would most likely become sought after once the benefits are recognized and appreciated.

The healthcare's approach involves an encompassing view of a patient's health, going beyond physical ailments to higher patient engagement and emphasis is placed on mental well-being to detect some types of diseases or prevent them. Vera believes in giving companies value for their money and would ensure that patients get maximum satisfaction from their services.

"We want to know that our employees are getting screened for cancer," Mendelson said. "We want to know that our employees are having wellness visits, that if they have high cholesterol they're actually taking their medicine. That is all about setting up a model where you have a group that is responsible."

Only JPMorgan employees in select regions will have access to Vera healthcare this year, since the model is not easy to execute.

 Vera's primary health care centers are located in ten states. It also partners with Central Ohio Primary Care, that largest independent doctor-owned primary are group in the US. The banking giant also runs a technology hub in Columbus with thousands of employers, which means the region may likely be selected.