JPMorgan Chase JPM has formed a new business unit, Morgan Health, to improve the quality, efficiency and equity of employer-sponsored healthcare.
In the United States, employer-sponsored health insurance is available to nearly half of the population. JPMorgan employs nearly 165,000 people in the United States and provides health insurance coverage to almost 285,000 employees.
The new venture has been formed with an aim to improve healthcare systems by working with a number of healthcare experts and partners, including provider groups, health plans, employers, and other organizations.
Dan Mendelson, the CEO of Morgan Health will lead the unit and will report to Peter Scher, JPMorgan’s vice chairman.
JPMorgan’s CEO and chairman, Jamie Dimon, stated, “We need to try to make the U.S. healthcare system work better. We 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. 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.”
Morgan Health aims to be a model for other employers. It seeks to partner with other firms to broaden its impact. However, initially, it will focus only on JPMorgan’s employees and families.
The core areas of focus will be to accelerate health system improvement through $250 million capital allocation to enhance employee health benefits through strategic initiatives and promote healthcare equity in the communities that the bank serves.
The unit will be headquartered in Washington, DC, and will partner with JPMorgan’s Benefits team nationwide.
Notably, in 2018, JPMorgan, Amazon.com AMZN and Berkshire Hathaway BRK.B created Haven, a venture similar to Morgan Health. Haven tried to improve primary care and identified areas for cutting prescription drug costs. However, it did not work very well and, hence, the unit shut down a few months ago.
Now, the leaders of Morgan Health plan to build on what they have learned through Haven. In fact, in addition to primary care, Morgan Health will study mental health care and ways to improve the treatment of people with chronic conditions.
So far this year, shares of JPMorgan have gained 26.5% compared with 32% growth recorded by the industry.
Currently, the company carries a Zacks Rank #2 (Buy).
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