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UnitedHealth loses the case to the healthcare Begun of Amazon, Berkshire-Hathaway and JPMorgan Chase



On Friday, United Health Group, the gigantic health insurance company, lost its case to prevent a former leader from working in the new healthcare venture formed by three strong companies, Amazon, Berkshire Hathaway and JPMorgan Chase.

A federal judge in Boston denied UnitedHealth's request to have executive, David William Smith, immediately stop working. Mr. Smith was a leader of Optum, a unit of UnitedHealth, and it accused him of taking the company's secrets to what it claimed was a competitor. Mr. Smith has denied any offense.

In his legal submission, UnitedHealth claimed that Mr. Smith's role in Optum made him aware of sensitive information about his plans. Among Optum's businesses is one of the country's largest pharmacy benefits managers, acting as intermediaries between drug manufacturers and employers who buy medicine for their workers.

The industry has been heavily criticized for lack of transparency on how the pharmaceuticals benefits managers operate, and Optum's two largest rivals were recently merged with two major insurance companies, Aetna and Cigna.

While Judge Mark L. Wolf counted on it, Optum emphasized that the problems remain unresolved and had to be resolved in arbitration. "We are committed to protecting our confidential information and will aggressively do so in arbitration," said Matt Stearns, a spokesman for Optum, in an e-mail statement.

A spokeswoman for the new venture, referred to as "ABC" or "ABJ" in court papers, refused to comment. Unlike litigation, the arbitration sessions would not be public.

The case against the nascent venture has highlighted the anxieties of established insurance companies and the pharmacy's administrators of newcomers to their territory. From start-up to giant technology companies, the new rivals threaten to unseat companies, such as UnitedHealth, which traditionally dominated these markets. Amazon, which has made preliminary forays in the pharmacy, has emerged as a particularly worrying competitor.

The legal quarrel, which contained testimony that was omitted by the judge earlier this week, also revealed new details about the powerful triumvirate plans. While companies have said that the new venture was not created to generate profits, they have been cryptic about exactly what changes they could make to reduce costs and improve the quality of care for their employees. The company made headlines last summer with its choice of CEO, Dr. Atul Gawande, a professional doctor who writes for The New Yorker.

The legal measures also emphasized how unhappy customers – especially these three employers – are with the status quo.

"We have been asked to solve a very big problem, which is to find out new ways of health care," John C. Stoddard, a head of the new venture, testified.

The three employers combine spending about $ 4 billion a year on about one million people they cover. But employees have poor experience, says Stoddard.

"They don't get the care they need and the costs continue to rise," he said. "We didn't want to exist unless there was a need to come up with a new solution to the problem."

The venture, which has no name and fewer than 20 employees, is planning to tackle more areas, including how the benefits are provided through traditional health insurance plans, Stoddard said. High deductions, forcing employees to pay for significant amounts of care before their insurance goes in, is a hassle for "fulfillment center workers and call center workers," he said.

Companies will also see if they can reduce the cost of medication for chronic conditions. In his testimony, Mr. Stoddard insisted that the new venture had no plans to enter the pharmacy, but wanted to better understand the process and the actual cost of drugs.

"It doesn't make us a competitor," he said. "It makes us a very informed customer."

Employers will also make it easier for workers to see a doctor, witnesses Stoddard. Because Optum also runs a large network of primary healthcare professionals, the risk may want to work with Optum to provide employees with easier access to doctors.

"Therefore, this is so crazy for me that they think of us as competitors, when I see ourselves as potential partners," says Stoddard.

Like other large employers, the companies will also see if they can utilize medical and hospital data

Venturen plans to conduct a series of experiments to test new approaches for smaller groups of employees with different partners, including Optum, Stoddard said.

But while Stoddard would not rule out the possibility that venture could be a competitor, he stressed that it had another purpose. Unlike Optum, whom he described as trying to maximize profits, the new organization is trying to create value for families trying to use health care , he said.


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