Quartz
The last time Atul Gawande started a company, he named it after a Greek myth.
Ariadne Labs, based in Boston, Massachusetts—where Gawande also works as a surgeon at Brigham and Women’s Hospital and teaches at Harvard—has been trying since 2012 to innovate in an area that has historically resisted innovation: healthcare delivery. You may not have heard of Ariadne, but you’ve certainly heard her story. It’s the one about the Labyrinth and the Minotaur.
If you don’t know her name, it’s because Theseus, the prince of Athens who eventually slays the monster, is cast as the hero of the tale. But a closer read makes clear that, really, it’s Ariadne, the princess of Crete and the minotaur’s half-sister, who matters. She falls in love with Theseus, and saves his life by wisely instructing him to take a ball of twine and attach the thread to the labyrinth’s entrance so he can find his way through the maze, and by bravely risking her life to hide his sword so he can retrieve it in time. Theseus kills the minotaur, escapes the labyrinth, and leaves Crete with Ariadne, bound for Athens and marriage.
Explaining his new company’s name and mission in 2013, Gawande told WBUR public radio, “We’re in the simple threads business, to show there are ways out of the labyrinth of healthcare complexity.”
Perhaps the most influential thing the lab has worked on is the development of healthcare checklists, based on Gawande’s hugely influential “safe surgery checklist.” After Gawande’s original checklist was implemented in eight hospitals as part of a study in the mid-2000s, post-surgery death rates in those facilities fell by 50%. Today, the surgery checklist is used all over the world, and Ariadne Labs has attempted to replicate its success by bringing checklists to other areas of healthcare delivery. It’s not a sword cutting off the head of the monster; it’s the twine helping to guide better decision-making.
Another thing that was likely left out the version of the Labyrinth myth you read in grade school: Ariadne and Theseus do not live happily ever after. On their way back to Athens, Theseus abandons Ariadne on the island of Naxos, where she dies, alone, as he sails back home.
Ariadne Labs is far from dead, though Gawande has stepped down from his role of executive director (he’ll remain chairperson of the company), and there are genuine questions about whether simple threads will always work. Many of Ariadne Labs’ recent efforts, including the highly publicized deployment of a World Health Organization-sponsored checklist to reduce deaths among newborns and their mothers in India, have failed.
Nearly six months later, almost nothing is known about Gawande’s plan for his second startup, other than that it will seek to provide the combined 1.2 million employees of its three sponsor companies with better healthcare at a lower cost to the employers than exists now. No one involved in the venture is speaking to the press about it. Emails sent to Gawande directly were rerouted to public relations, and attempts to speak to him by phone and in person were similarly forestalled.
But based on Gawande’s prior work, and on recent trends in employer-sponsored healthcare, it’s not hard to imagine what’s in store for the Amazon/JPM/Berkshire partnership. Despite huge improvements brought on by the 2010 Affordable Care Act, the US still lags far behind other similarly wealthy countries when it comes to healthcare penetration and efficacy. Gawande, who cut his teeth as a member of the Clinton administration’s healthcare reform team, has long been a critic of how care is delivered in the US.
Companies across all sectors, ranging from tech and financial services to retail and manufacturing, have, in the past five years or so, started to tweak their employee health programs to stem the rising costs of healthcare, which impact the bank accounts of both employers and employees. But simultaneously, facing a competitive labor market, more employers are seeing better employee healthcare as a differentiator that can help them recruit and retain the best of the best.
The problem is, the last time employers used healthcare this way, they laid the tracks that led to the very problems with the US system they’re now trying to solve.
The fact that most Americans get their insurance from their bosses has become such a given it seems strange to even question it. But really what’s strange is the system itself.
According to the Kaiser Family Foundation, in 2016, about 56% of Americans got health insurance through their employer. No other source of coverage is anywhere close.
That’s unique among wealthy, industrialized countries. “It doesn’t have to be this way. Other countries look at this model and go ‘that’s insane,'” says Bob Galvin, who runs Equity Healthcare, a Blackstone subsidiary that works to improve employer-sponsored healthcare across the private-equity firm’s portfolio of companies.
The strangeness is the result of a confluence of a unique set of circumstances in World War II- and post-war-era America. During the war, a diminished pool of potential workers forced employers, many of which were still ramping up work after the Great Depression, to compete more aggressively for the limited supply of labor. In 1942, US president Franklin D. Roosevelt’s National War Labor Board passed a rule preventing employers from raising employee wages—and exempted health insurance from the cap. A year later, the Internal Revenue Service decided that employers’ contributions to group health insurance policies were exempt from taxation.
Employers, of course, saw the opportunity: save money on their side, and dangle health insurance coverage as a carrot to bring in new hires and keep current employees who otherwise weren’t going to see much in the way of financial incentives from competitors.
In the post-war years, the US economy was buzzing. In 1944, unemployment dropped to 1.2% . For context, from 1969 to 2017, the unemployment rate never fell below 4%.
Low unemployment, combined with incentives to buy insurance through employers, meant very few Americans sought healthcare coverage outside of work. It all seemed so clever that “advocates for universal coverage shifted their strategy,” says Judith Feder a professor at Georgetown University’s McCourt School of Public Policy. Instead they focused their attention on getting the government to help a key demographic that couldn’t work: the elderly. This was another success, but in the process, it “legitimized employer sponsored insurance,” says Feder, creating a system wherein the US government essentially subsidizes private insurance systems for employees and their families, and offers public health insurance to only those specifically not expected to work. “The people who were left out, who worked low-wage jobs and didn’t get insurance through their employer, didn’t get Medicaid unless they were parents of dependent children,” Feder says. “Then, any attempts at trying to expand [the government programs] was seen as threatening the coverage people already had.”
Within a matter of decades, the system was broken, with millions of Americans left without insurance and the insured and uninsured alike facing spiraling healthcare costs.
According to the US Census Bureau, 8.8% of the US population, or 28.5 million people, did not have health insurance at any time in 2017. That’s a huge improvement over the 16% average in the 1990s and 2000s—the Affordable Care Act of 2010, also known as Obamacare, solved one of the huge problems created by the US’s employer-dominated insurance market. But the ranks of America’s uninsured are still roughly equivalent to the entire population of Australia.
Troublingly, even post-ACA, the country keeps spending more on health every year with little to show for it. In 2016 (the most recent year for which data are available), the US spent $3.3 trillion, or $10,348 per person, on health, a 4.4% increase from 2015. The US Department of Health projects those numbers to keep going up at faster and faster rates.
Another way to look at it: in 2016, health spending took up 17.9% of the US’s entire GDP. That puts the US quite literally in its own class compared to every other country, rich or poor, democratic or despotic, in the world.
That all might be fine—if Americans’ health was improving. But by most key measures, it’s not.
The US has a higher infant mortality rate than other wealthy, industrialized countries. Same goes for maternal mortality: American mothers are far more likely to die during and after childbirth than mothers in countries the US sees as its peers. Relative to comparable countries, the US has a higher mortality rate for heart diseases, lung diseases, nervous system diseases, endocrine and metabolic diseases, and mental health diseases. Americans also are more likely to die from accidents, suicides, and other external causes than people in similarly situated countries. In all of these key metrics, the US is getting worse, despite the growing amounts of money thrown at the problem.
The country, essentially, gets less for its health dollars than any other in the world. The simplest way to measure the overall health of a country’s citizens is through life expectancy. The US, with an overall life expectancy of 78.6 years at birth, rates relatively well compared with the global average of 72. But life expectancy in the US is basically the same as that in countries like Turkey and the Czech Republic, which spend far less of their overall GDP on health. Meanwhile, in countries like Canada and Japan, life expectancy is significantly higher than in the US, despite much lower health spending.
The market—with its foundations in the World War II-era expansion of employer-sponsored insurance—has produced a system of Haves and Have-nots, where the Haves overspend on bloated healthcare delivery and generally resist structural reforms they perceive as a threat, and a few Have-nots get zero care whatsoever.
Those on the political right decry any government efforts to cover the Have-nots, but, says Feder, “what drives the cost [of healthcare] is not trying to cover the people who don’t have insurance, it’s what we pay for the people who do have coverage.” The Haves drive up spending; the Have-nots bring down key health measures. And actually, so do the Haves, because there is no incentive in the current system to provide good care; the only incentive is to provide lots of care.
Trying to fix the problem from inside the swamp
For his entire adult life, Atul Gawande has been asking why we can’t fix this system. Like many who care about improving the health of Americans, he thought politics was the answer, at first.
Bill Clinton and his team had decided that one plank of his campaign platform would be a promise to solve one of America’s biggest problems: a lack of universal healthcare. At the time, about 17% of Americans didn’t have health insurance, the highest that number had been in over two decades, and there was a sense among pollsters that universal coverage could find the populist support needed to finally usher in changes to a US healthcare system that had become sclerotic.
Beyond the promise of universal coverage, the campaign didn’t have much sense of a plan. Gawande was invited to Little Rock, Arkansas, to help flesh out a program. For his age, Gawande had decent experience in politics. While still in school, he’d been an aide for Al Gore during the then-senator’s 1988 US presidential campaign, and later worked on health issues for Jim Cooper, a Tennessee congressman.
Perhaps Gawande felt at the time, as many did then and many still do, that the problems of public health in America could be solved through the processes of the venerable US democratic republic. It wouldn’t be long, however, before he was unequivocally disabused of this notion.
When he arrived in Little Rock, as Gawande would later recall to the New York Times, Clinton told him he wanted a plan that centered on “managed competition and that he had no interest in a broad-based tax.”
“Managed competition” was a great campaign talking point. The idea, that the government, through regulatory changes, could whip up the necessary market forces to provide universal healthcare, was progressive enough to appeal to the Democrats’ base, but not so progressive as to become a magnet for conservative attacks. Clinton won the Democratic primary and then the general election, unexpectedly beating incumbent George H.W. Bush. Gawande was moved into the role of deputy health-policy adviser for Clinton’s transition team, then made senior health-policy adviser to Donna Shalala, Clinton’s first secretary of health. Gawande was 28.
Soon after his inauguration, Clinton announced the formation of the President’s Task Force on National Healthcare, to be led by his wife, Hillary Rodham Clinton. Shalala (who in 2018 ran for and won a seat in the US House of Representatives, as a congresswoman for Florida) was put on the task force, as was Gawande.
Another member of the group, Robert Berenson, a veteran healthcare policy analyst now with the Urban Institute, says the task force was both a management and political mess. Shalala was sidelined by Ira Magaziner, a close confidant of the Clintons who was chosen to lead the task force. Under his leadership, those involved say, the initiative rapidly spun out of control. The team would be up until 2 am deciding on key nuances, only to find out the details had been changed by the time they were presented to the Clintons. The task force’s efforts were also shrouded in secrecy—in some cases, to the point of breaking the law. “When things were getting off track, no one wanted to go to the president to reel it in,” says Berenson, because the task force was the first lady’s project.
