Rachel Woods: I should acknowledge at the start that I am not sure that our listeners fully understand what Morgan Health is and the role that you play in the healthcare space. In fact, I think most folks may not even realize that Morgan Health is part of JP Morgan and that this is not JPMorgan Chase's first attempt to enter the healthcare space. So tell me what Morgan Health is and what's different about your organization's role.

Rivka Friedman: So Morgan Health is, as you said, a part of JPMorgan Chase. And we were founded in the wake of Haven, which was JPMorgan Chase and Amazon and Berkshire Hathaway's joint venture focused on reducing employers healthcare expenses.

We were founded in the wake of Haven winding down, really focused on the employee side of employer sponsored insurance. So our mission is to improve the quality, equity and affordability of employer sponsored healthcare, but from the employee's perspective, we want to make care better and cheaper and higher quality.

Woods: And I actually think that shift is really, really interesting because we're having this conversation in a moment in time in which every employer is saying, and frankly has been saying that their costs are unsustainable. They've been able to sustain their costs up until now, but there's some signals of why we're seeing employers and we're going to mess the employer and employee word up several times in this conversation. There are some signals of why employers are getting a little bit more active.

It's interesting to me that in this public shift away from Haven, restarting again, that you've moved from focusing on employer costs and saying, "Actually we need to focus on the employee." Tell me about why that shift was so important.

Friedman: It is a bit of a misstatement on my part to say that we're not focused on the employer piece of this because so much of the transformation has to happen with employers really taking the reins of their healthcare expenditures and also just their healthcare choices that they're making for their employees.

But I think some of this came out of a recognition that employer healthcare costs have been growing for as long as I can remember, and they're unlikely to stop. So if we said that we were focused on reducing employers healthcare spend, our CEO, Jamie Diamond would probably say, "Don't break my heart twice." So that's some of it.

The other piece of it is we so often ignore or overlook the employee as key stakeholder that we're serving. And I experienced this when I was at CMS and we were focused on trying to improve Medicare and Medicaid, and often would have somebody in the room say, "But what about the beneficiary?" So we are really trying to take a patient-centered approach to this work.

Woods: And I think it's right to remind our audience, remind me, that we can't really untangle these two pieces, and I want to do something maybe dangerous with you, Rivka. I want to actually gut check with you the way that our research team is currently thinking about the employer side.

So we're thinking about what should the employer's role be in this world and where costs are unsustainable? And let's be honest, our playbook hasn't really worked up to this point.

So we're thinking about this in two ways — we're thinking that solutions for employers need to first have some cost savings potential for the employer. That's their goal. But the second part of the equation, and this is really important, is that tools aren't going to work if they're really disruptive for employees or if they're really disruptive for the employer to actually resonate. How do those two criteria resonate with you when you think about your work at Morgan Health?

Friedman: I think the research team crushed it. I'm proud of my former colleagues. I think those two things are both right. So we absolutely need to be thinking about the employer's spend, even if we aren't promising them that it's going to go down based on last year's spend. Because as you noted, spend is getting unsustainable.

And I've been saying that myself in my career for at least a decade, but we've gone through waves with the recession and then the bounce back from the recession and more recently with inflation. And I think this has been a trend that has ebbed and flowed, but is likely to continue. In particular with inflation often affecting staffing and then healthcare on the lag, we are likely to see huge cost growth in employers healthcare burden from this year to next year. So that has to be a piece of the equation.

And to your other point in my conversations with benefits professionals, I am constantly hearing, but we can't because that causes disruption, and I don't want to minimize that as a consideration. It's incredibly important for employees to feel a measure of predictability in what their healthcare will look like. And that's not just how much it'll cost, it's which providers they have in their network, what's covered, etc.

Woods: And again, probably something that you felt in your time at CMS that, sure, we can tell people that they have a closed, very, very, very ultra-narrow network that they can only go to for their care, and that's not palatable for most people. From the employer's perspective, they're also thinking about, how do I keep these people loyal to me, engaged with me as their employer, which is why that is so important.

Friedman: I would challenge the notion that we can't try things like narrower networks, even in an environment where we're trying to make sure that employees feel minimal friction. And I say this in part because of the conversations we've been having about this with Santivo, which is a company in which we've invested, and also with employers who are increasingly asking, is there interest in narrowing a network which would enable us to offer high quality care at a lower cost for our employees?

In the time that you and I have been working in this field, we have tried everything and it turns out costs keep growing. So I am seeing more interest from employers and saying, "What maybe haven't we tried in a while because it was unpopular that we might consider trying now?"

Woods: And there's two things that I think I'm hearing from you. One is that it's not so black and white. We absolutely cannot think of narrow networks and open networks and just say there's two options and there's nothing in between.

The other maybe bigger and more important lesson that I'm hearing from you is we have to keep experimenting because what we have tried has not worked very well thus far. The tools in our toolbox have run out when it comes to things like high deductible health plans. So we need to keep innovating and figuring out what the next steps are. And that I think is a particular mindset that Morgan Health has just run at that perhaps others have not. So tell me more about your approach to testing, maybe failing and testing again.

Friedman: I think you hit it. So we are in many ways learning from the work of the Center for Medicare and Medicaid Innovation where I worked previously, where some of my other colleagues have worked previously. And the ethos of CMMI is and has been let's test things. And when things don't work, we will learn from them. And when things do work, we will then figure out how to bring them to scale.

So that's the mindset that we have for our work here at Morgan Health. We are testing a range of things. We are testing them internally with JP Morgan employees, and we are testing them externally with our portfolio companies, but in other employers. And our mindset is some of these things will fail, and we hope very much that we will see some of them fail and then learn from those failures. But some of them will succeed.

And when I say some of them, we could be talking about something as big as a whole pilot, improving quality and lowering costs, which would be a thrill. Or we could talk about a specific element of a pilot working.

So for example, we have piloted primary care onsite in Columbus for all of JPMorgan Chase employees in Columbus with a company called Vera Whole Health. A new part of that pilot is thinking about other needs that people have that aren't solely clinical like food needs or transportation needs. And we are starting to think with Vera about how to address those needs.

So we could see successes in a narrow way with specific elements of a pilot that we implement working for people. And again, that would be as much of a thrill.

Amid a changing cost landscape, self-funded employers are looking for ways to provide employees with attractive, cost-effective health benefits while managing annual spend. This guide will help you understand the top priorities and strategies of self-funded employers, from navigating the booming market of high-cost drugs to integrating virtual health offerings.