On day 2 we heard from Mayo, Northwell, Promedica, Prisma, City of Hope, Mass General Brigham, Indiana U, Jefferson Health, Bon Secours Mercy and Spectrum Health.

Today we stay on high level themes.

Transcript

Today in health, it JP Morgan healthcare conference day two. My name is bill Russell. I'm a former CIO for a 16 hospital system. And create, or this week health at set of channels dedicated to keeping health it staff current and engaged. We want to thank our show sponsors who are investing in developing the next generation of health leaders, Gordian dynamics, Quill health Taos site nuance, and current health.

Check them out at this week. health.com/today.

JP Morgan day two is in the books. The nonprofit track is done. I've spent. Nine hours for the last two days. Sitting in front of my computer, listening to the CEOs and CFOs of nonprofit health systems present their strategies. , yesterday, today and tomorrow, as well as their financials. , on day two, we heard from Mayo Northwell, ProMedica, Prisma.

Health city of hope. Mass general Brigham, Indiana university health system, Jefferson health, bronze scores, mercy and spectrum health. Some good health systems to hear from, you know, we saw strong balance sheets. , COVID lessons learned outside investments were, , a big part of some of these presentations. I'm going to touch on that.

, I'm also going to touch today on a discussion of fee for service versus value based care, which popped up, , from yesterday's presentations. , keep in mind that today we're going to cover themes and starting tomorrow. We'll go into key moments from various presentations. I'm going to squeeze this orange for all the juice that we can get out of it. And then in a couple of weeks, we'll discuss this event with Rob DEMA, Shea.

Former UPFC CFO and compare notes. That's likely going to be on the keynote channel. So go over to iTunes and make sure you are subscribed to this week health. , conference, which is where the keynote show is actually on. All right. Let's get back to the themes. I I've never seen day's cash on hand. Be this solid for the whole group.

I would say 90% ish of the presenters. Or above 300 days and a few are actually over 400 days cash on hand. , the pandemic provided a shock to the system and caused, you know, , already conservative industry to become even more conservative as system CFOs moved to reinforce their balance sheets and shore up liquidity for emergency situations.

, given the conservative nature of healthcare, perhaps boardrooms, we're concerned about an unending pandemic, perhaps they don't want to go to the government or need government money. The next time something like this happens. , regardless, these players are ready for an ongoing pandemic or any other type of emergency. There's an awful lot of cash on hand, very strong balance sheets. And I think, you know, no one wants to get caught.

In that situation again. , it's important to note that this represents large specialty hospitals, IDs, and academic medical centers. All right. So when we look at, if you've looked at the list of all the presenters, that's, who's there. Right. So it's large children's hospitals, it's cancer centers. It's specialties, specialty hospitals, it's IDN, and as academic medical centers.

of stuff. The investments in:

, you know, these smaller systems, they're not. Sitting on a hoard of cash or investments. , this coupled with the dramatic increase in the cost of delivering care that we spoke about yesterday will present another stress on our system. As smaller health systems will likely begin to fail in larger numbers, , or need to be acquired. So.

, keep an eye on that as the year progresses. , let's talk COVID lessons for one second. , systemness paid dividends during the pandemic systems. With a common EHR governance, data sharing and analytics systems, common digital platforms for scheduling and communication. , these systems were rewarded during the pandemic.

, the leadership team in these systems. , they, they were able to be responsive. They were able to stand up new capabilities as needed. Most of these systems are, , you know, examples of this, but I'll call out a few Mayo Northwell. , chop children's hospital, Philadelphia. , all demonstrated advanced analytics, predictive models. ,

To ensure staffing. , equipment and supplies and explore more. Effective methods for care for COVID patients. So, , You know, most, most systems have demonstrated a great deal of learning through the pandemic. With the third wave, not being nearly as impactful and actually third, fourth wave it's. , you know, it, it really depends on where you're at, whether you're experiencing.

, second, third or fourth wave. Not really sure. , it really has impacted the country. Just a little different at different times, I guess I would say, , the staffing challenges. Our acute compared to the first wave as we discussed yesterday. , but the cultures have adapted to the rapid emergency response needed to care for their communities.

A problem that has been thrown out there. And I've spoken with CEOs that are experiencing it is length of stay on this third or fourth wave, depending on. On your geography. , it's, it's not that the patients are not able to be discharged and there's no medical reason to not discharge them. However, there's nowhere to send them.

All right. So we have patients are, are really stacking up in holding areas because they can't be sent back to nursing homes and other venues have nursing shortages. , this has placed a strain on health systems who are exploring discharging to the home and other creative models. So it's, it's important to note that we think, oh, this, this Omicron isn't as deadly and it isn't as.

, people aren't getting as sick and that may be true. , based on the information we're reading right now. , but health systems are still, , holding people because there's nowhere to send them. Very interesting problem. I heard, , , I've been hearing lately. , I'm watching more and more health systems become investors.

No, not as a side gate, by the way, but as a primary capability in growth strategy. , I think John Starcher captured this the best. , John Starcher is the CEO from Bon Secours mercy. , he spent a few minutes outlining the new organization that they've stood up to make strategic investments as a growth strategy. , they aren't the only one, , Northwell Mayo Intermountain Ascension has been doing this for years.

As have a UPFC and Providence. , this is not a. You know, it's not a new battleground for health systems. Eh, or an area of competition for health systems. This really has a whole economy around it. , that we're probably going to discuss at some later point on this show. We'll, we'll get back to this, but I just suffice it to say.

That, , we have more competitors they're competing on a new level, right? They're competing on the investment level. , it used to be that there was just a handful of health systems and now we're seeing. , the next generation of health system step into that. , investment deal flow that whole, , whole aspect of it.

You know, at least three health systems mentioned their investment in Truvada as a data point for turning their assets into working investments. , I'll be honest. This particular investment has me a little worried. , I've seen this security and privacy architecture for large data repositories health catalyst.

, even Cerner and epic and they are extremely strong with the right emphasis on patient privacy. , Mayo has demonstrated a similar architecture that, that protects patient data. I believe even further. And I would, I'm just going to keep an eye on this one. I'm going to be watching true Vita because I'm not hearing or seeing the same attention to detail just yet.

, smart people with good intentions, for sure. But I hope the dollar signs don't, , Trump, what is, , a necessary level of privacy and security precautions? , anyway, that's a side note finally, , I want to talk about this, this thing that popped up yesterday, it was on social media. It's it showed up in a couple of news articles on the JP Morgan conference. And that is the stark contrast between Ascension and Intermountain with regard to fee for service.

At value based care.

I'm just going to comment on this real quickly, the essential presentation, they talked about the fact that over 90% of their revenue comes from fee for service. They talked about the challenge of, , commercial payers and government payers, , in regard to setting up more value-based care contracts.

And then you had inner mountain talk about the fact that over 50% of their revenue now comes from value-based care contracts and those types of things. And Bert Zimmerli. Who's the CFO for Intermountain spoke. , very eloquently and very forcefully in talking about the fact of the. Uh, perverse incentives that exist within a fee for service and that they were going to grow in a value based way.

So people heard that stark contrast, right? Intermountain heading in the value-based care direction. , essentially saying, look, it's going to be three years or more before we're going to see our revenue from fee for service drop below 90%. And much was made about that. It showed up in a bunch of news articles, as I said earlier, , my, my take on that.

You have two very different health systems. I mean, just pull up a map of the geographies of the two and you'll see the distinction between the two health systems. Essentially in a lot more markets they're spread out significantly. Geographically across the country. , they're in rural markets that are not nearly as healthy as Intermountain's core markets are. Uh, you know, if you're going to take on risk for a population, it helps to have a fairly healthy population to start. So while I really appreciate what Intermountain has done, I'm a huge fan of what Intermountain has done.

I'm a fan of their direction. And I believe that that health. , versus health care, sick care is the way to go in our system. I think it's dangerous to compare these two and say, oh, look, one system can do this with the other system. Can, there's an awful lot of variables at play here. , that needed to be taken into account in order to understand why it's going to take essentially a little longer. To go down this value based care path then it took a intermountain so i just wanted to touch on that at the end of this episode and we are out of time

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