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January 20, 2020: It’s time for another Tuesday Newsday and in today’s iteration, we will be doing a debrief of the last two years of J.P. Morgan Healthcare Conferences. This annual event is the largest and most informative healthcare investment symposium in the industry, bringing together industry leaders, emerging fast-growth companies, innovative technology creators, and members of the investment community. Joining this episode, you’ll hear the biggest themes and takeaways from this year’s presentations in the nonprofit track, along with a recap of the major ones from last year too. Unsurprisingly, there was a major carryover of many of last year’s themes: things like trust, partnerships, and efficiency. Some of the exciting new areas of discussion that have come to the fore in 2020 are topics like asset-light solutions, customer experience, and the ‘He Who Must Not Be Named’ of healthcare that is making all of the old players rustle their feathers in a major way.

Key Points From This Episode:

  • An introduction to the J.P. Morgan Conference: a healthcare symposium merging many fields.
  • Today’s agenda: to recap highlights from last year and this year’s J.P. Morgan presentations.
  • A rundown of the 27 healthcare institutions who did presentations at the conference.
  • 2019 presenters: mergers, traditional players, specialty providers, and innovators.
  • Two types of specialty players: the global player and the research player.
  • Themes from the 2019 conference: good financials, mergers, self-disruption, trust, and more.
  • Other themes from 2019: efficiency, social determinants, and partnerships.
  • Reasons for a theme overlap: issues typically move in 18 to 36-month cycles.
  • Why mergers as a theme did not carry through into 2020.
  • New themes from this year’s conference.
  • How the topic of risk, covered lives, and getting paid to keep people healthy cropped up a lot.
  • A welcome rise in conversations about how customer data is being used.
  • How mega hospitals are giving way to asset-light solutions like retail clinics.
  • A shift to prioritizing customer experience in healthcare which is still four years behind though.
  • Huge steps that are being taken in the category of expense management.
  • Other themes from this year: diversified revenue, and strong balance sheets.
  • The amazing developments in the field of applied genetics and gene therapy.
  • A mysterious force that is arriving in healthcare which is making current players readjust.

This transcription is provided by artificial intelligence. We believe in technology but understand that even the smartest robots can sometimes get speech recognition wrong.

 Welcome to this week in Health it where we look at as many stories as we can in 23 minutes or less that will impact health it. My name is Bill Russell Healthcare, CIO, coach and creator of this Week in Health. It a set of podcast videos. And collaboration events designed and dedicated to developing the next generation of health leaders.

It's Tuesday Newsday, and this week the JP Morgan conference episode. Wouldn't it be interesting if you got to sit down and listen to 24 to 27 healthcare leaders share their accomplishments, their financials, their strategies for the next year? Well, I just did that, and what I'm gonna do is I'm gonna share with you what I'd learned from my notes from that conference.

This is likely to be a little longer episode. Actually, I'll probably split into the two episodes. That's what's gonna happen. This episode is sponsored by Health Lyrics. I coach healthcare leaders on all things health. IT Coaching was instrumental in my success, and it is the focus of my work at Health Lyrics.

I've coached CEOs of health systems, startups, CIOs, and CTOs. If you want to elevate your game in 2020. Visit health to schedule your free consultation. Okay, here we go. JP Morgan conference. Hopefully you listened to last year's episode, but I'm gonna give you a really quick rundown of what goes on.

So the JP Morgan conference is a whirlwind of activity scattered across all of San Francisco. There's a startup health conference, uh, pharma and life sciences track. There's really a million meetings happening all across the city between investors and startups, between, uh, collaborators and partners.

Every Starbucks, every hotel, lobby, you name it. And there's a lot of sub events that go on as well. You know, I don't participate in all of that, or even a lot of that. I situate myself at the nonprofit track. This is where health systems CEOs and CFOs from 27 health systems stand up and put their best foot forward for really bond holders and investors.

Because you, you have to remember that these health systems have billions of dollars in debt financing. And at some point they're gonna have to go back to those bond markets for, uh, financing their growth. And so what you end up with is a financially minded presentation that also has some strategy in it, but it's an important strategy.

It is not to be taken lightly. The track was on the, uh, 32nd floor of the Western St. Francis, no rain this year, which was great. I'd like to think that I had a little bit of influence on the conference because last year I told you that they had these wooden chairs. They're really tiny wooden chairs and there was no space to really sit between the two people.

So, and I mentioned how uncomfortable they are and I guess someone must have listened to the show because this year they had a really comfortable little wider chairs, a little different configuration in the room, much better configuration in the room. Who knows? Maybe Jamie Diamond. The CEO of JP Morgan listened to last year's podcast.

And shout a note over to somebody saying, Hey, can we get these people some nice chairs? If that happens to be the case, if he happens to be listening to this time. Anytime you wanna come on the show and discuss healthcare and digital health, love to do it. All right, so let's get to the episode. With this episode, we're gonna do three things.

I'm gonna briefly remind you of what we talked about last year. What were the. Key themes from last year. That way you can sort of measure the progress that was made. Then I'm gonna give you the main themes from the presentations this year. That will probably be this episode, and then the next episode that I will do will be highlights from the individual presentations.

Okay, so I've comment, I, I took a couple of highlights out of each one of the presentations that I wanna share with you. That I believe that we can replicate across the industry that are of interest. And if you know anybody at these health systems, you can reach out and ask them about some of the strategies that were there.

So here it is. Here are the 27 Percenters for this year, 27 presenters, Intermountain, Bosco Mercy, Baylor Scott and White Common Spirit, mass General Brigham, which is new. It's it's formerly Partners Healthcare Advocate, Aurora Chop, children's Hospital of Philadelphia, Northwestern Medicine. Henry Ford Health System, NYU Langone.

And uh, if you're thinking, boy, that's a lot of health systems. That's all the health systems that present before lunch on the first day. Okay, so then we have lunch Jamie Diamond presents on the economy in a session that I thoroughly enjoy every year, having my degree in economics. I just love listening to him talk about not only the, uh, US economy, but the world economy, different market economies.

It is just, uh, the trade deals, you name it. Very fascinating. After that, we move to the afternoon sessions, kicks off with Geisinger, then it goes to Seattle Children's, Jefferson Health, city of Hope, new presenter, hospital four special surgery. We've had them on the show, ProMedica Health, and then the day closes out with SSM Health out of St.

Louis. So that's the first day. Then, uh, we get to the second day and you have Ascension, kicks it off, and you have Christiana Care, Providence St. Joseph Health, which is no longer Providence St. Joseph Health. They're now Providence. They shorten the name OSF Healthcare, Mayo Clinic, cottage Health. North Shore University Health, Oregon Health Science University, and Seattle Cancer Care Alliance.

Oh, and uc Health as well. So there's the 27, there was 27. I sat through 23 of them. I did have some meetings that I had to attend. So 23, I sat through a majority of 'em, which I think gave me enough time to really get the gist and the themes for this year's conference. So. Each of the presentations is 30 minutes, so they're given 30 minutes to present and it usually, usually, no, it's always 30 minutes.

It never goes over 30 minutes. If your CEO or CFO is still talking at 30 minute mark, they will politely finish the presentation for you. Now the good news is I saw 23 of them. None of them were yanked off the stage with the hook, so everybody understands that it's really important to finish on time.

Last year I gave a framework, and the framework was, I thought there was four types of presentations, right? There was the merger presentation, which I think is obvious. You know, these are the presentations where people are talking about, we brought two organizations together. Here's how we're gonna gain the operational efficiencies from it.

Here's how we're gonna integrate the culture. Here's how we're. Kind of thing. So the merger presentation, the traditional player, and this is the player that hasn't really done a big merger, isn't really looking at changing the game. They're just looking to expand the market with a new set of strategies and let's just call them the traditional player.

Then there's the specialty provider and I put, uh, the branded players in there. I put the Mayos and the Clevelands and the children's hospitals and the cancer centers, like an MD Anderson would be in there. I mean, they didn't present, but it would be an MD Anderson or, uh, a City of Hope for that matter, would be a specialty player.

And then there's the innovator. So there was four. Categories they gave you last year merger, traditional player, specialty player, and the innovator. The innovator is somebody who has one foot in the present but really is leaning more towards the future. They are very heavily weighted in terms of their presentation and their thinking and their investments in the future, and they, what they see is that health system revenue models.

Specifically fee for service and hospital revenue models are under attack and they need to find new revenue models, and so they are leaning pretty heavily on the innovation side. You know, that framework was pretty good. It held true for the most part. This year I might split the specialty player it really to two camps.

And the camps are a global player, and that's probably a little too grandiose. Probably the best way of saying this is the healthcare player that doesn't see geography as a boundary to their growth, right? So it's people that are planting hospitals in other countries, it's people that are. Using telehealth to reach areas that they haven't before and really expanding their services through non-traditional means, through digital means in other ways.

So let's call that the global player just for grins. And uh, the last one I'll call the research player. And these are the people I. And that's probably not a good term either. I gotta think this through. Research player is somebody who is doing research and coming up with new treatments and really differentiating themselves based on care that can only be provided at their location, right?

So they're coming up with new gene therapies and, and those kind of things. So treatments and research matter and it's creating this, the specialty players really are breaking into those, those two kinds of camps. If I really thought about it. All right, so I'm gonna give you a brief rundown of the themes from the 2019 conference.

Hopefully you listened to it last year or listened to it again this year before the conference, to remind yourself of what we were talking about last year. So here's a brief rundown of the themes. Number one, if you , I said, if you didn't make money in 2018, you have a serious problem. Okay? So 2018 was a really good financial year.

A lot of people posted really good financials. Very few of the presentations did not make money. In fact, I can only think of. Two or three that didn't make money of the 24 to 27 last year. Second theme, mergers were a thing. Uh, a lot of merger presentations, merger conversations, completing mergers, common spirit had just completed at that time.

And there's a lot of talk about implementation and how implementation had to go well. Obviously, and as I told you last year, the financials will tell the story this year. Well, they did tell a story and I'll, I'll tell you, some of 'em are good stories. Some of 'em are, I don't know, opaque stories. , let's just say it that way.

Number three, virtual care is a thing. So we saw a lot of virtual care movement last year and uh, continues to see movement this year as well. Self disrupt from position of strength. So a lot of health systems wanted. That under the old model, the fee-for-service model, and even under some of these value-based care models, they were making money, but that they were looking at new models and new revenue streams as well.

So self disruption from a position of strength was a theme. Trust was a theme. This was an interesting one because it wasn't that the word trust was used, but they talked an awful lot about the community and really holding on to, or, and worried about losing the trust of the people they serve. There's a raging healthcare debate that was going on about affordability, accessibility, diversity, uh, just a whole bunch of things were going on and they were worried that they were gonna get dragged in and really thrown under the bus.

So there was a lot of conversations around how they were positioning themselves, the conversations they were having in the community, and the things they were trying to do. So trust. Uh, the number six was simplify, integrate, consolidate, automate, and efficiency and cost reduction strategies were everywhere in 2019.

Number seven, social determinants are increasingly a part of the scope of the health systems. We heard a lot about social determinants last year. And then number eight, partnerships are the new norms. So there's a lot of interesting partnerships across the board, and that continues somewhat. Okay, so those were the themes for last year.

Let's talk about which themes carried forward and which themes went away. So all the themes carried forward really, except for one. And, uh, I'll hit on that one in a minute. But remember, these aren't 12 month strategies These people are talking about. They employ tens of thousands of people. They have billions of dollars in assets.

They're serving millions of people in their communities, and they don't move over 12 month cycles. They move over 36 month cycles, 18 to 36 month cycles. If they're nimble, they move that quickly. So we're seeing a continuation of a lot of these themes, and then we layer on some additional themes that we're looking at for 2020.

So let's talk about some of these. So not much change in 2019. If you didn't make money in 2018 N 19, now you really have problems. These were two good years for healthcare. Some didn't. And while almost all the systems shared their financials, two of them did not. And, uh, I'm gonna assume that they didn't make money 'cause they left me no choice.

But to make an assumption more on that later, actually, virtual care, self disruption, efficiency, social determinants, partnerships are still front and center. The Civica partnership, which is the joint venture on generic drugs, is going well and it's reducing costs. So these partnerships are going well.

Trust is still a major concern, if not more of a concern during an election year. So. You know, you hear things like the number one cause for personal bankruptcies is healthcare health system leaders are worried about this and they are trying to position the debate, trying to be a part of the debate that is going to go on.

Which one fell by the wayside? Mergers. Mergers fell by the wayside. Not that they're not implementing mergers, but we didn't hear much about new ones. Don't talk about new ones. No. Talk about something on the horizon. That's not to say that scale isn't critical. Scale is critical to success. That was reinforced.

Perhaps it's just a digestion period, right? We've consumed so many mergers that it's just time to operationalize all the mergers that have occurred. So anyway, this conference didn't have anything in, in the way of, for the most part. So let's take a look at some of the. That came about during this conference.

Alright, so we're at the 15 minute mark. I'm gonna try to do this in eight minutes or less. Here we go. Risk covered lives getting paid to keep people healthy. Whoever accepts risk for the population is incent. To address the health of the community. All others are just offering services to the risk-bearing organization healthcare systems are in a weird place and you know, they're viewed as the trusted source for health in the community that they serve, but they aren't compensated for that work in many cases, you know, social determinants work is really done outta kindness or outta the mission of the organization.

But unless they are risk-bearing organizations, they aren't compensated for and they can only take it so far. Before they run outta money. So to address this, there's all sorts of strategies for increasing the number of covered lives, taking on new risk. This has been true for some time, but it was really prevalent in this year's conversations.

So first theme, risk covered lives getting paid to keep people healthy. I. Second theme technology was elevated, but the EHR took a backseat. Okay, so what am I talking about? The last three years, it was an indirect marketing event for the EHR providers. It really was. It was almost odd to be honest with you.

If I asked Jamie Diamond to stand up and to talk about. You know, JP Morgan's strategy and their financials and, and where they're gonna go to a bunch of people that were going to invest in them. He wouldn't stand up there and start talking about his back office system in a strategy presentation. It just wouldn't do it because it, we wouldn't inspire, it wouldn't really tell people what they were going to do.

And yet we as a health systems got up there and did it over and over again. If, on the other hand, you know, Jamie got up and started talking about. Here are the investments we made in technology, and here's what we've done with them to improve our outreach, our services, our uh, availability. You know, here are the things we did and here's, we're gonna make additional investments to do these kinds of things.

You know, that's what you would expect in this kind of presentation. Well, the good news is that's what happened this year. Healthcare finally started talking about what they're doing. With the data, what they're doing with consumer facing digital strategies, what they're doing in precision medicine. This is a good, good movement.

And it was, uh, an interesting theme. So technology was elevated, but EHR took a backseat, so technology was elevated far. You're gonna hear this in a lot of different areas. But anyway, I'll get to him in a second. We'll get back to our show in just a minute. As you know, health Catalyst is a new sponsor for our show and a company I'm really excited to talk about in the digital age.

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Is being effectively captured and used. That's 8%. One of the things I like about Health Catalyst is that they are committed to making healthcare more effective through freely sharing what they have learned over the years. They published a free ebook on how to accelerate the use of data in the delivery of healthcare and precision medicine.

You can get that ebook by visiting this week, catalyst. And this is a great opportunity to learn how a data platform brings healthcare organizations the benefits of a more flexible computing infrastructure in the cloud. I wanna give a special thanks to Health Catalyst for investing in our show, and more specifically for investing in developing the next generation of health leaders.

Now back to our show. Third theme, asset light growth strategies. I heard asset light probably about five or six times, and it's not a common term in this setting. So hearing it five or six times led me to believe that health systems are thinking this way, even if they didn't use these terms. Telehealth, digital patient, medical, home retail clinics and small hospitals.

Also, employer partnerships are just some of the examples of people employing asset light strategies. You know, the mega hospital is being dismantled brick by brick. It's not to say that they're gonna go away. But new big hospitals are only appropriate in certain use cases, in certain strategic situations.

You know, we saw one health system talk about hospital for special surgery is going to increase their footprint in New York City. You know, in a location like that. Given their specialty. It makes sense. It absolutely strategically makes sense. But you have Baylor Scott and White going into Austin, making a play into Austin, which I'm gonna share in the next podcast, which is fascinating and really should be replicated an awful lot.

And then you didn't stand up a massive hospital. They stood up a lot of different care venues and we're able to really take that market. By storm with an asset like growth strategy. So again, very fascinating. Good approach. I think it's a good approach. So five or six minutes, let's see, five minutes actually experience.

The consumer is being heard in two directions, the internal and the external consumer. So health systems are paying more attention to their consumers. They're paying attention, more attention to their clinicians, and they're paying more attention to their patients. There's really one approach to the clinician experience that I'm gonna share.

Probably in in the next podcast that I really think is gonna move the needle. It's actually really exciting. If you took all these presentations at Face Value, the consumer was a big winner this past year from an A focus standpoint, from an investment standpoint, from an emphasis standpoint. However, here's the caveat I will give that compared to healthcare, last year we made huge strides compared to the digital experience in other industries.

We still lag four years. Five years-ish in that space. So experience is a focus. It is a theme, and we need to continue to push the boundaries on that. Expense management, cost reduction, strategic placement of assets, targeted improvements in AR and supply chain. I put all this under the category of expense management, right?

So there's still significant cost reduction strategies going on, significant work in the operational side. And I'm not talking like. We're gonna a million here and a million there. I'm talking hundreds of millions and billions of dollars over multiple years. And uh, it could be because this was the JP Morgan conference, you're presenting to bondholders and you wanna show fiscal responsibility, but it was really prevalent.

I mean, this was a lot of health systems. Are really doing a lot of good work in this area. And you know what it showed it absolutely displayed in the operating income of a lot of these systems. So that was a theme. I think it's gonna continue to be a theme and it's important on this show this week in Health IT to recognize it as a theme because it will continue to be a focus for health it.

And by the way, I still think there's tens of millions, hundreds of millions. Billions to be taken out of health IT and still provide a higher level of service than we're providing today. So just something to think about. Health systems are talking about it. We need to be participating in that conversation.

Number six, diversify revenue. It's one of the key strategies is to monetize all the assets, especially research. So diversifying revenue isn't new. Diversifying revenue was interesting to me in that it was almost every health system is talking about diversifying revenue. So this is a, uh, theme, clearly a theme.

Number seven, really strong balance sheets. It was a good year in the markets. Really good balance sheets. People with a good portfolio management strategy really benefited well from the strong markets over the past two years really. Eight years, whatever it's markets been doing well for a while. So strong balance sheets.

Uh, number eight, applied genetics and gene therapy. So great stories, great movement in this space. Personalized medicine, applied genetics, exciting stories, great time to be alive. You know, it really focused in on health. So health systems have great, really heartwarming stories around people that didn't have hope, and they were able to, through some of the things that we are doing today in this space, provide them really targeted therapies to their specific condition, which gave them hope and gave them really, and a bunch of cases, a completely normal life.

So very, very exciting movement in that space. And then the last thing is we know that they are coming, whoever they are, there's this he who must not be named in healthcare kind of thing going the Voldemort of healthcare. It's not mentioned by name, but it's influencing strategy, actions, investments. You know, there's new entrants making their way into healthcare markets and health systems are starting to take notice and in some cases they're doing defensive strategies, which is taking them.

Uh, you know, some digital, uh, investments and new venues for care. They're hiring salespeople to talk to employers directly, not necessarily waiting for the broker to knock on their door. So a lot of interesting things. We know they're coming, whoever they are, and it depends on market, who they are, but it is recognized and known that they are coming and we have to change.

So that was a common theme. These were the themes. Those were the basic themes for. And in the next episode I'm gonna go into the individual presentation. So you'll hear about Intermountain, sco, Baylor Scott and White Common Spirit, mass General Advocate, Aurora Chop, Northwestern Medicine, Henry Ford. You get the picture.

I have individual notes from all of these. Phenomenal presentation from Ascension. Can't wait to share a bunch of that with you. Got to see the video of their Google Health. Partnership, their Ascension health record presentation. Uh, have some notes on that for you and a couple disappointing presentations.

I'll let you know what those are, running the risk of offending people here, but I was a little disappointed in a couple of presentations. I'll share that with you and, uh, hopefully in a, uh, constructive way, in a productive way. So that's all for this week. Special thanks to our channel sponsors, VMware Galin Healthcare.

And Starbridge advisors for choosing to invest in developing the next generation of health leaders. This show is a production of this week in Health It. For more great content, you can check out our website this week,, or the YouTube channel as well. If you wanna support our show, best way to do it is to share it with peer, shoot 'em an email, tell 'em, Hey, I'm really enjoying this show and best way you can support the show.

We're gonna be back every Friday for another great interview with an industry influencer. And don't forget, every Tuesday we take a look at the news that's gonna impact health it top 10 stories, my take on it 23 minutes or less. Thanks for listening. That's all for now.


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