Show Me the Money

The 35th Annual J.P. Morgan Healthcare Conference is over, and 25,000 executives are flying home after four days of deal making and discussion. We’ll let the roundup-ers do what they do best (check out MedCity News and The National Law Review), and we’ll opt instead to talk about three major takeaways from the event that indicate the state of healthcare in 2017 – and what they mean for healthcare brands.

Converge & Collaborate

On Day One of the Conference, UnitedHealth announced the combination of OptumCare and Surgical Care Affiliates to create a comprehensive ambulatory care service platform, quickly setting the conversation about the future of healthcare delivery. This is a (logical) continuation of UnitedHealth’s acquisition of physician groups and urgent cares and reflects several industry shifts, including the convergence of payer and provider, the shift from inpatient to outpatient, and the consolidation of major cross-industry players.

Health plans aren’t the only ones in full-on diversification mode. At the StartUp Health Festival, which runs alongside the official J.P. Morgan Healthcare Conference, Geisinger revealed its plans for Springboard Health – a new population health initiative focused on the social determinants of health and access to healthy foods. Their first foray will be in Scranton, Penn., and will be implemented in partnership with local stakeholders.

All of which raises the age-old strategic question: build, partner, or buy? The conference was rife with the buying side of the equation, but most organizations are taking a diversified approach to diversification. The onus is on technology and services companies to help bridge gaps, build trust, and drive real collaboration – and the healthcare organizations who win in the long term will be those comfortable with strategic risks.

Repeal & Replace

In the meantime, it’s no surprise that political discourse dominated many a coffee meeting. The timing of President-elect Trump’s first press conference was almost too perfect, taking place on Day Three of the Conference. Mr. Trump’s pledge to repeal and replace within the same day or week has put the pressure on GOP leaders to find an appropriate solution and the Senate Republicans have jumped to action in a 51-48 vote to pass a budget resolution to begin dismantling the law.

Yet while much of the media coverage exudes panic, the sentiment of Conference attendees was more measured. A group of healthcare executives attending a Leavitt Partners & KPMG Investment Discussion were even optimistic, discussing plans to stay the course on the path to value. Repealing Obamacare need not refer to a totality – it’s likely that select pieces, not all, of the legislation will be altered.

As noted in a Becker’s Hospital Review op-ed, “the election is not causing major shifts in [providers’] approach. The direction communicated in every presentation was to keep going forward as the focus on value — high quality affordable care and health for a population — has to continue.” And the Medicare Advantage market is as healthy as ever, with Conference attendees discussing increased provider interest in starting their own health plans, and health plans like Centene indicating significant growth in Medicare Advantage plans over the coming months.

Find & Fund

The investment community continues to be drawn to health technology and services companies, and this week’s funding announcements were heavy on analytics and virtual care companies that extend care and make sense of mounds of data. From Arcadia Healthcare Solutions to Aledade to PeraHealth to SnapMD, investors continue to be intrigued with solutions that make EHR data meaningful and usable.

In discussions with strategic venture firms, there’s also interest in funding companies tackling many of the latest buzzwords – from AI to blockchain. (What is blockchain, you ask? Our favorite definition came from Darius Tahir in Thursday’s POLITICO Morning eHealth: “Blockchain is a type of database in which information is duplicated by multiple data-holders and verified by each when altered. In theory, this method means an audit trail for new data – meaning better security, authentication, and privacy.” More to come on that!)

In fact, during the conference, IBM Watson Health and the FDA announced a new research initiative to define the appropriate exchange of health data using blockchain technology. We expect this year to see increased momentum in this next phase of interoperability.

What’s the Net-Net?

Since its inception in 1983, the J.P. Morgan Healthcare Conference has become the foremost exposé of where money is flowing in healthcare. It provides a crucial reality check in the lead-up to the hype of HIMSS. Brands who want visibility with key investors and business partners must have a presence, but don’t show up if you don’t have anything to show. This is not the place for grandiose visions lacking hard numbers. This is not the place to broadcast industry jargon. This is not the place for a marketing machine without the business engine.

In short: go to HIMSS to see where the market wants to be; but go to J.P. Morgan to learn where the market is. And you know what? It’s in a pretty good place.

January 13, 2017
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