Attendees in recent years have lobbed hefty criticism at the annual J.P. Morgan Healthcare Conference, which kicks off Jan. 13, for being astronomically expensive to attend and logistically cumbersome.
Each year, several thousand people descend upon San Francisco's Financial District for the annual investor conference, testing the limits of its hotels, restaurants and Ubers. Hotel rooms near the conference routinely go for $1,000 per night—if you're lucky—and adjacent cafés gladly rent tables for $50 or more an hour. Some attendees also pay thousands of dollars in admission fees just to get into the conference. J.P. Morgan declined to share those prices.
"It does give you pause with whether you need to be there, how many people from your company need to be there and whether you need to be there every year," said Dennis Laraway, chief financial officer at Phoenix-based Banner Health.
Some attendees also pay hundreds or thousands of dollars in admission fees just to get into the conference. JP Morgan declined to share those prices. Despite all that, leaders from the country's largest health systems say they still see a return on investment for attending the meet-up, however broke and exhausted they may be afterward.
And some have found ways to cut costs. They do it by paring back the size of the cadre they send, choosing hotels across town and saying "no" to some extracurricular activities.
Not-for-profit Banner, which has 28 hospitals and reported $8.5 billion in revenue in 2018, used to bring up to five executives. This year, Laraway is going solo. He's a veteran of the conference and has presented there both in his current capacity and in his past lives as financial chief for Memorial Hermann and Baylor Scott & White Health.
This year, Laraway's schedule is full of meetings with current and potential investors. "You've got so many people congregated in one area that it's a great venue for us to line up the meetings one right after another and make an efficient use of time for investor-relations activity," he said.
St. Louis-based SSM Health's executives are saving money by staying at a hotel that's a mile and a half from the conference—a roughly $6 Uber ride away—for one-fifth the price of hotels nearby. SSM, which posted a 2.3% operating margin on $5.9 billion in revenue in the nine months ended Sept. 30, 2019, also cut back on some of the related activities.
Mike Malewicz, SSM's vice president of treasury and chief investment officer, said he strives to be a careful steward of the not-for-profit's resources, which is why he works to cut costs at the conference in creative ways. It helps that he used to live in San Francisco.
SSM also starts planning for the conference a year in advance. Kevin Carroll, CEO of the Hotel Council of San Francisco, said that's not uncommon for the J.P. Morgan conference. Someone trying to reserve a room in San Francisco in recent weeks was probably out of luck.
Ontario, Calif.-based Prime Healthcare Services has sent executives to the J.P. Morgan conference in each of the past two years, but is sitting out this year, said Fred Ortega, the 15-hospital for-profit system's senior director of government relations. Ortega said he imagines cost factored into the decision, but couldn't say for sure. "We ultimately made enough contacts last time around to hold us over for this year," he said.
With the expenses and logistics involved, the J.P. Morgan conference gets to be a lot; but Malewicz said the return for SSM's patients is "absolutely" there, because the connections made at the conference help lower the health system's expenses.
"We are a debt-financed organization and we are able to meet with and present to a lot of our investors," he said. "By sharing this information and building relationships, we are able to lower our interest expense, which then allows us to pour more money into other areas of care."
It's not just investors, either. SSM's team meets with peers on best practice issues, bankers, vendors and even tech companies.
In addition to the connections, David Banks, chief strategy officer at AdventHealth, has also found value in simply being an audience member at the conference. The event features almost two days of back-to-back presentations from not-for-profit and for-profit health systems.
Altamonte Springs, Fla.-based AdventHealth employs the same strategies as other systems to cut expenses, but Banks said attending is always worth it. "The cost is very manageable for the return we get out of what we can get accomplished in 72 hours there in the city," he said.