Thousands of professionals from the provider, insurance and digital health sectors have arrived in San Francisco for the 2024 J.P. Morgan Healthcare Conference. The 42nd annual conference brings together executives and investors from more than 400 health systems and companies to discuss the industry’s most pressing issues.
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The healthcare industry is ablaze with excitement over the potential for artificial intelligence, and Mayo Clinic is working to position itself as a leader.
The nonprofit health system is growing its AI-enabled Mayo Clinic Platform by partnering with providers, payers and other health companies to research and develop new tools. Dr. Matthew Callstrom, chair of radiology at Mayo Clinic in Rochester, Minnesota, said the industry is at a “critical juncture” with AI, and the goal of the platform is to discover and deliver these tools faster and apply them more broadly.
Last summer, Mayo Clinic and Google Cloud announced a partnership to develop a generative AI-enabled enterprise search capability for providers to access critical medical information. Also in 2023, Mayo invested in clinical documentation company Abridge’s $30 million Series B funding round.
Patient data is at the core of Mayo Clinic’s platform, and more than 150 teams are working with that data to develop tools and other applications, Callstrom said.
Mayo Clinic is already implementing cutting-edge AI capabilities to improve care across service lines, he said. One AI model analyzes CT scans to detect pancreatic cancer earlier. Another uses an algorithm based on electrocardiograms to predict atrial fibrillation months in advance of an official diagnosis.
“If we can unleash the creative juices of our staff, they will go and find great solutions and surprise you with what they develop,” Callstrom said. “There’s incredible pent-up demand, and people know where the problems are, so if you can find ways to solve that for them, it’s a huge win.”
—Caroline Hudson
Corewell Health has reached the $200 million cost-cutting goal set following the 2022 merger of Spectrum Health and Beaumont Health that created Corewell, said Matthew Cox, chief financial officer of the rebranded nonprofit health system.
In November, Corewell reported operating revenue of $11.7 billion through the nine months ended Sept. 30.
Grand Rapids, Michigan-based Corewell hit the savings target, in part, because the system formed an integration management office that tracked each change post-merger and held each department accountable, Cox said.
“We found a lot of those savings in things like supply chain, revenue cycle and smaller [areas] like marketing, where we know that by doing things in a standardized, coordinated way, we can save,” he said.
—Alex Kacik
Novant Health is looking for partners as it expands across the coastal Carolinas, CEO Carl Armato said Monday at the J.P. Morgan Healthcare Conference.
South Carolina is a core growth area for the Winston-Salem, North Carolina-based system, Armato said. Last summer, nonprofit Novant announced its investment into Conway Medical Center in Conway, South Carolina, part of a larger strategy to enter fast-growing coastal markets. In November, it agreed to buy three South Carolina hospitals from Tenet Healthcare in a $2.4 billion deal expected to close this spring.
South Carolina's recent decision to end certificate of need laws that control where health systems can add services will help accelerate growth, Armato said.
But partnerships don’t have to be mergers or acquisitions. Novant has a joint venture with GoHealth Urgent Care to operate dozens of urgent care centers, and last year partnered with New Orleans-based Ochsner Health to build 65 Plus senior clinics in the Southeast. The system is also set to open an outpatient-focused hospital this year in Scotts Hill, North Carolina.
“I’m confident that a health system can’t do it alone,” Armato said. "We want to come together, not only to partner but to stop talking about sustainability. We want to thrive."
—Caroline Hudson
Despite workforce issues, the growing demand for healthcare services has boosted financial results at Cleveland Clinic, executives said Monday.
Inpatient and outpatient admissions grew about 6% from 2022 to 2023, said Dennis Laraway, the system’s chief financial officer, noting that demand for patient services has “never been stronger.” That demand is behind projected Cleveland Clinic 2023 operating revenue of $14.4 billion.
But as salary and benefit costs keep pace with revenue increases, health systems will have to adapt by cutting costs and improving efficiency, Laraway said.
“Given that government-insured populations of Medicare and Medicaid are 50% to 60% of our operations, we are not going to solve this [dynamic] on volume and price alone,” he said. “We have to be cost-focused. Sustainability initiatives are a polite word for, ‘We need to get cost out of the system.’ ”
—Alex Kacik
Innovaccer, a healthcare data company, unveiled a generative artificial intelligence clinical documentation assistant Monday ahead of the company's presentation at the J.P. Morgan Healthcare Conference this week.
Dubbed Sara Scribe, the technology will transcribe, analyze and summarize conversations between healthcare providers and patients in ambulatory care settings.
In addition to preparing clinical notes, the company said in a news release the product will provide clinical insights into quality and coding gaps, as well as potential diagnoses for clinicians to consider. San Francisco-based Innovaccer said the software, which will rely on general large language models, will be marketed to enterprise customers, independent practitioners and small group providers via a web-based tool with a mobile companion app.
Commercial interest in AI-powered clinical documentation software has stayed strong. Companies such as Microsoft subsidiary Nuance and e-commerce and technology giant Amazon are developing AI-enabled clinical documentation software.
The company is scheduled to present at the conference Wednesday.
—Brock E.W. Turner
Sutter Health is ready to grow, and ambulatory care will be a major part of the nonprofit system’s expansion plan, President and CEO Warner Thomas said Monday at the J.P. Morgan Healthcare Conference.
Sacramento, California-based Sutter is on track to open 25 ambulatory care centers in the next three years, a roughly $800 million investment into primary and multispecialty services. It acquired outpatient care provider Sansum Clinic in October. Over the next decade, Sutter plans to double its ambulatory investments from 16% to 32% of capital spending, said Cynthia Lee, chief strategy and growth officer.
The East Bay, Silicon Valley and San Francisco areas in Northern California offer the most growth potential, Lee said. Sutter will open an innovation center in San Francisco later this month.
Thomas said the system is open to in-market and out-of-market partnerships. He also sees growth opportunities in cancer, neuroscience and pediatric services.
—Caroline Hudson
Walgreens CEO Tim Wentworth made his debut for the company Monday at the 42nd annual J.P. Morgan Healthcare Conference and made it clear he won’t shy away from making changes.
He said he was only four days into the job when the company’s board questioned him on when to cut the dividend and by how much. Last week, the company announced it would cut the dividend by nearly half to 25 cents per share.
And it was just weeks into his tenure that the company said it would cut the corporate workforce by 5%, part of a larger plan to achieve $1 billion in savings.
Wentworth told attendees he is quickly rounding out an executive team that has seen multiple departures and is moving forward on business opportunities.
Before a board meeting later this month, all but one of the members of the U.S.-based executive team should be in place in Chicago, Wentworth said. “We are losing no steps with the several departures we’ve had,” he said.
Wentworth said Walgreens is all-in on switching to risk-based payer contracts and sees opportunities where pharmacists can encourage patients to seek preventative care under those contracts.
Walgreens has 25 clinical trials contracts, generally a lower capital investment, and has many more in the pipeline, Wentworth said. He said there are opportunities to take market share from Rite Aid, which filed for bankruptcy protection in October—but it will not include buying stores.
“We are not cash rich right now,” Wentworth said. “We are not in a position where we can do large acquisitions and I believe we’re not in a position where we need to.”
—Caroline Hudson
Mass General Brigham will look to shift more inpatient care to patients’ homes, with the help of partners such as Best Buy.
The academic health system has treated more than 3,000 acute patients in the home since 2020, limiting avoidable hospital stays by roughly 15,000 days, said President and CEO Dr. Anne Klibanski.
“Caring for patients in the home is a huge priority and a growing part of what we do,” Klibanski said. “Years of data has shown that not only patients prefer this, but their outcomes are actually better—and it’s lower cost.”
The Boston-based nonprofit partnered with Best Buy in November, leveraging the retailer’s Current Health technology platform and Lively Mobile Plus personal emergency response system. The partnership has helped Mass General make hospital-at-home technology accessible and understandable to patients, Klibanski said.
“The partnership with Best Buy brings the patient perspective into this in the most important way,” she said. “It’s not the technology advancements that are holding us back; much of the technology is already there. It’s the use and implementation of technology and understanding who is going to be using the technology in the home.”
Klibanski highlighted several other initiatives, including a capacity management program that has freed up about 10,000 academic medical center-based hospital beds a year by shifting lower-acuity patients to community hospitals. In addition, Mass General is using artificial intelligence to improve physician scheduling, opening up about 250,000 scheduling blocks a year, she said. The system has also created a single entry point for all behavioral health patients, reducing long emergency department stays by about 21%, Klibanski said.
—Alex Kacik
Oak Street Health will face a 2% headwind this year because of Medicare Advantage risk-adjustment changes, CVS Health Chief Financial Officer Tom Cowhey said during a presentation at the J.P. Morgan Healthcare Conference Monday.
CVS completed its $10.6 billion purchase of Oak Street in May 2023. The primary care chain’s projected 2% revenue hit is below what competitors UnitedHealth Group’s OptumHealth and Humana’s CenterWell clinics have reported facing because of the risk-adjustment update. Oak Street in August began updating its technology systems to adapt to the coding changes, Cowhey said.
“Our goal is to get down to a 2% headwind for 2024,” Cowhey said. “There’s a lot of work our teams need to get done to get there, but at this point, we feel we are well on track.”
CVS Health will open about 60 new Oak Street Health clinics this year and “looks to accelerate that over time,” Cowhey said.
On the Medicare Advantage insurance side, CVS Health’s Aetna subsidiary anticipates breaking even in 2024, despite facing the risk-adjustment, a $1 billion star ratings loss and higher-than-anticipated utilization challenges. The company’s medical expense ratio for the fourth quarter of 2023 will likely come in higher than its previous guidance of 86% because of Medicare Advantage members’ increased expenses, Cowhey said. CVS will report its fourth-quarter results in February.
Membership growth in Dual Special Needs enrollees and members switching from other plans is expected to offset the falling star ratings, Cowhey said. About three-quarters of the company’s 800,000 new members come from other plans, and a third of the new members are dual-eligibles, he said.
—Nona Tepper
CommonSpirit Health, one of the largest nonprofit health systems, is looking to expand beyond its 140-hospital network.
“We will have a greater emphasis on non-acute assets, on ambulatory care and continuum of care,” CommonSpirit CEO Wright Lassiter told the audience at the 42nd annual J.P. Morgan Healthcare Conference. “We will continue to expand outside of the acute environment and continue to think about revenue diversification and what is best way for CommonSpirit to diversify around our traditional set of business.”
The Chicago-based system will predominantly look to grow its outpatient network, said Dan Morissette, CommonSpirit chief financial officer. It will emphasize its core markets, including Colorado, Arizona, Utah and Washington, he said.
“We do recognize not all markets are same,” Morissette said. “In some cases, we can have a more narrow approach to the market, and in other cases we need a more broad approach to the market depending on the facts and circumstances there.”
It acquired five Utah hospitals in May from Dallas-based Steward Health Care. Read more.
—Alex Kacik
Amazon launched a program on Monday at the J.P. Morgan Healthcare Conference that aims to help consumers navigate their digital health benefits.
The company said it will partner with digital health companies to make it easier for customers to check benefit coverage eligibility, apply for their disease-specific programs and manage chronic conditions.
Amazon named Omada Health, a chronic care management digital health company, as the program’s launch partner. The partnership is aimed toward Omada’s employer and health plan customers, which encompass 20 million people.
Omada runs digital health programs focused on diabetes, diabetes prevention and hypertension. Amazon visitors will be able to initiate a coverage check for any of those programs. If the check indicates the customer may be eligible, they will then be guided to Omada’s website to complete the enrollment process.
Omada, which reached unicorn status with a $192 million Series E funding round in February 2022, forged a similar partnership with Intermountain Health last year.
Amazon said it has plans to expand partnerships with other digital health companies. The company will allow users to create a benefits profile and opt-in to be notified of possible future coverage.
—Brock E.W. Turner
An estimated 10,000 attendees are beginning to crowd the conference rooms at the Westin St. Francis and Marriott Marquis hotels Monday, waiting for the who’s who of healthcare to discuss the industry’s future at the J.P. Morgan Healthcare Conference.
Presentations today include “Artificial Intelligence in Healthcare: The Opportunity Ahead” and a keynote speech by JPMorgan Chase Chair and CEO Jamie Dimon. Executives from healthcare behemoth CVS Health, 10 nonprofit health systems, including Sacramento, California-based Sutter Health, digital health company Privia Health and more will also hold separate events.
Follow Modern Healthcare for breaking news on deals, strategic updates, executive changes and other announcements during the first day of the four-day conference.
—Nona Tepper
The J.P. Morgan Healthcare Conference in San Francisco's Financial District kicks off Monday, featuring investors and representatives from more than 400 companies.
Major healthcare companies including CommonSpirit Health, Mayo Clinic, Mass General Brigham, Pfizer and McKesson are slated to participate. Insurance giants Centene and Cigna take the stage Tuesday.
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