JPM 2024 Day 3: Star ratings drop helps Alignment Health, CEO says

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.

Follow coverage from Modern Healthcare reporters here and catch up on any days you may have missed.

- Day 4

- Day 2

- Day 1

7:15 p.m. - Star ratings drop helps Alignment Health, CEO says

Falling Medicare Advantage star ratings help Alignment Healthcare by leveling the playing field, CEO John Kao said during a presentation at the J.P. Morgan Healthcare Conference Wednesday.

Forty-two percent of Medicare Advantage plans achieved 4 out of 5 stars this plan year, down from 51% in 2023. Some insurers credited a statistical change in the Centers for Medicare and Medicaid Services' calculations with driving their scores down. CMS cut outliers from plan scores for the first time via the Tukey Outer Fence Outlier Deletion Method.

“People are suing CMS, there’s all kinds of stuff going on, but this was not a surprise. Some people didn’t take Tukey seriously, but we did,” Kao said. “CMS gave everybody ample warning for it. We like what they’re doing with stars because it’s normalizing the playing field.”

The company reported Medicare Advantage membership grew by 44% year-over-year to 155,500 as of Jan. 1. Kao credited the strong results to insourcing its member engagement team, inking new marketing partnerships and maintaining benefits.

Large Medicare Advantage insurers tightening claims reviews also benefits Alignment Health, he said. Brand name health systems are at capacity, dropping their contracts with big carriers and partnering with Alignment Health instead, Kao said.

“There’s too much demand for their beds. They’re getting reimbursed 100% of Medicare fee-for-service, and they’re losing money on it and then the big guys are claims editing them,” Kao said.

He said those systems are coming to Alignment Health for help lowering inpatient acute admissions on claims being paid at Medicare fee-for-service rates so beds can be used for commercial members, which reimburse at double that rate.

—Nona Tepper

6:45 p.m. - WellBe Senior Medical readies 5 markets for national expansion

WellBe Senior Medical is expanding to serve 12 markets by the end of this year, Chief Financial Officer Daniel Frascella said Wednesday at the J.P. Morgan Healthcare Conference.

WellBe, which provides at-home care for at-risk seniors, had a presence in Illinois and Georgia as of 2020. In 2023, its footprint expanded to seven markets, including Ohio, Pennsylvania and Utah. The company plans to operate in 12 markets by the end of 2024, Frascella said.

Earlier this week, WellBe announced an unspecified investment from CVS Health Ventures that will support expansion plans.

Frascella said WellBe waits until it can engage with at least 500 patients before entering a market. The company signs on to capitated risk arrangements with private payers to provide care to Medicare Advantage members.

Given the at-home model, entering markets is not capital intensive, CEO Dr. Jeff Kang said. As part of the model, WellBe deploys on-call, paramedic-driven urgent care vehicles to patients' homes when needed, typically within 30 minutes. They carry equipment similar to emergency vehicles but cannot transport patients, he said.

“It’s about immediacy and responsiveness in the home,” Kang said.

Kang said that in the last few decades, the most important thing in healthcare was getting timely access to care, “and the reality is we have not solved that problem.” 

"In fact, we’ve made it more difficult,” Kang said.

—Caroline Hudson

6:10 p.m. - Duly Health & Care eyes Midwest expansion

Private equity-backed physician group Duly Health & Care will continue to look for expansion opportunities in the Midwest, CEO Dan Greenleaf said Wednesday at the J.P. Morgan Healthcare Conference.
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Duly, propelled by a $1.45 billion investment from Los Angeles-based private-equity firm Ares Management in 2017, acquired South Bend Clinic in Indiana and Quincy (Illinois) Medical Group in 2021. The $2.8 billion physician-owned medical group, based in west suburban Chicago and formerly known as DuPage Medical, plans to grow its network of 190 locations and roughly 1,000 physicians, Greenleaf said.

“There are massive opportunities to continue to expand, whether that be in value-based care, providing add-on services for patients, de novo expansion, ongoing growth of our clinical team and M&A, when it’s appropriate,” he said. “We like the Midwest, it has been a good place for us to do business and we think our expansion opportunities would be in that geography.”

—Alex Kacik

4:35 p.m. - GoodRx not prioritizing growth via M&A

GoodRx plans to focus its growth efforts on retail partnerships, bringing its cash discount cards to commercial plans and offering more brand name drugs, interim CEO Scott Wagner said Wednesday at the J.P. Morgan Healthcare Conference.

Wagner, who took over in April after the company’s co-founders Trevor Bezdek and Doug Hirsch stepped down, said recruiting brand name drugs offers real promise.

“It’s actually the thing that, coming in, I was most excited about,” Wagner said. “You really could take probably about 125 brands [that would say] 'this is a no-brainer.’ ”

Karsten Voermann, GoodRx’s chief financial officer, said the company has largely deprioritized mergers and acquisitions as part of its growth strategy. He said the company has seen its margins increase over time.

He also told attendees he was confident the company would not be threatened by other competition in the space.

“If you don’t have a full formulary, like [Mark] Cuban (referring to his Cost Plus Drugs company), it kind of isn’t that competitive,” Voermann said. “If you don’t have availability, like Amazon, it kind of isn’t that effective. Frankly, if you don’t have the right price points, that doesn’t work either.” 

—Brock E.W. Turner

3:55 p.m. - Oscar Health boasts 31% marketplace growth

Oscar Health expects the number of people signed up for its marketplace plans to grow by nearly a third compared with last year, CEO Mark Bertolini said during a presentation at the J.P. Morgan Healthcare Conference Wednesday.

The company anticipates increasing its membership by 31%, to 1.3 million, when open enrollment ends Jan. 16, he said. Most of Oscar Health’s growth has come from new members in existing markets, although “retention in enrollment for this year is going to be as high as it’s ever been,” Bertolini said. The company laid out plans last summer to expand its geographic reach and launch new products this year to combat shrinking membership, partially driven by exchange products. Read more. 

—Nona Tepper

3:20 p.m. - Veradigm’s new executive team looks to pick up the pieces

A month after data analytics company Veradigm underwent an executive shakeup, its new leadership team is ready to move forward.

In December, Veradigm’s board of directors asked for and received the resignations of CEO Richard Poulton and Chief Financial Officer Leah Jones after the company failed to file its 2022 annual report and its financials in 2023. Interim CEO Shih-Yin Ho, who served as a director of Veradigm, and interim CFO Lee Westerfield have taken over until permanent replacements are named for both positions.

In September, Nasdaq threatened to delist Veradigm over its lack of financial reporting and disclosure. At the J.P. Morgan Healthcare Conference Wednesday, Westerfield said the company was working to get into compliance with Nasdaq’s listing rules.

Veradigm also released its financials for the first time in a year at JPM. The company estimated 2023 income to be between $49 million and $58 million, or between 39 cents and 46 cents per share. It estimated 2023 revenue at between $608 million and $622 million.

“Our financials rest on a foundation that is fundamentally solid,” Westerfield said. "That foundation is evident in three factors: a stable revenue base ... consistent profitability ... and net cash on our balance sheet."

Westerfield said the company's lack of financial reporting in 2023 overshadowed Veradigm's healthy business.

In February 2023, the company changed its name from Allscripts to Veradigm. The change came after the sale of its hospital electronic health record business in May 2022 for $670 million to focus solely on its payer and life sciences data analytics business.

—Gabriel Perna

1:10 p.m. - 5 CEOs considering acquisitions—and 1 who's not

The first two days of the J.P. Morgan Healthcare Conference in San Francisco brought plenty of declarations from CEOs on stage that they are looking for deals, which could signal a strong year for mergers, acquisitions and partnerships.

Read what some of them had to say.

9 a.m. - GoodRx, Oscar Health and GLP-1s in today’s line-up

Insurers and digital health companies resume presentations on day three of the J.P. Morgan Healthcare Conference in San Francisco. The day will include sessions with digital health companies such as GoodRx and Veradigm, along with insurer Oscar Health, among others.

Wednesday’s keynote address will focus on the rise in popularity of weight-loss medications known as glucagon-like peptide 1 agonists, or GLP-1s.

Tuesday, during one session on the use of artificial intelligence applications in healthcare, an AI researcher was unable to attend, but was replaced with AI. With the consent of the researcher, one of his co-panelists uploaded the researcher’s studies and tweets into GPT-4 about how AI can be used in healthcare. The moderator prompted the bot with questions on the topic, and GPT-4 responded on behalf of the absent panelist with answers that reflected his work.

For those who missed day two of JPM, you can check out our complete coverage here. Highlights include Henry Ford Health’s plans to spend roughly $5 billion on a proposed joint venture along with the overhaul and expansion of its main Detroit campus. And you can also read about Cigna Group’s plans to expand its in-home care offerings and insurance services.

Read more on what's to come at JPM 2024.