JPM 2025: Health systems eye $30 billion revenue target

Nonprofit health systems presenting at the J.P. Morgan Healthcare Conference this week said they aim to expand into $30 billion organizations through both organic growth and mergers and acquisitions.

AdventHealth and Novant Health have each set $30 billion annual revenue targets, fueled by a growing demand for care and interest in deal-making. If successful, those health systems would follow other major nonprofit systems, including Chicago-based CommonSpirit Health and Charlotte, North Carolina-based Advocate Health, which eclipsed that revenue threshold after completing major mergers.

Related: JPM 2025, Day 1: Advocate Health wants post-merger savings

Executives from AdventHealth, which is expected to report about $21 billion in 2024 operating revenue, said at a Monday morning presentation that the organization will grow to a $32 billion system by 2030. The Altamonte Springs, Florida-based system plans to hit that target by building out its primary care and outpatient networks across the rapidly growing Florida market, as well as through mergers and acquisitions near its service areas, AdventHealth President and CEO Terry Shaw said.

“We’re making significant investments in very fast-growing markets,” Shaw said at a Monday morning presentation. “We have a maturing consumer connectivity model, and we’re rapidly growing our outpatient systems of care.”

Most health systems featured at the conference are trying to lure potential investors by focusing on their outpatient networks, which executives said tend to produce better margins than inpatient care. Also, more patients are destined for outpatient sites rather than long hospital stays as technology advances, executives said.

Novant Health also set a $30 billion annual revenue goal, although it would be a relatively bigger stretch for the roughly $10 billion system based in Winston-Salem, North Carolina. Novant, which has been growing its South Carolina footprint, looks to continue its expansion across the South through a mix of opportunistic deals and construction, executives said at a Monday morning presentation.

“We can acquire other hospitals, implement our strategy and continue to post strong financial results,” said Alice Pope, Novant chief financial officer.

The $30 billion annual revenue target has been echoed by health system executives over the years, but it isn't clear why that specific number has repeatedly been systems' goal.

For instance, Kaiser Permanente-backed Risant Health said last year the organization strives to generate $30 billion to $35 billion in annual revenue. Former Advocate Aurora Health CEO Jim Skogsbergh said at the 2020 J.P. Morgan Healthcare Conference that the organization aimed for close to $30 billion in annual revenue by 2025.

Many health system executives say that regional and national scale can help their organizations lower costs, boost revenue and improve quality. However, studies have shown that an organization’s size does not guarantee cost savings, and in fact can drag operations.

Still, most provider executives maintain they need scale to keep up with competitors and stave off economic and industry-related financial pressures.