The 41st annual JP Morgan Health Conference wrapped up in San Francisco on Thursday after a four-day schedule with presentations from dozens of health systems, insurers, pharmaceutical manufacturers and companies. technology company.
The 2023 conference covers topics from cost to public policy to patient care and discussions about a tumultuous continuing period for the healthcare industry.
Here are five key takeaways from the conference.
1. The health system needs to cut costs
In a challenging economic environment, health system executives are prioritizing costs. Labor, which typically accounts for more than half of costs, continues to be a top concern as suppliers navigate wage inflation driven by staffing shortages. Contract labor spending is falling but is expected to rise for months.
CommonSpirit Health detailed a $500 million cost savings plan by 2023, part of a 4-year $2 billion performance improvement plan set up when Catholic Health Initiatives and Dignity Health combined. to found CommonSpirit in 2019. To date, the Chicago-based nonprofit the company has achieved about $1.3 billion in that goal through tactics like supplier consolidation, benchmarking, and more. standardize services and revalue its real estate holdings.
2. Service integration is increasingly prioritized
Integration of services will be key for healthcare organizations this year, executives say. Health systems and insurance companies see this as an opportunity for long-term savings and as a path towards higher quality care.
CEO Rosalind Brewer said Walgreens Boots Alliance is open to additional acquisitions to diversify its offerings. Walgreens’ VillageMD has closed an $8.9 billion deal to acquire Summit Health-CityMD and plans to expand its urgent care and multi-specialty operations. Later this year, Walgreens will buy out CareCentrix, a home care business.
CVS Health CEO Karen Lynch said the company was looking for a primary care asset in the market, though she did not refer to a Bloomberg News report that CVS Health is targeting Oak Street Health based in Chicago, which plans to open 35 new clinics this year.
Insurtech Clover Health is relying on home primary care services to drive growth. CEO Andrew Toy said: “Home care is the strategy that healthcare will be moving towards in the next few years.
3. Medicare Advantage is still very important to insurers
Health insurers present at the conference reported mixed results in their Medicare Advantage business but the lucrative, growing program remains a priority regardless of recent performance.
Centene CEO Sarah London has described the company’s Medicare Advantage growth as “soft” during open enrollment for 2023. The insurer wants to increase profitability by adding more subscriptions. eligible Medicare-Medicaid beneficiaries, and by improving the company’s star rating, this has turned worse than expected last year.
Humana has seen much better results with Medicare Advantage and has added at least 625,000 new members added during the open enrollment period, a 13.6% increase. Cigna has reported its Medicare Advantage membership has increased by single digits.
4. Tense interest rate negotiations will continue
Expect tough conversations this year as providers look to cut costs and insurers try to avoid a significant increase in claims. Economic uncertainty will further complicate this dynamic. So a re-determination of Medicaid eligibility emerges, which is expected to resume shortly after the expiration of the COVID-19 public health emergency declaration and result in millions losers. Centene CFO Drew Asher said the company expects to lose $8 billion in Medicaid revenue as a result of the re-decisions, including $4.5 billion this year, and aims to move subscribers sign Medicaid to other forms of insurance.
5. Competition heats up in the field of medical technology
The healthcare technology industry is becoming more and more competitive as providers turn to virtual platforms and digital tools to improve patient care.
Teladoc Health CEO Jason Gorevic expressed confidence in his telehealth company’s position relative to its competitors, which he says lacks the scale needed to achieve results. strong financial results. “There are a lot of virtual care companies out there that are narrower focused, smaller in size, and are crowding out the advantages of a single company. [software] solution,” said Gorevic.
General Catalyst CEO Hemant Taneja has warned investors of a “tough year ahead” as digital healthcare companies are forced to shift focus from revenue growth to profitability. profit.
Artificial intelligence continues to generate interest. CEO Peter Arduini said GE Healthcare, which spun off General Electric on January 4, wants to grow its AI and connected devices business.
Alex Kacik and Nona Tepper contributed to this story.
