Day Two Notes for the 40th Annual J.P. Morgan Healthcare Conference, 2022

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The phrase “whole person health” kept echoing through the virtual hallways during the second day of the 40th Annual J.P. Morgan Healthcare Conference. Looking at the whole person – not just separate organs or body systems – may seem obvious and commonsense, but it’s not how our (well planned, highly logical) healthcare system currently is structured.

There are many examples of how segmentation and fragmentation is the rule, rather than the exception.  Just like a department store where you might go shopping in the men’s clothing section and then in the shoe section and then in another department to finally get everything you need, hospitals are organized primarily by organs, body systems, illnesses and modalities, not for patient convenience or for whole health. Similarly, if you have a medical concern and decide to go see a doctor, you have to decide if you should go to a cardiologist, pulmonologist, internist or family practice physician. Unless you’re in a value-based arrangement, it typically is the patient’s responsibility to trek from one doctor to another and to try to meaningfully connect the dots.  Moreover, if there is a mental health aspect to be addressed, there may be a whole different set of health plans, administrators, doctors, therapists, counselors, and other mental health professionals, not to mention reimbursement issues, to contend with.  And yet, it doesn’t really make much sense anymore.  We all know that many chronic diseases implicate multiple symptoms and co-morbidities.  A person with obesity may also have diabetes, current or possible cardiovascular disease, musculoskeletal problems, depression, chronic pain and many other issues. So, what can be done about that?

Cigna Chief Executive Officer David Cordani in his presentation today talked about how the need for whole person health – coordinating physical and mental health wellbeing – is becoming accepted globally and is embodied in Cigna’s strategy to create better clinical and life quality for people, as well as affordability, through its coordinated behavioral, virtual, pharmacological and health plan initiatives.  A good portion of Cordani’s presentation was focused on Cigna’s Evernorth initiative, which includes pharmacy and benefits management (Express Scripts, eviCore), care (MDLive and behavioral health) and intelligence (analytics, predictive models) offerings.  Cordani made the same point we heard yesterday – technology and virtual care present tremendous opportunities to address chronic condition management, mental health and physical health needs.

One Medical, which recently merged with Iora Health, also is integrating mental health into its primary care platform, with its CEO Amir Dan Rubin citing a case study showing a 50% reduction in severe anxiety where primary care drives mental health access to One Medical group visits, virtual behavioral solutions and medication. Yesterday, Oak Street Health talked about its recent addition of behavioral health support and its launch of a comprehensive virtual care network in 2022.

Another interesting example is Vera Whole Health – yes, that really is their whole (health) name. Dan Mendelson, CEO of Morgan Health (a J.P. Morgan company) today described the recent launch in the Columbus, Ohio market of an arrangement between Vera Whole Health and Central Ohio Primary Care (“COPC”) – the largest independent primary care group in the United States – to provide whole health care to the thousands of J.P. Morgan employees in the Columbus market. Vera, which recently received an investment from private equity fund Clayton Dubilier & Rice, and was the first investment by Morgan Health, provides a more holistic view of an employee’s health and higher levels of patient engagement.  It is a primary care team driven model that operates on a full risk, subscription basis for commercial patients, very different from traditional fee-for-service.  A patient’s care is coordinated by his or her primary care physician, and a member has the freedom to see his or her choice of specialists.  Vera will call upon COPC’s existing clinics and will help grow new clinics to service the needs of J.P. Morgan’s employees – approximately half of which are already patients of COPC. This advanced care, global risk model is very common in the Medicare Advantage world (such as with agilon health, ChenMed, Iora/One Medical, or Oak Street), but it has not been rolled out at scale yet for commercial employer groups. By partnering with practices such as COPC, Vera can rely on high quality, well-established physician clinics, while also launching new clinics to provide additional points of access and sites of service for members of their contracted commercial employer groups. (A quick nod to Matthew Goldman of Sheppard Mullin who successfully assisted Vera in this initiative with COPC and J.P. Morgan.)

Technology and The Network Effect

A well-recognized benefit of undertaking a coordinated care approach that is highly aligned with payors and providers is the ability to obtain data, conduct analytics and produce actionable insights.  As we well know, our current healthcare system often results in fragmented care, disconnected data and perverse incentives.  While one methodology to solve this is the owned clinic model, such as with Medicare provider Cano Health or Oak Street, the partnership or network approach also can be effective.  Aledade partners with all types of primary care practices in a network model across diverse payor contracts to create value-based arrangements. Aledade provides connected data through a single tech platform that connects with more than 100 EHR platforms, provides practice improvement through onsite practice coaching and assists physicians in entering the world of value-based and risk contracting.

During his Day 2 presentation, Farzad Mostashari, CEO of Aledade, shared that Aledade has grown from its initial ACOs to now managing approximately $17 billion of medical spend across 37 states. To manage that effectively, Aledade has figured out how to collect data from multiple sources – such as ADT (admission, discharge and transfer) feeds and other sources — and turn them into actionable insights that are timely delivered to physicians, care managers, nurses and staff. [As a side note, for another interesting emerging company working creatively with ADT feeds, check out Audacious Inquiry (aka Ai).]  Mostashari made the insightful comment that data needs to be presented in a way that is meaningful to the recipient – what does this data mean to a doctor, a nurse, a care manager – and what will it allow them to do with it? Aledade also used the J.P. Morgan Conference to announce its acquisition of Iris Healthcare, an advance care planning company that will become part of the new Aledade Care Solutions business unit.

While many providers like Aledade and Cano (along with others that we highlighted yesterday) are very focused on producing effective customer-facing digital access points, health plans are focused on providers as well.  Clover Health trumpeted its Clover Assistant software platform and spent a good portion of its presentation effectively pitching itself as a healthcare software company.  Clover Assist is designed around the primary care provider aimed at giving providers a polished, intuitive system to treat their patients and maximize the tracking and management of the metrics that are driving better outcomes.  At this point, providers using the Clover Assist system (and their members) are tethered to Clover but that is likely to change as Clover looks into licensing its software to other plans and providers.

Continuing the theme of payor and provider alignment, Bright Health Group’s presentation today focused heavily on NeueHealth, Bright’s provider services initiative. NeueHealth, per BHG CEO Mike Mikan, has about 400,000 value-based patients and is expected to reach approximately $2 billion in revenue in 2022, slightly less than a third of the overall company revenue, with one-third of NeueHealth revenue coming from other non-Bright payors. Mikan focused on the opportunity to fully align Bright members when possible with NeueHealth, and indicated that they expect approximately 40% of Bright’s IFP (individual/family plan product) members to be attributed to NeueHealth providers. Per Mikan, NeueHealth can have higher margins than the Bright health plan business, and Bright as a whole is expected to get to EBITDA breakeven in 2024. But you might ask, where’s the whole person health thing– have you forgotten today’s theme?  The answer is – Cigna.  More clearly, Bright just completed a $750 million funding round with investment from existing shareholder New Enterprise Associates and including $550 million from Cigna Ventures. In addition to the capital, Mikan expressed excitement about partnering with Cigna’s Evernorth to bring its behavioral health capabilities to bear for Bright Health and NeueHealth’s members in an aligned and coordinated manner.

Speaking of behavioral health, Lyra Health, a behavioral health provider platform marketed directly to employers, hammered home the message of technologically aligning with your providers to create beneficial network effects. While Lyra also highlighted the simple and effective way its customer-facing app helps do away with the stress of contacting and scheduling visits  – handling everything from highlighting providers that meet criteria sought by the patient (including identifying providers of color to the extent desired by those seeks assistance for race-related trauma), calendaring visits, providing a texting platform and virtual visit platform – the more interesting message was how effective the Lyra platform has been at building a loyal provider base.  Indeed, Lyra is able to tailor provider recommendations to patients based on the preferences of the providers themselves (perhaps a provider is seeking patients with certain treatment needs).  Lyra  also has opened up a vast network of providers to each other, allowing them to consult one another and collaborate in ways they previously would not have been able to.  In the behavioral space in particular, there has been a seismic shift to virtual treatment and the focus on the software backbone has paid off for Lyra.

Finally, there is the big fish, CVS Health.  Are you surprised to hear that CVS’s website is one of the top three healthcare websites visited on the internet?  CVS isn’t. They have 35 million digital customers, a brand that has become highly associated with healthcare and a formidable retail footprint which houses its HealthHUBs and Minute Clinics.  With all this, what’s the plan to grow?  Well, first, focus on the tech of course.  Build out the customer applications to provide an ever more comprehensive health platform for their customers to access.  Next, build, buy or, in some cases, partner with primary care providers to create a national primary care footprint collocated with CVS retail and pharmacy services that are already in place (hmm…this sounds familiar.  I think I heard this story yesterday when VillageMD talked about its partnership with Walgreens!).  Wrap a virtual care platform around all of this and you’ve covered the continuum of care.  Now you’ve got all of the ingredients that you need to produce better outcomes, manage risk and succeed on the health plan side of your business.  As recent years have demonstrated, the national healthcare system MUST find tools to effectively manage population health if the total cost of care is going to be reduced.

Chemical Innovation

According to David Cordani of Cigna, there is a wave of chemical innovation coming over the next five years as pharmacological innovation accelerates.  We saw that in the Monday and Tuesday  presentations from multiple biotechnology companies about mRNA vaccines, new medications in the pipeline, and more specialty drugs.

One interesting area  is biosimilars.  A biosimilar is a biologic that is highly similar to, and has no clinically meaningful differences from, an existing biologic medicine that is already approved by the FDA.  Studies have shown that biosimilar drugs could drive down prices for expensive medicines used to treat illnesses, such as cancer and rheumatoid arthritis.

Although biosimilars are complex and, in turn, require physicians or nurses to administer them, as well as more management and protocols to ensure that they are being used correctly, Cordani noted that biosimilars can be a benefit to society at large if care coordination results in better care and managed cost. He also shared that the U.S. is behind the other OECD countries in biosimilar adoption.  Rather than resist the trend, interestingly, Cigna has decided that biosimilars, per Cordani, are a place to lean in and lead, especially given Cigna’s range of expertise and resources.

We also saw today some interesting and hopeful presentations that may move us from care to cure for some conditions. Sana Biotechnology reported progress on cell therapy trials in non-human primates to express in the body modified hypoimmune (i.e., not visible or attractive to the body’s killer cells) that can address blood cancers (leukemia, lymphoma, myeloma) and diabetes and can persist long-term in the body.  As their CEO Steve Harr shared, they used the paradigm of how a fetus is protected from and not attacked by a mother’s immune system (even though since it carries half of the father’s genetics) to develop a long-term solution to disease.  In their approach, if successful, eligible diseases could be treated with a single application of the therapeutic agent, just like Hepatitis C.  Definitely an interesting initiative to watch. “Better Living through Chemistry” anyone?

Nudges

Let me be the first to say it. Healthcare is going to get pretty darn annoying in the next decade. Why, you might ask?  Because all of those companies that we saw at the J.P. Morgan Conference yesterday and today have an app they want you to use and they want you to be “engaged.”  That’s okay so far, but guess how they’re going to redirect your behaviors into something a bit more healthy? With “nudges!”

We heard multiple times today that they will take in data, apply some AI and generate a “nudge” to the patient.  Sort of like your sibling who kept poking you in the back seat of the car on those long childhood trips – enough already! Thankfully, we’re only at the 1.0 generation on this, as we’re going to have to come up with something better than nudges and pokes to save our healthcare system without all of us going bonkers. Stop nudging already!

On to Day 3!

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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