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Analysis

Insights from the 38th J.P. Morgan Healthcare Conference

By Jack O'Brien  
   January 15, 2020

Leaders converged on San Francisco this week to discuss the status of the healthcare industry and forward-looking trends.

Hundreds of healthcare executives have spent the past several days at the 38th annual J.P. Morgan Healthcare Conference in San Francisco, presenting new ideas and discussing the current state of the industry. 

The conference has allowed for leaders to swap insights on strategic plans for 2020 and hear from peers about innovations taking place across different industry segments.

Some companies, like Teladoc Health, entered the conference with news to share. For the Purchase, New York–based telemedicine company, that included a plan to buy InTouch Health for $600 million.

Related: Big Merger Deals Are Missing at J.P. Morgan Healthcare Investor Conference. Here's Why.

Mala Murthy, CFO at Teladoc, told HealthLeaders that the company feels strong momentum as it exits 2019 and views the InTouch deal as a boon to the bottom line.

"We're very excited about this deal and as I read all of the analyst comments and what the investors talked to us about after the presentation, there seems to be a lot of positive commentary around the strategic rationale of the deal for Teladoc Health," Murthy said. 

Related: New Teladoc Health CFO: 'What's Not to Love About Being in Virtual Healthcare?'

Murthy said Teladoc leadership has long admired InTouch's role interacting with the provider market, specifically leading the way in the doctor-to-doctor virtual care space. She added that InTouch had been eyeing a way to expand its influence, either through an initial public offering or joining a larger company, such as Teladoc.

"We were able to come to terms with a financial arrangement that I would argue is healthy for our balance sheet and is incentivizing [InTouch] from a company performance standpoint," Murthy said. "About three quarters of the deal purchase price in Teladoc Health stock and the remainder is in cash. That speaks to the confidence [InTouch] has in our combined company performance and in Teladoc's performance."

Murthy said that while most of her time at the conference has been spent discussing the InTouch deal with investors, she has been able to branch out and tour the conference to hear presentations from other healthcare leaders outside of the telemedicine space. 

One highlight, she said, was a sizable interest in presentations surrounding the biotech and pharmaceuticals sectors. 

Related: JPMorgan Chase to Buy InstaMed for $500M

Rick Zall, JD, chair of Proskauer Rose LLP's healthcare group, told HealthLeaders that he came into the conference expecting conversations around how to promote healthcare transformation.

Zall said investor clients are looking for technology companies to promote productive innovations that improve their healthcare offerings.

"There's an acknowledgement that the system is not as efficient and effective as it can be," Zall said. "Everyone needs to be working on the triple aim; both improving access and patient experience outcomes as well as lowering costs."

Zall said he has attended the conference for several years and has seen the focus of the conference gradually shift to addressing value-based care and providing solutions that are beneficial for consumers and organizations. 

"I think there will be some companies and organizations that have received funding and begun to develop ideas that actually are yielding results," Zall said. "I'm looking forward to hearing more from some of the early stage companies and health systems to understand what's working and what's not. I think there's been an appreciation that that's the future in terms of delivering value to purchasers and consumers."

Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.

Photo credit: SINGAPORE - 27 May, 2014: JP Morgan company logo. JPMorgan is an American multinational banking and financial services holding company and the largest bank in the USA. / Editorial credit: TK Kurikawa / Shutterstock.com


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