Written by : Dr. Aishwarya Sarthe
January 21, 2025
Key highlights from the 43rd annual JP Morgan Healthcare Conference, with a focus on outpatient care growth, the financial performance of health systems, and digital health advancements.
The event spotlighted outpatient care as a core growth strategy, the financial improvements of large health systems, and the pivotal role of digital health and AI in transforming patient care.
The 43rd annual JP Morgan Healthcare Conference in San Francisco concluded with key insights into the healthcare industry's future.
The event spotlighted outpatient care as a core growth strategy, the financial improvements of large health systems, and the pivotal role of digital health and AI in transforming patient care.
1. Outpatient Care Remains Health Systems' Key Growth Strategy
Health systems continue to prioritize outpatient care as a significant growth strategy.
AdventHealth’s President and CEO, Terry Shaw, said, "We are reinforcing our outpatient strategy and planning to invest $500 million into primary care over the next five years."
Other health systems like Novant Health also leverage outpatient growth to target $30 billion in revenue goals.
Sutter Health is expanding its outpatient footprint by opening around two dozen outpatient centers in the next three years, including a $800 million outpatient hub in Santa Clara, California.
Additionally, Ardent Health's expansion into urgent care centers highlights the industry's focus on expanding outpatient services.
2. Large Health Systems Report Stronger Financials
Many large health systems have reported improved financial results. Baylor Scott & White saw a 25% year-over-year increase in operating income, reaching $1.2 billion for fiscal 2024.
Mayo Clinic reported a 7.1% operating margin in the first nine months of 2024, up from 6% in 2023. Providence, which faced substantial losses in 2022 and 2023, achieved a $310 million gain in 2024 after executing operational improvements.
3. Health Systems Seek Partners for Non-Core Operations
Health systems are increasingly partnering with external organizations to manage non-core services like home care, pharmacies, and labs.
OhioHealth and Providence sold stakes in home health facilities to focus on acute care, while CommonSpirit is building its home healthcare operations. The shift toward partnering allows health systems to cut costs and streamline core activities.
4. M&A and Partnerships Drive Digital Health Growth
Mergers and acquisitions (M&A) in digital health are gaining momentum, with companies like Transcarent, H1, and Health Catalyst making strategic moves. Teladoc Health also partnered with Amazon’s Health Benefits Connector to expand its health programs. Other companies, such as Nvidia, announced partnerships with organizations like Mayo Clinic and Illumina to enhance digital health capabilities.
Teladoc Health’s CEO, Chuck Divita, emphasized the pressure on the company to deliver consistent results, stating, "We are a ‘show me’ story at this point, and I think it’s going to come down to execution—our ability to articulate what we’re doing in terms of our priorities and then show success against that."
5. Digital Health Companies Focus on Performance in 2025
2025 is a crucial year for digital health companies as they aim to recover from the challenges of 2024. Tempus AI, a precision medicine company, dropped its stock after missing analysts' expectations. Similarly, GoodRx and other digital health companies are working to demonstrate financial stability and long-term growth potential.
6. Health Systems Form Clinical-Focused AI Partnerships
Nonprofit health systems are increasingly partnering with tech companies to explore the clinical applications of AI. Mayo Clinic has partnered with Microsoft, Cerebras, and Nvidia to automate imaging assessments and improve diagnostic accuracy. Sutter Health also signed a seven-year deal with GE Healthcare to integrate AI into diagnostics to enhance patient care outcomes.
7. Small Insurers See Growth in Medicare Advantage
Small Medicare Advantage insurers are optimistic about their prospects, with Clover Health and Alignment Health reporting substantial membership growth in 2024. Clover Health saw a 27% increase in membership, and both companies are leveraging Medicare Advantage Star Ratings to attract more customers.
Clover Health is focused on improving its rating to achieve the four-star benchmark, which is crucial for earning significant bonuses.
8. Cybersecurity Gets Limited Focus
Despite the growing threat of cyberattacks in healthcare, cybersecurity was not a major focus at JPM 2025.
Ascension was one of the few health systems that discussed its efforts to enhance data protection. Ascension spent approximately $140 million to recover from a cyberattack in 2024.
However, most discussions centered around growth strategies and patient care rather than digital infrastructure and security.
9. Patient Care Focus Shifts to Consumer Experience
Health systems are placing more emphasis on the consumer experience as patients increasingly demand higher-quality care. Baylor Scott & White’s digital platform, MyBSWHealth, boasts over 3 million accounts and is central to its consumer-driven care strategy. CommonSpirit also highlighted its "differentiated customer experience" as a key part of its approach, while Ardent Health emphasized the importance of creating a consumer-centric healthcare ecosystem.
10. Medtech Advances in Robotic Surgery
The surgical robotics field continues to expand, driven by companies like Intuitive Surgical and Johnson & Johnson. Intuitive Surgical's latest robot, the da Vinci 5, sold 174 units in Q4 of 2024, while Johnson & Johnson's new robotic systems for knee and general surgeries are gaining traction.
Both companies are integrating advanced technologies like augmented reality and machine learning into their robotic platforms to improve surgical precision and patient outcomes.
The JPM 2025 conference highlighted the healthcare sector's ongoing transformation, focusing on outpatient care, digital health advancements, and financial growth strategies. Health systems increasingly prioritize partnerships and non-core business outsourcing while adopting AI technologies to improve patient care. The digital health landscape is changing rapidly as companies seek acquisitions and partnerships to bolster their offerings. These trends signal that the healthcare industry is adapting to meet the evolving needs of both patients and providers.