#JPM19 Best Bets

by Gregg A. Masters, MPH

Two bellwether companies reported on their operating results including industry headwinds and tailwinds given the instability of macro industry pivots from a ‘do more to earn more‘ (fee-for-services) production mindset to ‘loose‘ (where any ‘ Rorschach‘ projection will do) notions of what a ‘value based‘ healthcare, tech or systemic approach looks, feels and walks like.

In other words, in this admittedly murky transformational environment, the challenge of positioning a viable consolidated enterprise (for the CVS Health & Aetna combination as well as others pondering the implications of the volume to value journey) the seminal question remains: is the strategy pivot about grafting innovation (via acquisition or internal re-positioning) on top of an otherwise legacy driven culture and operational chassis, or is it a complete re-tooling of the enterprise?

Might focused tweaks work, or is a fundamental re-structuring of the business model and operating footprint the strategic imperative? And if the latter, what does that look like and is there a national replicable footprint?

I found the presentation by Larry Merlo, President & CEO, CVS Health aka the ‘tail that wagged the dog‘ at legacy health insurer Aetna (though Mark Bertolini would no doubt beg to differ with my legacy label – think 90’s U.S. Healthcare debacle and subsequent entry and exits from ambitions efforts at new business development at Healthagen) to be sensible and promising. As a strategist at many misfires (and some managed care successes) at major for-profit, tax exempt, academic and regional referral center hospital or health system pivots I was skeptical that this modestly ‘atypical player‘ marriage made sense and could be pulled off in a sustainable way.

See what you think… reading the tea leaves from diversified (via acquisition or internal baking) and often potentially conflicted ‘legacy‘ vs. ‘new market‘ opportunity plays can be a challenging set of incentives to navigate, manage and scale in a healthcare economy pivoting from volume-to-value.

You can access both via the JP Morgan webcast portal for a limited time here. This is a free service but does require your registration. Search the ‘sessions’ tab for the respective webcast. Some of the reporting companies’ supply their decks for reference as well.

The other report I found of strategic value from a trophy name plate operator in the midst of it’s own pivot, in the lab space was provided via industry leader and consolidator LabCorp courtesy of David King its Chairman & CEO.

Your thoughts and comments are welcome.

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