Reflections on JPM 2019

January 22, 2019

OAK HC/FT

Another J.P. Morgan conference in the books!  While the coffee was outrageously pricey and the specter of rain showers loomed, it once again was a remarkably successful week, equal parts exhausting and energizing!

Over the course of three days, the Oak HC/FT team held a dizzying number of meetings with entrepreneurs, executives, investors, and other leaders from across the healthcare ecosystem.  Distilling the “takeaways” from these conversations is not a simple task, but here’s a crack at some of the common themes we noticed:

Entrepreneurs are Not Backing Down

Stating that “healthcare is broken” is as groundbreaking as saying that “The Godfather is a good movie” or “Hawaii is a nice place to visit.”  JPM is a reminder of the physical, financial, and emotional challenges that are experienced by Americans every day as they battle the healthcare system.  At the same time, the conference leaves us feeling uplifted thanks the entrepreneurs we meet who are dedicated to finding solutions.  Not every new business model out there is flawless, but every company we met with shares the common aim of trying to fix a broken system.  

There are Many Ways to Skin a Cat

The diversity in approaches to solving problems in healthcare remains fascinating.  Extremely valuable and important companies can be built by eliminating inefficiency and ineffectiveness, whether by streamlining drug development, connecting disparate IT systems, or making it easier for consumers to access care.  At Oak HC/FT, for example, we’ve partnered with several novel businesses driving improvements in care and quality across the behavioral health market (including Axial, Quartet, Therapy Brands, and US HealthVest) and will continue to back innovators across healthcare niches.

Meanwhile, other novel companies are rethinking entire ecosystems altogether, blowing up antiquated business models and rebuilding from the ground up.  We might be a bit biased, but one of our favorite examples is WithMe, which was introduced earlier this month and is taking a drastically new approach to managing pharmacy benefits.

Innovative Management of Specific Patient Populations Continues to Drive Value

We remain excited about companies that find ways to provide better care across costly disease states (such as chronic kidney disease) and complex to manage populations (such as Medicaid).  At JPM, we met with several such businesses who have tapped into pioneering service models for improving outcomes and who leverage technology to make it easier to deliver care.  These companies are at the forefront of what healthcare delivery will look like in the future.  

The Splash from “Big Tech” Hasn’t Arrived…Yet

There is no shortage of press about the ways Apple, Amazon, and Google are going to transform healthcare.  Case in point is Tim Cook stating that Apple will make a “significant contribution” to the industry, leading to CNBC’s Jim Cramer's suggestion that the company buy Epic.  And it is not just media hype: large dollars have indeed been invested, both in new product development and sizeable acquisitions.  These tech behemoths are smart to invest in a massive market like healthcare and given their limitless resources, it is quite likely that these companies will have a major impact on how healthcare is delivered and managed in the U.S.

However, it remains early innings for Big Tech’s foray into healthcare and a meaningful impact in this market will require an enterprise mindset, in addition to a consumer focus (where the preponderance of their efforts have historically been).  Of course, as talent and financial resources are deployed towards healthcare, we are optimistic that these businesses will bring further improvements to the healthcare ecosystem and we hope that our portfolio companies can serve as valuable partners along the way.

Stepping out of the holidays and right into JPM is like getting a bucket of water dumped on your head: it seemingly comes out of nowhere, wakes you up, and leaves you with a jolt of energy!  Everyone on the healthcare team at Oak HC/FT has a full plate of new opportunities that we can’t wait to dig into.  We are confident 2019 is going to be a great year for our firm and for continued change and growth in the world of healthcare.  And we look forward to working together with many of you.

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