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Newsday: Are Health Systems Falling Behind in the Innovation Race? with Jason Rose

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I'm Bill Russell, creator of this week Health, where our mission is to transform healthcare one connection at a time. Welcome to Newsday, breaking Down the Health it headlines that matter most. Let's jump into the news.

Bill Russell: All right, it's Newsday, and today we are joined by the incomparable Drex to Ford, the wonderful Sarah Richardson. And Jason [00:01:00] Rose.

Jason Rose: why don't I get an adjective? I don't,

Bill Russell: I don't know why I did that. I You're a rose between two thorns. I was trying to, there you go.

Trying to think of what I could do there. What is behind you? Is that indicative of the snow that has covered

Jason Rose: right.

Yeah. We got lots of ice too. I'm in Nashville. Ooh. So this is a a bison. And the bison is one of the only animals on the planet that when there's a massive snowstorm, they're the ones that go into the storm versus run away from it. And so I always like that symbolism. So I, this is something I.

Kind of try to do myself is just go, you know, take the bull by the horns, in this case, bison, I guess by the horns.

Bill Russell: I understand that Nashville was hit pretty hard with this storm.

Jason Rose: Yeah, I had you know, I'm looking outside. I've got my entire pool has got one big icicle right now. It's the, it's it got we got hit hard mostly with ice and sleet, and so the accumulation wasn't.

10 inches like they thought it might be. But the ice is like, I mean, I think it's, I [00:02:00] think it's, it is at least half an inch. It might be an inch. It's a lot of ice. So, which is falling branches and trees and, you know, yeah, it was interesting weekend,

Bill Russell: man.

Sarah Richardon: He's still have power though.

Jason Rose: I never lost power, but I did.

I did definitely have friends who lost power for a few hours. But I think everyone's back online, so thankfully.

Bill Russell: Drex. I still see the glow from the Seattle victory yesterday to, yeah. Congrats. See it in your face.

Drex DeFord: Good times.

Bill Russell: Good times. Good time. I love this subdued because Sarah's on the line and absolutely crushed the 49 ERs.

Last week. So, he's playing at low key, but when she's not around, he is like over the way crazy.

Sarah Richardon: I can actually, like, the Seahawks just, we're not, at least you are in the

Jason Rose: playoffs. I can't

Bill Russell: Oh,

Sarah Richardon: you,

Bill Russell: yes. You can't be.

Sarah Richardon: There you go. Just like that.

Bill Russell: all right, we're gonna hit, we're gonna hit a couple things.

You know, these are topics we hear pretty often. But actually let's go to let's go to JP PM. This [00:03:00] was a, an interesting article that was put out there and a couple of themes that this person had in this article. Four takeaways from JPM 2026 and the Fitness Landscape Trap Facing Health Systems. B Karate MD MPH master Public Health physician Executive and digital Health builder. And she has four thesis here. The shift in Healthcare Center of Gravity, implications of a.

Limited presence of health systems and providers in innovation discussions was our first point, second alarm technology, maturation and reliable clinical use cases, examining the transition from theoretical potential to practical validated applications in healthcare. Third was the new alignment, strategic partnerships m and a and the capital constraint exploring how capital requirements are shaping cooperation and consolidation among digital health entities.

And and the tech giants. And then the final was the regulatory angle. Government's role in driving value [00:04:00] in clinical ai, discussing the expanding influence of public SEC sector policy initiatives in accelerating AI adoption. Her core thesis on this article, which. Really surprised me. Health systems are being sidelined from healthcare innovation, trapped at local maximum of fee for service optimization while payers, pharma and tech companies are building the future without them.

Jason Rose: First of all I want to applaud JPM. For those of you who have not ever gone inside of the conference itself, most people at some point have been to San Francisco during a meeting, but a lot of people have never been inside.

This was the first year I've been about probably 10 times I've been in inside four or five times. This was the first year where they took the health systems. Organizations and they put them in a separate location in the Convene, which is a couple blocks in the road from the west end that they typically, it's like where it's like, just like this um, between each individual [00:05:00] presentation, this is the first year they put 'em separate.

So it was a. It was a a small little not-for-profit hospital system ecosystem for two, two days where you had the who's who of health systems, CEOs, CFOs, some chief digital officers there too. So, and it was just such a better event than I've ever been to. So I just wanted to say that was a great, brilliant move by jpm.

I'm gonna read this. Quote, I've never met this person. But the next line on the article, I'm curious if others share this observation. Healthcare systems and provider organizations seem notably absent from the innovation discussions at JP PMI, honestly, I went to all the presentations. I went to, I think they were like 15 of them.

I went to every single one of them, and I actually wrote in my post, I did a quick little post how. The very first thing, how it was such a prominent aspect not from the chief digital officers, from the CEOs, like, which is usually 80% of the [00:06:00] presentations, was all about AI tech innovation. It was um, really shocking to me about how forward thinking, forward looking, using technology to advanced cost optimization, revenue improvement.

Patient, you know, attraction, physician provider attraction linkage issues. And I was really taken aback about how exceptional these health systems were thinking in terms of their vision. I'm not gonna say that the uh, execution's gonna be easy, but it was a, the most prominent part of JPM in my opinion.

Bill Russell: It's interesting. I am sitting here right now looking at Intermountain's presentation, which is loaded with uh, forward looking redesign of the system based on technology and where it's going.

Jason Rose: We work extensively with Intermountain for a long time, and I.

I've been there now, I think a year and a half or two years. They have a huge vision on technology and enablement. So, it, it's, it was just [00:07:00] off base. I mean, oh, I think you Warner over at Sutter. I don't have it in front of me, but I remember him being focused on technology. Really. Every single one.

They're all, they theme in Warner, included at Sutter m and a was all a lot of focus on m and a. That Warner actually just hired a new head of corporate development is also in the news just a few days ago because they're focusing on outside of California for m and a. So there it's very consistent.

It was tech, it was m and a, it was cost optimization. It was very consistent across the board.

Drex DeFord: One of the things you said Jason was a good, you know, solid vision execution wasn't not a lot of talk about the actual execution. Can you say more about that?

Jason Rose: Well, you know, first of all, I'm talking about CEO.

The way these presentations work is, as you know, I'm not sure everyone knows they're 25 minute presentations. And so, you've got the CEO up there for typically 20 minutes or 18 minutes of the 25. So they're [00:08:00] gonna talk about a lot of things. And obviously you're gonna talk about their vision for 2026 and beyond.

So I, I'm just saying that there were less organizations that spoke specifically about results. I'll give you one example. I'm gonna call it Matt Cole over at Inova. Mm-hmm. Great presentation by. That leadership team Matt and I actually commented on his post when he has his JPM thoughts, but Matt was actually talking about the results of programs that he's implemented and outcomes which was different than other organizations.

So I think the execution is, you know, a year from now, let's see how much of those visions were actually executed upon will be interesting.

Drex DeFord: How much and how far?

Bill Russell: JP Morgan conference is bringing investors together traditionally the bond holders together with the health systems, right?

So these people are gonna finance their buildings and their plans going forward. So. as Jason pointed out the first 15 to [00:09:00] 18 minutes, you're gonna hear from the CEO forward thinking you know, what amazing things they've been able to do and that kinda stuff. The last seven minutes is the CFO.

Just going right through that. Yeah, right through the financials. I, it was interesting Matt Cole presenting. He was one of the only digital leaders to present. In fact, I think he was the only digital leader to present.

Jason Rose: Yeah. I don't remember others. I, but I think you're right.

Bill Russell: It, but historically there only has been like one or two.

I remember when John Halamka joined Mayo, he was up there talking about the uh, Mayo platform and what that meant for them. And when it intersects with. The fundamental strategy of where the organization's going. I think you hear from them, but that doesn't mean they weren't in the room. Donna Roach was in the room.

Daniel Barchi was in the room. I mean, those players were there. They were mixing it. They were part of the mix and probably part of the conversations that happened that 25 minutes. By the way, that's no joke. If you go 26 minutes,

Jason Rose: It's a big deal.

Bill Russell: Yeah. I mean, it's so. [00:10:00] That is rehearsed.

It is. Mm-hmm. You know, a presentation that, that marketing team's been working on for the better part of three months. And it is as polished as it gets. And if you get your hands on it I'm sitting here. I have the SSM presentation, Henry Ford, Tampa General Sentara. Mayo, Sutter, Providence, Cleveland Clinic, Intermountain.

So, I did not get to go this year. It's actually hard to get in that room.

Jason Rose: Impossible.

Bill Russell: Yeah.

Jason Rose: It's brilliant. I, I went, when I was at Innovalon for 10 years, we were going public in the the mid two thousands, the teens. JPM was courting us, so I, we actually presented there. Um, And we went several years in a row, but it's, I just, you know, it's hard to get a ticket.

It's nearly impossible. It's invite only the other, by the way, the other person, just a call out. I was, I thought it was a refreshing presentation and he's got a different background. Is em, Gandhi over at um, mass General Brigham. So, he's the CFO there, but he was as [00:11:00] much focusing on technology, innovation, things of that nature.

But if you look at his background, I've known him, well, I haven't talked to him about several years, but way back when I first met him, he was chief population chief Hub health Officer at Mount Sinai. Different kind of CFO, you know, but but most of 'em are, you know, straight I, one thing I've seen, and I think we've talked about this before in the last couple years, is that the CFOs seem to be rising in stature.

Inside these health systems very very much over the last two, three years. There's a lot of reorganization where many of the, not all but many of the IT leaders are moving underneath finance. Um, The finance leaders, generally speaking, are expected to try drive through execution, but also have a financial strategy.

And everyone knows, you know, all the issues with OB three and. All the labor cost issues um, you you know, I think it now more than ever, we need the CFOs to step up, [00:12:00] you know? Because it's such a critical moment in time.

Bill Russell: Yeah. This goes back to the old adage. We don't have healthcare organizations anymore.

We have banks that deliver healthcare. I mean, some of these they're managing portfolios of billions of dollars. They're you know, the payer, the float, the, all that stuff, those, the CFOs are extremely. Important people at every billion dollar organization. And some of these we're talking about 30, 40, 50 billion organizations.

Sarah, we just finished a summit. This past weekend you had the CIOs, I had the CMIOs. We talked about access. We talked, I mean, to be honest with you, we talked about AI access and the application of technology to the core problems that they're dealing with. So my experience was very much they're focused on how the technology is moving and how it gets applied.

I'm curious what the conversation was for your group. I mean, obviously we have. We have a trust circle, so we're not gonna share specifics, but just in general the, what were some of the topics, what were they focused in [00:13:00] on?

Sarah Richardon: What I believe was most interesting about this particular summit is we had a CFO.

At the table with us, it's the first time we've ever integrated A CFO with CIOs. This happens to be a very high performing CFO understands all the elements of what I would almost call the traditional CFO versus the advanced thinking CFO. Same thing. You'll have like a traditional CIO versus a true like CDIO and that.

CFO is on the upper echelon, like goes to JP Morgan, goes to all the big events presents. It's actually today presenting to a 400 hospital system in Japan about how to optimize your revenue and flows with the usage of AI for your clinical applications. And so a lot of the conversation was app rationalization, but also the opportunity to retire the platforms to streamline core it into an integrated focus around.

How does AI actually give us the opportunity to improve those [00:14:00] clinical workflows? So very specifically that every time you retire an application or upgrade the debt you have, maybe in your cloud or even in your on-prem systems, the ability to optimize that workflow and create a new opportunity. And that's inclusive of the conversation with the clinician, with the payer, with the patient, as an example, the holistic approach to how.

The health systems feel like they have more of a voice in what's happening around them.

Bill Russell: Jason that's in your wheelhouse. We've talked about Trinity before and some of the work that you've done across the industry. It's amazing to me that app rat, it is still hard for CIOs to pull off in healthcare.

It's really interesting but it is, and it represents a massive amount of money.

Jason Rose: Yeah, I agree. In you know, the article that came out on Friday we were talking about just before we got online with health leaders. And I wasn't, say, I didn't pay for this article, by the way. So this was a article that Trinity Health and Health leaders did without our involvement of any payment [00:15:00] of anything.

But it shows you know, some really great quotes by Mike Ick, who's the chief it strategy officer over at Trinity. And it, it's quoting a Gartner article from last July where we've saved $68 million on decommissioning 740 apps. But to Mike's point in the article, you can see, you know, it's not attractive.

He used the word, it's not sexy, but it's such a big financial lever. And I will say a couple things from what you just said, Sarah, is a lot of times I was talking to an academic medical center. Actually it was at the JPM conference and um, they were having, they're having challenge. It's not a client of ours.

They're having challenges getting their um, business users to let go of PeopleSoft and in place for 20 years. And I said, well, why are you having issues? And, well, they don't wanna lose their data. They're worried about losing their data and access to the views and all that. And it's it's interesting that's still.[00:16:00]

An issue. I mean, because you have a good archiving vendor, they can replace all those views and you never lose the data. And in fact you know, thinking about AI and you think about real world data, when you're archiving the data, you don't want to just put it into some silo, which like Iron Mountain or disrespect to them where you never get to see it again.

It actually should be part of your data platform. And so you're, you know, bringing in. The current data and the legacy data into one data field. It's kind of basic, if you think about it. It's not easy to pull off something we do. it takes some vision, but you don't wanna lose the data that's unless there's some legal reason that you want to delete it after a certain number of years, you really don't wanna lose that data.

It's so important for driving better business process and. And things of that nature.

Bill Russell: Dr.

Drex, what? What makes this so hard?

Drex DeFord: . I think a lot of it is this, they don't really know how to do it. They don't know how to consolidate [00:17:00] decommission apps and sort of, deal with the risk of losing the data.

And a lot of the data turns out to be really important to them. And I think it's, you know, kind of backtracking to this conversation about the CFO becoming more and more important, especially in bigger organizations, but in all healthcare organizations as a CIO, as a chief. Digital O Officer you have to develop trust with that CFO and there's really nothing that you can do that develops trust faster than looking at everything in that inventory, finding the duplicates, simplifying the environment.

It makes it easier and probably cheaper to secure. It makes it easier and cheaper to operate, and it takes a lot of complication out of. Contract management and renewals management and all the other things, you know, third party risk management, all the things that you're doing. It is a kill. 1, 2, 3, 4, 25 birds with one stone.

It isn't sexy, it's not cool, but the only way you're going to ultimately, I think, [00:18:00] develop some cash that you can use for innovative stuff in today's environment is to do that consolidation.

Jason Rose: Something I'm seeing as a new trend for those CISOs who are listening to this podcast is that we're starting to see some of our clients and we're encouraging them all to look at this, is if you look at the it remediation costs of keeping these applications online, it is seven figures or higher.

It is. Big numbers, to keep in compliance from a regulatory standard, compliance standards, just to keep these applications up and running

Patching them up not even the cyber risk, that's important too, but just the cost of the actual remediation is huge.

Drex DeFord: Mm-hmm. it is definitely the. If we talk about this all the time bill and Sarah and I talk about this all the time, simpler is better. You should just drive towards simplification every day and app rationalization and taking that data, putting it at a place where you can actually get to it without having the expense of the application turns [00:19:00] out to be a great way to simplify the environment.

Bill Russell: Who owns this in the health system? Is it the CIO who owns this because they owned it? Because the chief application officer reports into the CIO. Sarah, you look like you have something on your mind.

Sarah Richardon: I do because it is, it's almost like its own mini program. It's one thing to say we're gonna simplify, but by simplifying archiving data, extraction optimization workflow, the tail that comes with a retired contract that may have two or three more years.

How to, all of that complexity. Then getting users to want to use new systems and having that change flow be part of the equation takes a whole bunch of people with, maybe there's like this senior ex, an executive that has a ultimate accountability, but it's almost like that Pod Tiger team structure that is focused on this with an equal amount of accountability throughout the organization.

So it might be tapped to lead it, but they are [00:20:00] truly leading a cohort. Of equal accountability and outcomes that has to be pushed even from higher than them financially, CEO or whatnot, if that is not part of what people stick to with rigor over a long period of time. This just becomes the flavor of the two year cycle of what we're seeing inconsistent.

Executive turnover in some of these health systems.

Drex DeFord: It can be a project where it's like done and then Right. You know, because what happens is two years later you're doing app rationalization again and that's what needs the ongoing CIOs. Yeah. But I think this idea, Sarah, of having a coac accountable executive that's like the CFO and you make it a project that is bound to financial targets.

Like the reason we're doing this is a whole bunch of reasons, but this is really about. Helping us save money and do the right thing with the dollars, the limited dollars that we have, I think can be a great way to sort of drive the project into [00:21:00] place and then keep it running after that. Not just a project, but a program that keeps going.

Sarah Richardon: Just lends itself to a big conversation we had this last weekend was benchmarking, and what benchmarks are you using for your organization? Inclusive of it. If every single reduction is a hit to a benchmark that's about reduction of even things that actually do keep the lights on, you run a really close balance of enough people to do.

This work plus the innovative work, plus all the other things that are coming up in an org. And that's really was a pain point, is what benchmarks are being used to determine how many humans it takes to do some of these activities.

Jason Rose: If you think about I really admire many, I'm not alone in this with Epic.

So when Epic goes to do an implementation, this is, you know, often board level, you know, it's certainly CEO level. It's certainly not just looking at, it's a CIO's problem. And so, and they have to go live readiness assessment. They're doing scorecard. They're doing benchmarks and [00:22:00] metrics, and this is there's accountability.

I remember back in the day, the nineties when I was installing Millennium, I was responsible for power chart. But same thing I had for each department, I had, I had a, I had an IT leader, a my team. And then I had you know, a business leader that had to sign off on everything. It's not different when you're talking about application rationalization.

It needs to be business and technology together because the reason why these technologies are in place, whatever it is, Workday, epic, whatever. Um, It's for a business need. It's not for the, you know, it shouldn't be tech for tech, you know, as people not

Drex DeFord: for information services. Like, Hey Bill, you talk about in one of your newsletters last week you talked about annual recurring expenses, the sort of health system version of the vendor partners, a RR issue.

How does this all play into a RE in managing a RE?

Bill Russell: You know what, Drex, that's an excellent question. [00:23:00] People should read the uh, the, the LinkedIn healthcare CIO playbook and look for the fiction that I've been publishing out there. We will talk about that at a future time 'cause we are over time and, you know, what happens when we go over time, Landon makes fun of me and, and, and I don't like when Landon makes fun of me.

He's, you know, it's just it's very hard. But no, this was a great conversation. I appreciate it. Jason, thanks for bringing your perspective from the JPM conference. We'll try to get in that room next year that the nonprofit track is really exceptional To hear directly from all those CEOs what they're prioritizing for their health systems.

I think it's great.

Jason Rose: I think it's exciting.

Bill Russell: Yeah, and if couldn't

Jason Rose: agree more,

Bill Russell: and if people have the opportunity, you can track those decks down and they're worth worth looking at. Um, So hey, thank you everybody for being a part of this, and that's all for now. I.

That's Newsday. Stay informed between episodes with our Daily Insights email. And remember, every healthcare leader needs a [00:24:00] community they can lean on and learn from. Subscribe at this week, health.com/subscribe. Thanks for listening. That's all for now.