Sg2 Forecast: Value-Based Payment Models Emphasize Ambulatory Care

Each year at Sg2, we debut the latest health care projections from our Impact of Change® (IoC) demand forecast. The transition to value-based care is well on its way, and providers are facing head-on a changing payment and regulatory landscape that emphasizes efficiency, appropriate use and transparency. This new market places a premium on accessible, high-value, evidence-based, patient-centered care. New payment penalties, payment model experimentation and expanded imperatives for quality outcomes have already begun to shape utilization patterns—just as predicted in Sg2’s prior forecasts.

Recent historical data are showing a slowdown in inpatient growth and declines for select, high-volume conditions across the US. The need to reshape care delivery continues, as demonstrated in Sg2’s projections for an ongoing decline in IP utilization and a softening of growth for ED visits and advanced imaging. At the same time, expect sustained growth in observation and virtual visits, and services focused on the management of chronic conditions.

This month, Sg2 releases the 2015 version of our national and regional IoC data sets to our clients, in which we project a 4% decline in adult inpatient discharges overall and a 19% growth in outpatient volumes over the next 10 years. The 2015 forecast includes new procedures and CARE Families (ie, diseases or conditions) and nearly 20,000 forecasts broken out by disease and procedure. It also includes dashboards that offer exportable, predefined graphs and data tables, which can be incorporated into planning documents and presentations.

Sg2 Projects Strong Growth in Ambulatory Services
As emerging value-based payment models take hold and payment penalties expand (eg, penalties for 30-day readmissions), Sg2 continues to project strong growth in ambulatory care that focuses on disease and complications prevention, and care coordination.

Efforts to Optimize Care Will Shape Utilization
To best manage outcomes across the entire patient journey, a coordinated System of CARE and multiple collaborative providers will be essential. Models that utilize team-based care, the medical home and virtual technologies will optimize care integration. Sg2 anticipates that, in 5 years, 7% of all E&M (office) visits will be performed virtually and that by 2025 this percentage will increase to 16%.

Service Line Forecast Highlights
IP volumes continue to dampen across service lines. In the OP setting, double-digit 10-year growth will occur across most service lines. OP growth will be due in part to advances in medical therapeutics and ambulatory surgical interventions, as well as new incentives fueling increased demand for provider visits and diagnostics focused on disease management and care coordination. Despite strong OP growth overall, it will be tempered (particularly for diagnostics and imaging) by the adoption of value-based principles, such as appropriate use guidelines and standardized, evidence-based guidelines that discourage unnecessary testing.


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As of February 11, 2016, Vizient, Inc. has completed its purchase of MedAssets Sg2 and spend and clinical resource management segments from Pamplona Capital Management, LLC. MedAssets revenue cycle business will continue to operate as a wholly-owned subsidiary of Pamplona Capital Management LLP.

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