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In the News: September 15-21, 2016

Sg2 is dedicated to helping our clients interpret the latest news and trends in health care. Below you’ll find our analysis of this week’s key industry headlines, along with links to related Sg2 resources.

BPCI Garners Mixed Results

CMS has released the second annual evaluation report for Models 2, 3 and 4 of the voluntary Bundled Payments for Care Improvement (BPCI) initiative. The table below highlights analyses from the first year of Phase 2 (ie, episodes initiated between October 2013 and September 2014) of Model 2—which includes the inpatient stay and the postdischarge period—for orthopedic and cardiovascular surgery episodes.

BPCI Model 2 Results, October 2013–September 2014

Orthopedic Surgery Cardiovascular Surgery
# of Hospitals Participating 82 30
Total Episode Payment for 90-Day Episodes Declined $864 (ie, 3%) relative to comparison group episodes No statistically significant difference
Other Statistically Significant Differences Relative to Comparison Group Episodes
  • IRF payments declined $459 relative to comparison group episodes.
  • Average SNF length of stay shortened by 1.3 days.
  • Decrease in discharges to SNF, IRF or long-term care hospitals from 64% to 57%.
  • Number of home health visits increased from 15.8 to 16.6.
  • Decrease in discharges to SNF, IRF or long-term care hospitals from 55% to 44%.

IRF = inpatient rehabilitation facility; SNF = skilled nursing facility
Sources: The Lewin Group. CMS Bundled Payments for Care Improvement Initiative Models 2-4: Year 2 Evaluation & Monitoring Annual Report. August 2016; Sg2 Analysis 2016.

The prevailing reported strategy for Model 2 participants has been to address post-acute care spending. Specifically, BPCI participants focused on reducing utilization of high-cost post-acute care sites. Additionally, hospital representatives reported that they improved discharge planning and case management. Sg2 has been closely following the development of CMS bundled payment programs and advising members on how best to prepare for them, read these recent Sg2 Expert Insights:


New Jersey Hospitals Collaborate to Lower Sepsis Mortality

On September 16, the New Jersey Sepsis Learning Action Collaborative, which includes 73 health care organizations, released the first-year results from its campaign to decrease sepsis mortality by 20% in New Jersey hospitals. After 1 year, the Collaborative announced that they have decreased sepsis mortality by over 10%. The Collaborative attributes these promising outcomes to a marked increase in adoption rates of hospital-wide severe sepsis protocols, increased adoption of sepsis screening tools, and increased compliance with a set of evidence-based actions that are recommended to be completed within 3 hours of diagnosis.

While Sg2 forecasts a continued surge in the incidence of septicemia in the inpatient and outpatient settings, in the short- to midterm impacts will begin to reduce morbidity and mortality, and in the long-term impacts will begin to dampen growth of sepsis volumes. For a detailed description of Sg2’s latest forecast, short- to long-term impacts, and considerations for program components, channel management and technology, see pages 6 and 7 of the Sg2 Medicine Forecast 2016.


Kaiser Family Foundation Releases 2016 Employer Health Benefits Survey Results

The Kaiser Family Foundation released results from its 2016 Employer Health Benefits Survey, an annual survey of employers that details trends in employer-sponsored health coverage. Key highlights from the survey follow:

  • ~150 million nonelderly people are covered by employer-sponsored health insurance.
  • Average annual premium is $6,435 for single coverage, which did not increase from 2015.
  • Average annual premium is $18,142 for family coverage, a 3% increase from 2015.
  • Average premiums for high-deductible health plans with a savings option are considerably lower at $5,762 for single coverage and $16,737 for family coverage.
  • The average deductible amount for single coverage is $1,478, a 12% increase from 2015.
  • 29% are in high-deductible health plans with savings options, a growth of 5 percentage points in overall share of covered workers from 2015.

While premiums continue to rise at a relatively stable rate, there is a marked increase in average deductibles. As cost sharing with employees continues to grow, patients will increasingly become more discerning health care consumers. Read the recent Sg2 report Pricing Strategy to learn more about the steps system leaders can take to recalibrate their pricing approaches to appeal to both payers and patients and secure market share.

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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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