In the News: March 9–15

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.

Study Finds Physician-Level Spending Variation Opportunities

A new JAMA Internal Medicine study found that Medicare Part B spending variation per hospitalization across physicians in the same hospital is larger than variation across hospitals, and there is no association between physician spending and outcomes (mortality and readmission rates). Both of these findings suggest that addressing physician spending variation may improve health care delivery in an acute care setting. These findings are well-timed, as Part B reimbursement will be tied to physician performance or participation in advanced risk-based models under MACRA.

Sg2 urges strategy leaders to focus on MACRA strategy and execution due to its direct impact on many other strategic initiatives (eg, physician alignment, clinically integrated networks and payer strategies). Sg2 is also hosting an in-person interactive MACRA course on April 27 for strategy and clinical team members contemplating organizational next steps.

C-Section Rates Under Scrutiny

A recent Leapfrog study shows 55% of reporting hospitals have excessive c-section birth rates and proposes 24% as the target c-section rate. While c-sections are sometimes medically necessary, short- and long-term risks include blood clots and infection for both mother and child, as well as breathing difficulties and increased risk of developing diabetes and asthma for the baby.

Variation in c-section rates by state and hospital range from under 10% to nearly 70%, suggesting that c-sections will be targeted for performance improvement and episode cost reduction. Increasingly savvy patients will also be looking for quality data to guide labor and delivery decisions. Read the Sg2 Expert Insight: C-Sections Emerge as a Cost and Quality Measure: What Is Your Hospital’s Rate? to learn how to demonstrate performance to patients and payers through your c-section rates.

Practice Extender Teams: A Positive Economic Approach

A recent HealthAffairs study addresses economic outcomes for home health–based practice extender teams (registered nurses and other supporting medical professionals) based on 5 different CMS-funded models. Previous studies have suggested cost savings by utilizing teams directed by primary care providers, but the outcomes of practice extender teams are relatively unknown. The models evaluated in the HealthAffairs study contributed positive economic results, including decreased expenses, reduced ED utilization and a demonstration of overall value.

Sg2 believes success in the home health arena will require a keen understanding of individual markets’ post-acute care landscapes and a guarded view of the financial and operational complexities of service delivery. Read Sg2’s System of CARE Guide: Linking Home Health to Systems of CARE to learn the building blocks required to effectively link home health to Systems of CARE.

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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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