In the News: May 25–31

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.

Direct Relief Partners With Pfizer to Donate Naloxone

The charitable organization Direct Relief has partnered with Pfizer to donate up to 1 million doses of the overdose-reversal drug naloxone. The medication is being sent to free health clinics, community health centers, public health departments and other not-for-profit providers across the country. This contribution comes at a time when the US has not only experienced significant increases in opioid-related overdoses, which has caused a spike in demand for naloxone, but also after criticism of increases in the drug’s price.

As an expert in behavioral health trends, Sg2 has developed insights and resources to help providers manage the growing demand for addiction and chemical dependency services. To learn about prevention and treatment options for cost avoidance and savings, as well as opportunities for growth, check out the Sg2 on-demand webinar: Behavioral Health Update: Addiction and Chemical Dependency Landscape.

Unnecessary Medical Tests Lead to Poor Cost and Quality Outcomes

A recent Kaiser article explores California initiatives to reduce costly and unnecessary medical testing and treatment. Experts estimate this excessive care accounts for more than $200 billion in national health care expenditures and leads to more than 30,000 medical deaths per year. By adhering to the American Board of Internal Medicine’s Choosing Wisely treatment guidelines, several California providers were able to reduce variation in care, avoid needless spending and drive better patient outcomes (eg, lower readmission rates, complication rates and length of stay).

Sg2 believes that variance and cost reduction is central to competing in any market, whether it is predominantly fee-for-service or on the forefront in new value-based payment models. To learn more about how your organization can reduce variance in health care cost and quality, read the Sg2 report: Elements of Care Redesign: Variance and Cost Reduction.

CBO Estimates AHCA Will Decrease Federal Health Care Funding by $1 Trillion

The Congressional Budget Office (CBO) and the Joint Committee on Taxation released their latest score of the American Health Care Act (AHCA), as passed by the House of Representatives. Over a 10-year time frame, the CBO projects the AHCA will increase the number of uninsured people by 23 million and reduce federal health care funding by nearly $1 trillion (reduction of $834 billion for Medicaid, reduction of $276 billion in subsidies for nongroup insurance and an increase of $117 billion in grants for insurers of people with high health care expenditures). For more details, see the Commonwealth Fund’s visual summaries of the AHCA’s projected impact for coverage, premiums and Medicaid funding.

The fate of the AHCA now lies with the Senate, where it is anticipated to undergo substantial changes. That being said, this scale of projected federal health care funding reductions means providers will face tough decisions ahead. Sg2 believes that 2017 is the year to challenge yourself and your organization to make better decisions. Read the January 2017 Sg2 Letter for an exploration of the decision-making landscape, focusing on 4 dimensions: your market, your clinical offerings, your organization and your personal choices.

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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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