In the News: Jan 18–25

Health Systems to Form Generic Drug Company

Intermountain Healthcare, Ascension, SSM Health and Trinity Health announced their plans to create a not-for-profit generic drug company this week, working with the US Veterans Affairs Department in an effort to manufacture essential generic drugs and create cheaper pharmaceuticals for patients. The group includes more than 450 hospitals—nearly one-tenth of all US hospitals—and more health systems are expected to join soon.

This is the latest example of how hospitals and health systems can partner to lower rising costs throughout the industry. For more on how hospitals can manage rising drug costs, read the Sg2 Expert Insight, Don’t Despair! Strategies to Mitigate Rising Drug Costs.

ACOs With Greater Financial Risk Are Eligible for Greater Earnings

A recent analysis found that accountable care organizations (ACOs) that participated in Track 1 of the Medicare Shared Savings Programs, where they do not bear downside financial risk, could have earned additional net payments of $886 million in 2015 had they shifted to Track 2 and assumed greater financial risk.

This is because ACOs that assume downside risk can be classified as advanced alternative payment models, which qualifies them to earn a bonus payment of 5% of their Part B expenditures under the Quality Payment Program. This incentive is part of CMS’s broader efforts to increase the portion of Medicare payments tied to quality by encouraging more providers to take on downside financial risk.

Sg2 believes that with CMS getting serious about using new models to generate savings for the Medicare Trust Fund, taking on risk is no longer optional for hospitals and health systems. To learn more about CMS’s most recent effort, the Bundled Payments for Care Improvement Advanced (BPCI Advanced) voluntary bundle program, read the Sg2 expert insight, CMS Announces BPCI Advanced…Finally.

The Flu Is Widespread and Still Increasing Nationwide

As part of its weekly influenza surveillance report, last week the CDC classified influenza as widespread in Puerto Rico and 49 states, noting that influenza activity has continued to increase. Across all surveillance regions, the proportion of outpatient visits for influenza-like illness exceeds region-specific baseline levels. Based on virological tests submitted to the CDC, 80% of flu cases in early January involved the H3N2 strain, which is more difficult to prevent with vaccinations and has resulted in a more severe flu season in 2018.

To learn more about the infectious disease service line, including shifts in care setting, delivery and strategic opportunities for health systems, please watch the on-demand Sg2 webinar, Medicine Update 2017: Transmissible Strategies for Infectious Diseases.


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