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In the News: October 11–18

Low-Income, Chronically Ill Adults Are Financially Burdened by HDHPs

A recent JAMA Internal Medicine study examined data from the Medical Expenditure Panel Survey Household Component data for 33,619 adults from 2011 to 2015, finding that nearly half of low-income adults with multiple chronic conditions in high-deductible health plans (HDHPs) had an out-of-pocket spending burden exceeding 20% of disposable income. The prevalence of financial burden from HDHPs on low-income income adults increased with the number of chronic conditions.

With the prevalence of HDHPs continuing to grow, health care consumers are increasingly making health care choices based on quality, price, access and convenience. Sg2 believes that health systems must recalibrate their offerings, including expanding access channels, to meet consumers’ changing demands. For a variety of resources to help navigate the changing health care consumer landscape, please see the Sg2 Consumerism Resource Kit.


Private Equity Investment in Orthopedic Practices Is Expected to Grow

According to health care investment bank Edgemont Capital, investment from private equity into orthopedic practices is expected to increase in the near future, with deals expected to lead to more acquisitions that will further consolidate local and regional markets.

The trend is being driven largely by the migration of hip and knee replacements to less expensive outpatient settings, as well as the volume increase of these procedures. Physicians found they can do better quality joint replacements at a lower-cost and on a larger scale when done through physician-led organizations. Additionally, market consolidation is being accelerated by physicians who want to increase practice sizes to gain negotiating leverage with payers.

The continued growth of total joint replacements, as well as the ever-changing payment landscape, means providers should be developing a heightened focus around these procedures. For more on these dynamics and how health systems can best position themselves, check out last month’s Sg2 Expert Insight post Total Joint Replacement: Unstoppable Change, Robust Growth and Your Destiny Await.


How Fragmented Ambulatory Care Impacts Patients With Chronic Conditions

A recently published Commonwealth Fund article explored how care fragmentation and the number of chronic conditions influenced health outcomes, with Medicare beneficiaries who had one or multiple chronic conditions, including hypertension, diabetes and depression, included in the patient cohort. The study’s findings suggest patients with 1 to 2 conditions and highly fragmented care were 13% more likely to visit the ED and 14% more likely to have a hospital admission. Alternatively, for patients with 5 or more chronic conditions, having the most fragmented care increased the likelihood of an ED visit but decreased the likelihood of a hospital admission.

Fragmented ambulatory care can cause communication gaps and compromise health outcomes, specifically, causing higher ED visit rates and hospital admissions, as well as increased costs of care. The study’s results indicate further investment in intervention and preventive care must be allocated to patients with underlying chronic conditions to improve health outcomes and reduce total cost of care.

Organizations are increasingly redesigning ambulatory care teams to better leverage protocols for care transitions and manage care utilization, and Sg2 believes that successful care redesign can reduce episodic care costs and readmissions. To learn more about care redesign strategies, watch the on-demand Sg2 webinar Care Coordination and Transitions: Where’s the ROI?

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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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