1. Cardiovascular Market Trends
Health Care Industry Committee
Cardiovascular Market Trends
Ready-to-Use Presentation Slides

2. Examining Five-Year CV Growth Trajectories
Forecasting Growth in CV Outpatient, Medical Services
All-Payer Volume Growth Projections
CV Volume Growth Projections by Sub-Service Line
Cardiac Services
Vascular Services
Outpatient EP1
Outpatient Medical Vascular
Outpatient Vascular Cath
Outpatient Medical Cardiology
Inpatient Cardiac Surgery
Outpatient Cardiac Cath
Inpatient Cardiac EP
Inpatient Medical Cardiology
Inpatient Cardiac Cath
Electrophysiology.
Source: The Advisory Board’s Inpatient and Outpatient Market Estimator tools; Advisory Board research and analysis.

3. Five Year Growth Trajectories Inducements and Barriers
Assessing Drivers of CV Subspecialty Growth
Five Year Growth Trajectories
Inducements and Barriers
Inpatient and Outpatient,
Demographic
Poor patient compliance with lifestyle and prevention options
Increasing prevalence of obesity, high cholesterol, diabetes and hypertension
Aging population
Clinical
Treatment advancements shift care to outpatient setting
Improved ambulatory disease management reduces HOPD volumes
Market
Increased market competition
RAC audits discourage inappropriate utilization
Emphasis on readmission prevention
Rising costs disincentivize premium device use, spurring more downward innovation
Coronary artery bypass graft
Percutaneous coronary intervention
Cardiac resynchronization therapy with defibrillation
Peripheral vascular intervention
Source: The Advisory Board’s Inpatient and Outpatient Market Estimator tools; Advisory Board research and analysis.

4. Numerous Forces Placing Pressure on CV Margins
Federal Policies, Demand Transformation Taking Their Toll
Forces Impacting Future CV Margins
Decelerating Price Growth
Continuing Cost Pressures
Increasing Patient Acuity
Increasing Spend Scrutiny
Federal, state budget pressures constraining public payer price growth
Payments subject to quality, cost-based risks
No sign of slower cost growth ahead
Drivers of new cost growth largely non- accretive
Incidence of chronic disease, multiple comorbidities rising
RAC1, payer scrutiny for over-utilized services
AUC2 adoption
Shifting Payer Mix
Deteriorating Service Mix
Continuing Outpatient Shift
Proliferating Risk- Based Contracts
Baby Boomers entering Medicare
Most demand growth over the next decade comes from publicly insured patients
Medical demand from aging population threatens to crowd out profitable procedures
Substantial shift from inpatient to outpatient setting
Typically carries substantial profit risk
Expected growth in federal, commercial contracts
Recovery Audit Contractor.
Appropriate Use Criteria.
Source: Advisory Board research and analysis.

5. Payers Linking CV Payments with Quality, Costs
CV Heavily Impacted by Expansion to Pay-for-Performance Programs
Medicare Pay-for-Performance Programs
Low
Magnitude of Impact on CV Services
High
Hospital-Acquired Condition (HAC) Penalty Program
Updates to Quality Reporting Programs
VBP, Readmissions Penalty Program Expansions
New program with payment impact beginning FY (October 1, 2014)
Assesses HAC performance for patient safety and CDC NHSN1 measures
Penalty only, 1% maximum cut to Medicare rates to only lowest performing quartile
Unlikely to significantly impact CV services
Annual updates to traditional quality reporting programs:
Inpatient Quality Reporting (IQR)
Outpatient Quality Reporting (OQR)
Physician Quality Reporting System (PQRS)
Value-Based Purchasing Modifier
Value-Based Purchasing
Performance metric changes
Inclusion of new domains
Percentage withhold increase
Hospital Readmissions Penalty Program
New conditions added
Penalty increase
National Healthcare Safety Network.
Sources: CMS; Advisory Board research and analysis.

6. Major Forces Shaping Care Quality
Forces Impacting Future CV Care Quality
Utilization Scrutiny
Aging Population
Appropriate use scrutiny, service utilization drive quality imperatives
Growing elderly patient population increases CV disease burden
Chronic Disease Prevalence
Care Coordination Emphasis
Patient Centeredness
Rising chronic disease, multiple comorbidities
Long-term patient needs demand care coordination, full continuum management
Continued emphasis on patient experience, multidisciplinary care
Source: Advisory Board research and analysis.

7. Examples of Common CV Disease Centers
Leveraging Disease-Centered Models of Care
Tying Sets of CV Services Together for Cross-Continuum Management
Examples of Common CV Disease Centers
Heart Failure Center
Represents one of the pioneer CV centers
Requires collaboration between medical cardiology, EP2, and HF3 specialists
Targets HF patients and multimorbid disease
AF1 Center
Serves as a more advanced CV disease center
Requires EP, HF, and surgical collaboration
Targets EP and HF patients, as well as structural heart
Valve Center
Represents progressive CV center, especially with structural heart focus
Requires interventional and surgical collaboration
Targets aortic and mitral valve disease patients and other structural heart
Key Advantages of Disease-Centered Care Delivery:
Greater efficiency
Improved quality
Improved capture of downstream business
Shared learning across specialty lines
Stronger physician and staff knowledge
Increased patient satisfaction
Atrial fibrillation.
Electrophysiology.
Heart failure.
Source: Advisory Board research and analysis.