Washington Report- November 1, 2011

November 1, 2011 “As part of my Administrations broader effort to work with manufacturers, health care providers, and other stakeholders to prevent drug shortages, this order directs the FDA to take steps that will help to prevent and reduce current and future disruptions in the supply of lifesaving medicines.” President Obama instructed the FDA, in an executive order, to take action against the prescription drug shortages.This week’s edition of the Dell weekly Washington Report:  Baby-boomers and the Healthcare Landscape – A look into how a growing elderly population is changing the healthcare landscape and what the medical community is doing about it  Changing the Payer Market – Market dynamics, such as the aging population, drive changes in the Medicare arena  Healthwatch – A weekly digest of the latest news in the healthcare industry  #TopTweets – A few tweets worth noting this weekBaby-boomers and the Healthcare LandscapeA look into how a growing elderly population is changing the healthcare landscape and what themedical community is doing about itThe United States Census Bureau considers a “baby-boomer” to be one of the approximately77 million Americans born between 1946 and 1964. The first wave of boomers reached theretirement age this year, but very few may be able to take advantage of that luxury.Let’s take a look at some of the startling statistics:  About 60 percent of baby-boomers say their retirement plans, personal investments or real estate lost significant value in the recent recession  73 percent of baby-boomers plan to continue working into their retirement years to make up for lost investments  In 2010, about 13 percent of the US population was made up of people 65 and older, but in 2030, that percentage will increase to about 19 percent  The average life expectancy in 1980 was 73.7 years old, and is projected to be 79.5 years old in 2020Many of today’s healthcare providers are baby-boomers, and though many of them willcontinue to work past the retirement age, we must ensure that medical colleges are not onlytraining enough future providers to fill the shoes of those about to enter retirement, but alsotraining even more providers to care for the increasing aging population. Iveris Martinez, agerontologist and assistant professor at Florida International University’s medical school, asks,“Are we ready for the baby boomers growing older? The consensus is no. We simply don’thave enough health professionals with specialty training in geriatrics.”

Stepping up to the PlateThe baby-boomers may be able to take a small sigh of relief. While the issue of fundinghealthcare for our growing number of seniors remains, medical school enrollments are up!In 2006, the Association of American Medical Colleges responded to concerns about ashortage of physicians in the future by recommending medical schools increase enrollmentby 30 percent by 2015, and the schools listened. In 2002, there were 16,488 first-yearmedical students, but in 2011 there were over 19,200 first-year students, which is threepercent higher than last year.Schools are not the only ones pulling their weight. The number of applicants to medicalschools reached 43,919 this year, which is the highest in a decade. There were 32,654 first-time applicants, a 2.6 percent increase from last year. Dr. Darrell Krich, president of theAssociation of American Medical Colleges, said a large paycheck is not a significant driver inthe increase in enrollment since students can accumulate an average of $161,000 in debt bythe time they graduate.If US medical schools can reach the Association of American Medical Colleges’ goal ofenrolling 21,041 first-year medical students in 2015, the medical field should be better-equipped to provide quality healthcare to the aging baby-boomers. So far, they are on track. Return to topChanging the Payer MarketMarket dynamics, such as the aging population, drive changes in the Medicare arenaMedicare continues to be an enticing market for health insurers even though it sits on thechopping block as Congress continually works to bridle the federal budget. MedicareAdvantage plans came about after the Balanced Budget Act of 1997 permitted Medicarebeneficiaries to receive their Medicare benefits through private health insurance plans,offering basic Medicare coverage with extra benefits, such as prescription drugs, dental andvision care and health club memberships.Even though government-run Medicare plans make up 75 percent of Medicare enrollment,Sarah James, a Wedbush Securities analyst, predicts that private Medicare Advantage planscould make up 50 percent of the Medicare market in the next five years. Reuters reports thatMedicare Advantage members bring in about three times more revenue than commercialmembers because Medicare patients are older, have more frequent doctors’ visits, and oftenpay higher premiums than patients who receive insurance through an employer. MedicareAdvantage plans, which have lower premiums because they include a smaller network ofproviders, more than doubled, from 5.3 million in 2005 to 11.1 million in 2010. Thesenumbers will spike even higher since the first baby-boomers turned 65 this year, and moreand more will join the ranks in retirement in the next few years.Health insurer, Cigna Corp, the fourth-largest commercial health insurance provider, is oneof the many Health Maintenance Organizations (HMOs) redirecting their individual lines ofbusiness to cater directly to the consumer’s needs. Last spring, Cigna divested itsgovernment business line, Cigna Government Services (CGS), when BlueCross BlueShield ofSouth Carolina purchased it. To take advantage of the growing Medicare Advantage market

and augment this line of business, Cigna plans to buy HealthSpring, Inc. for $3.8 billion in thefirst half of 2012.Currently, HealthSpring supports about 340,000 Medicare Advantage customers in 11 statesand Washington D.C., and it offers Medicare prescription drug business to more than800,000 customers. Profit margins for Medicare Advantage lines of business can range fromthree to five percent.The Cigna acquisition is only one of many Medicare Advantage purchases this year. InAugust and September, respectively, Humana announced its intentions to acquire ArcadianManagement Services and MD Care, both Medicare Advantage Health MaintenanceOrganizations (HMOs). Just last year, HealthSpring acquired Baltimore-based MedicareAdvantage HMO, Bravo Health Inc. for $545 million.It will be interesting to see how the payer market responds to this trend. Return to topHealthWatchA weekly digest of the latest news in the healthcare industryU.S. Supreme Court to Consider Challenges to the ACA in November- On November 10th,the U.S. Supreme Court will hold a closed-door conference to consider whether to grantreview of one or more challenges to the Affordable Care Act (ACA). To date, five of the sixpetitions before the Court have been sent to the justices for consideration at the conference.These include petitions by the Thomas More Law Center, the National Federation ofIndependent Business, Liberty University, and 26 states, who are all challenging theconstitutionality of the ACA, as well as a petition by the federal government. The sixthpending petition filed by the Commonwealth of Virginia will be ready once the federalgovernment files a response brief. During the conference, the Supreme Court Justices willhave the discretion to decide which petitions, if any, should be reviewed, and which issues itis ready to decide on.RWJF Seeks Healthcare Quality App in $100K Challenge- The app challenge, hosted bythe Robert Wood Johnson Foundation (RWJF), aims to develop an easy-to-use online portalto help patients find better information on prospective physicians and hospitals. Much of thisinformation is already available online, but the goal is to place these metrics in an interactive,patient-friendly application. Quality will be measured by safety, point of care, proceduresuccess and accuracy. The app will help provide patients with the ability to connect with theright doctor or hospital for their individual needs and improve communications withdoctors. Mike Painter, senior program officer at RWJF, believes using apps to makeinformation more accessible can transform healthcare. There will be 2 phases of the appchallenge, and phase one allows any interested developers the chance to submit theirapplication. The winning application, which will be announced in June 2012, will receive$100,000.New Mobile App Looks to Overcome Overcrowding for Docs- Fortune reported on aninnovative new mobile application from tech company ZocDoc that aims to disprove thenotion that physicians misuse gadgets and technology in their practice. The new web and

mobile app allows patients to search for doctors, read reviews, schedule an appointment andmuch more. The author likens this to the OpenTable application that allows consumers toreserve a spot at the hottest restaurant in town easily on their smartphone. The companyhas seen about 70,000 monthly users, and doctors and hospitals are some of the app’sbiggest fans. The application is helping practices manage appointments and reduce theamount of paperwork needed from patients. The app will reduce costly no-shows forphysicians and make the entire point-of-care process easier on patients. Though thisapplication is in early adoption, the potential for new, easy-to-use apps by both patients andphysicians is on the rise.Barcode Scanners to Transfer Data into EHRs- Cook Children’s Hospital in Fort Worth, TX,is leading the charge in vaccine and EHR integration with a system that sends scanned 2Dbarcodes on vaccine bottles directly to an EHR database. The FDA recently liftedrequirements of using barcodes on vaccines, and now physicians will be able to scan thesebarcodes directly into an EHR. The data will be streamed, first, into Microsoft’s HealthVaultplatform and Athenahealth’s EHR database. Within the next year, 2D barcodes will appearmore frequently on vaccine bottles in a more appropriate size for compatibility withscanners. Vaccines entered directly into a patient’s EHR help eliminate physician errors andallow physicians to better manage their vaccine supplies. Also, patients will be able tomaintain a more accurate record of vaccines and the ability to manage their health data inan online EHR platform.Medicare Premiums not as High as Anticipated- According to The New York Times,Medicare premiums will rise to $99.90 a month next year, which is a $3.50 increase from lastyear. In May, premiums were estimated to rise to as much as $160.60 a month. The smallerincrease may instead reap benefits for the Obama 2012 campaign. Some credit the smallerincrease to prudent program management and renewed inflation during the year. Proposalsare currently under review that would establish new co-payments for home healthcare andclinical laboratory services and reduce future cost-of-living adjustments in Social Security. Return to top

#TopTweetsA few tweets worth noting this week @DellHealth Dell Healthcare Infographic: The future of Electronic Medical Records dell.to/sltVZK #DoMore #EMR @CTIAShows CTIA Shows Did you miss the Social Mobile breakfast with @Gartner_Inc and @Dell? Find out whatthey discussed here: bit.ly/qsXNI3 @NateOsit Nate Osit Many patients taking a pass on electronic access to records http://bit.ly/rY88ir Need more patient education! #s4pm #EHR @acumenehr Acumen EHR Tablets Now Changing the Game at Point of Care http://dld.bz/awJqc #EHR #mobile #healthIT #mdchat @Aceso_UpCare Aceso #CHIME survey: 26% of CIOs say their orgs qualify for stimulus funding http://bit.ly/oYSzTR #MU #healthIT @CMIOmagazine Return to topFor previous editions of The Washington Report, click here. To contact us, direct message us@DellHealth or send an email to Ask_Dell@Dell.com.

Washington Report- November 1, 2011

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