Washington Report - October 11, 2011

October 11, 2011 "Today the world lost a visionary leader, the technology industry lost an iconic legend and I lost a friend and fellow founder. The legacy of Steve Jobs will be remembered for generations to come.” Michael Dell, remarking on the death of 56-year old Steve Jobs, co-founder of Apple.This week’s edition of the Dell weekly Washington Report:  The Health Insurance Spike – Health insurance premiums have spiked by nine percent making it the fastest inflation since 2005  Myth or Reality: Innovation is Expensive –The shift to the cloud has greatly impacted investment in innovation  Health Watch – A weekly digest of the latest news in the healthcare industry  Tweets for Your Consideration – A few tweets worth noting this weekThe Health Insurance SpikeHealth insurance premiums have spiked by nine percent, making it the fastest inflation since2005The cost of health insurance premiums rose a mild three percent in 2010, but took a ninepercent leap in 2011, according to an annual study by The Kaiser Family Foundation andHealth Research & Educational Trust looking at employer-sponsored health insurance. Thesespikes are being felt across the country. The Kaiser study showed that 60 percent ofbusinesses with three or more employees offer health insurance to workers, and over 80percent of workers eligible for coverage took advantage of it. Now, the average for annualpremiums for employer-sponsored health insurance is $5,429 for single coverage and$15,073 for family coverage, which has more than doubled since 2001 when the averagepremium was $7,061.Kaiser president and CEO, Drew Altman said, "This year’s nine percent increase in premiumsis especially painful for workers and employers struggling through a weak recovery." In fact,many employers see increased healthcare costs as a deterrent to bringing on new hires,which can’t be good news with the national unemployment rate at 9.1 percent. To make upfor increased health insurance costs, employers are passing the buck to the workers. Now,for the first time, half of all workers at small businesses pay $1,000 or more in deductibles,which is a significant jump from only 16 percent of workers in 2006.Why the sudden jump in insurance costs? Karen Ignagni, president and CEO of America’sHealth Insurance Plans (AHIP), commented, “Policymakers in Washington and the states needto focus on all of the factors that are driving premium increases: soaring prices for medical

services, changes in the covered population that has resulted in an older and sicker risk pool,and new benefit and coverage mandates that add to the cost of insurance.”Researchers estimate that only about 1.5 percent of the nine percent increase is directlycaused by the Patient Protection and Affordable Care Act (PPACA). The 2 points in the PPACAlikely to cause the greatest health insurance increase are: (1) allowing children to stay on theirparents’ plans until they are 26 years old, and (2) requiring those who are not grandfathered-in to the plans to provide preventive services without sharing costs with the patient. On theflip side, the healthcare reform bill has led to more preventive care benefits and it hasallowed about 2.3 million young adults under the age of 26 to enroll in their parents’insurance plans.Increases in health insurance costs are causing patients to postpone their doctors’ visits anddeterring them from getting expensive, yet necessary, procedures. Even though the PPACAaccounts for only 1.5 percent of the increase, the overall spike of health insurance begs us toask if this is a one-time spike or if we can expect to see costs in health insurance trendingupward. Return to topMyth or Reality: Innovation is ExpensiveThe shift to the cloud has greatly impacted investment in innovationMyth: Innovation is expensiveReality: While implementing new technology and conducting drug research are bothexpensive initiatives, most innovations require a modest, disciplined investment of time andbrain power.Speculation would have most healthcare professionals believe that innovation is expensive;however, if you rethink your organization’s approach to innovation, the results will reveal amisperception.Many organizations focus too much on identifying and implementing new technologieswhile neglecting how to apply the technology based on an analysis of existing, and moreimportantly, emerging trends in the market. Jim Stikeleather, Dell’s chief innovation officer,penned a series of blogs titled “Debunking the Myths of Innovation,” aiming to dispel themyths related to innovation in IT.The shift to the cloud, which is one of the great examples of innovation over the last decade,impacted our approach to innovation even more than many of us could have realized. Ratherthan focusing on investment and innovation in an organization’s IT infrastructure, thereduced cost that the cloud often provides can allow organizations to refocus on point-of-care delivery.The excerpt below summarizes Jim’s view on investment in innovation: “I would argue the assumption about the need for even more investment in innovation. One of the unintended consequences of the move to cloud / utility computing is that it totally disrupts the economic frictions that heretofore dictated the

invention / innovation cycle of IT. With much less funding than required before, startups can create highly niched offerings that can be very profitable (due to reduced costs or friction in sales, distribution, support, maintenance, etc.). As more leveraged infrastructure and services (IaaS, PaaS, SaaS) are brought into play, the cost of IT and IT investment goes down and gets reallocated from “maintenance, hygienic and housekeeping activities” to true customer value creation and competitive differentiation activities. This, in turn, requires a much more systemic process for innovation. Through careful consideration and analysis of trends using old-style forecasting techniques, businesses will find that innovation is not expensive. Knowing when and how to apply a new technology is of vital importance and can save businesses developing and investing in a new product that can become outdated quickly.”In healthcare, we must take the same approach. Healthcare professionals and IT executivesmust focus not only on making the right investments in technology, but also onunderstanding that the marketplace is changing and that barriers for entry are dissolving. Theshift to the cloud has made it easier than ever for organizations to bring their product tomarket without a heavy investment in IT infrastructure. A leveraged cloud-based platformcan allow leadership to focus further on their service offerings and improving quality.This requires approaching data with a different mindset and more closely analyzing markettrends. Stikeleather explains: “The crux of innovation is to detect where, when and how these trends are evolving – where the trends will lead – and also what these signal about future trends that are not yet obvious. The trick is not in developing the new technology (including process technologies) but in knowing when and how to apply it through careful analysis of existing and emerging trends.”Jim offers a roadmap to approaching innovation in his blog post. To learn more about thetechniques and read Jim’s other blog posts, click here. Return to topHealth WatchA weekly digest of the latest news in the healthcare industryChallenges Facing Text Message-Based Healthcare Campaigns- According to a PBSNewsHour report, many organizations are facing new challenges that are having a negativeeffect on their text message-based health campaigns. Campaigns are springing up using textmessages to help patients stop smoking, send vaccination reminders, and keep patientsupdated on prenatal and infant care, but these may prove ineffective. Little research has beendone to track whether or not these campaigns lead to healthy behaviors and with the rise ofsocial media applications like Twitter, we may already be seeing a changing tide in textmessage-based campaigns.

Meaningful Use: Now 100,000 Strong- Government Health IT reports that provider EHRincentive registrations now exceed 100,000. According to the Centers for Medicare andMedicaid Services (CMS), the number of physicians and hospitals signed up for the programsis up almost 30,000 since August. As of September 30th, CMS has paid more than $850million in incentives, proving providers greatly exceeded the thresholds for Meaningful Usecore measures. Robert Tagalicod, director of CMS’ Office of eHealth Standards and Services,stated, “The EHR incentive programs are already helping our healthcare system move fromwhere we are today to where we need to be in the future by promoting the adoption of EHRand health information exchange.” Stay tuned next month for another update.Healthcare Data Collection: MAPped Out- MAP, the Measure Applications Partnership,released reports on patient safety data collection and clinician performance measurementlast week. The reports included recommendations to HHS at the agency’s request. Withineach report are strategies that call for a national set of safety measures applicable to allpatients and an emphasis that all safety data must be captured from patients. Clinicians mustalso start identifying characteristics of ideal standards that would aid in reporting tools anddata collection. "A future, unified health IT platform would eliminate disjointed data formatsthat result in confusing results and also would reduce duplication of measurement activitiesthat are burdensome to clinicians," concludes one report. Return to topTweets for Your ConsiderationA few tweets worth noting this week @DellHealth Dell Healthcare #DellWorld | Empowering #IT leaders w/the strategies & techniques to harness #IT efficiency and unlock #innovation http://bit.ly/otEwsS #HIT @Awarepoint Awarepoint Team Did you read this? Eight reasons to reduce #hospital bed volume (via @healthleaders) http://bit.ly/qUyBoO |#physician #healthreform #ACO @HuntingtonNews Huntington Hospital To keep required #insurance affordable, start with #cost http://ow.ly/6QHBQ #healthreform #medicare #Medicaid @GovHIT GHIT 6 tips for #HIE sustainability | #Healthcare IT News http://ow.ly/6QF2S Be sure to follow @DellHealth on Twitter for breaking Health IT and policy news. 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 - October 11, 2011

by Dell Washington Report

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