tv Key Capitol Hill Hearings CSPAN November 6, 2015 10:00pm-12:01am EST
how do you think mr. putin acquire this huge wealth? thank you, i'll take my answer off the air. >> guest: now i think the operating with very old news. it's way, way -- about $40 billion but the trick is that putins immense wealth and controls more money than any individual in the history of the human race but out connected to staying in power. he probably could move around something in the range of $1 trillion if you look at the russian reserve, russian budget, and the oligarch fortunes, most of them are connected to him and owe him everything they made through these state orders and ability to evade taxes in russia. so that's why for him walking away, keeping even part of this money, is actually possible.
this is a classical case of a dictator in the golden cage where he is all-powerful, mega reach, as long as his staying power, and walking away is really -- in case of putin it's probably -- >> host: you write about some of the corporate entities that go to russia and essentially are apologists for vladimir putin and the current regime. >> guest: the fact that corporations, whether americans or europeans, always look for profits and avoid human rights and domestic repression conducted by dictatorships. it's not new. i'm reading a book about the studios in nazi germany. for years have been selling
movies, titles and accepted in censorship, cutting lines and throwing some movies if not to propaganda, disprove them. so unfortunately it's a reality, and what is required is a very clear red line going by the government to what can be done, what should not be done, and unfortunately, all these economic -- about economic tools, call weapons, yet to be used. sanctions against putin's russia, in my view, are very mild. they're not helping oligarchs the way they -- they are not hurting the oligarchs the way they could the united states could impose real sanctions in russia even without the european allies, and by doing so, it could send a message, and not four -- for putin. we should stop trying just to
engage him. but the message to other people in russia, russian elite, russian oligarchs, moscow middle class, to recognize that following putin'ssal policies could -- suicidal policies could jeopardize their interests. there's no strategy. i would like people to understand that confronting putin today is vary dingous, very costly. he always takes delays, confessions, weaknesses, as indication of future aggression. in 1961, john kennedy said, we do not -- dedare not tempt our force with weakness,. >> host: john is calling from south hampton, pennsylvania, on the republican line.
>> caller: good morning. it's a pleasure speaking to you, mr. kasparov. i've been aware of your existence, you've been on the world stage a long time. and obviously initially was chess, and then it was politics, and i think you have a misperception about the united states. theirs enormous amount of hostility that-under elites have for putin and russia, treating him contemptuously and minimizing his strength and now doing the opposite, fearful he is going to invade nato, the pool tick states. if could, i have a couple comments and a question. if i could, you have to go back and -- i go back during the yeltsin era -- yeltsin was an
alcoholic and was a disaster. that's when the oligarchs grabbed the assets of the country, and the russian, ethnic russian grandmothers were begging in the streets and the oligarchs had their billions. they appointed putin. he came in and immediately i think he changed the situation. obviously it took time, but in the united states, our foreign policy -- we went into the middle east and because of the neoconservatives, which frankly, mr. kasparov of that's the only association i've seen of you, is being affiliated with the neoconservatives in the united states, but the neoconservatives promoted, encouraged, got us involved in the wars in the middle east. we have lost trillions of dollars. every done. >> john, john, it's on the table.
anything you want to respond to? >> guest: let's start with russia. you can look at the -- see how many billionaires, many dozens of billionaires are from russia on this list, and all of them are directly connected to putin. so russia is now the second place of the united states in this list. and for your information, you can go back and check that in the year 2000, when yeltsin left office there was no single russian billionaire on the list. i'm not here to discuss the details of economy in yeltsin's russia. it's not telling you about the strong flourishing democracy under yeltsin. i'm highlily critical but he built a feeble foundation for future change. now, put putin changed the situation for much worse. corruption under yeltsin was a problem. corruption under putin is the system and that's a big
difference. about the united states, you should read more about your own history. you can hear to the debates. nixon, kennedy, where jfk was far more hawkish than the republican candidate, of course, the doctrine of defending democracy and opposing communism is connected to the name of the greet president harry truman, who was a democrat, and who just did tremendous job by saving hundreds of millions of people from soviet expansionism, and today, again, it's not an agenda of one group or another. we can -- far left to far right, to bring america back home, and your claim about american losing trillions of dollars, it's a long story that would require lengthy debate, but at the end of the day, remember that american corporations are the most successful multinational corporations that have been
doing business elsewhere, and to pretend that america could walk away, ignoring the most important zones in the planet, and at the same time u.s. corporations will be making this tremendously profitable world, want you to understand the laws of physics at apply. power abhors vacuum. and in the case of the middle east, filled rapidly by putin, by islamic state and iranians. >> on tomorrow's "wall street wr guests are chris aidwards. then the growing trend of staffing schools with police officers. we'll be joined by charla shed
d. washington journal, live on c-span every morning at 7:00 a.m. eastern. >> this weekend on c-span's cities tour, along with the comcast cable partners we'll explore the history and lit larry arrive of sacramento. on booktv, author sato shares the story of her japanese-american families survive ol' the depression, being swept off to internment camps and bigotry in her book, dan lillyon -- dandy lyon -- dandy lion, and meet with author -- to discuss the book, none wounded, none mussing, all dead. a biography of elizabeth bacon custer who life was full of adventure, tapped, and determination recreate the image of her husband, general george
armstrong custer. >> elizabeth was the first to come to george's defense and saying threat not what happened. i know my george. he wouldn't have done that. and she stood up for him, so i was her voice that rows to the top not only because she was a woman and people were page attention to what she side, but because she outlived them. she doesn't die until 1933 and he is, therefore, the 50th 50th anniversary of the battle of little bighorn. she there is for all of history, so she can help shape what is being said about her husband. so it doesn't go so far to the other end. >> on american history tv, we'll tour the mansion once owned by
california gov and railroad tycoon leyland stanford. at a pro union civil war governor and railroad executive he negotiated deal tet mansion that helped complete the transcontinental railroad. >> mr. stanford was our last two--year term government. elected and served all of 1862 and all of 1863, and he was part of a group of men who were merchants and they were politically active and had similar ideas, and stanford was their first candidate that was successfully elected as governor. she was our eighth governor and the first republican governor of california. >> then we'll visit the japanese-american archival selection at sacramento state university, which includes letters, photographs, diaries, and artwork from japanese-american communities following the attack on pearl harbor. and sacramento city historian marsha eyeman shares insight and
artifacts relate teed the 1849 got rush which brought 300,000 people to california. >> today wore in the center for sacramento history and we hold the original record for the city and county of sacramento and go from the beginnings of the city in 1850 up to present time. when you talk about the whole experience of coming to california, to search for gold, you need your supplies, you probably would have gone and had your portrait taken in order to document yourself before your downy, but one of the important things you would have acquired once you got here was a map, and this is a great map of the gold fields. this map would have folded up so they could fit it into their pocket. everything was lightweight, compact,ese to travel with. this was an essential tool and this dates from 1849 to show miners where to go. you can see huh quick he the business of mining the miners and producing all of these things and people were quickly making money off of the people
who were looking for gold. >> this weekend, watch c-span cities tour in sacramento, beginning saturday at noon eastern on c-span 2's booktv, and sunday afternoon at 2:00 on american history tv, on c-span3. the c-span cities tour, working with our cable affiliates and visiting cities across the country. >> next, healthcare professionals and policy experts discuss the u.s. healthcare system and ways to reduce costs. this for you. took place on capitol hit. hosted by the national institute for healthcare management foundation, and runs just over two hours. >> good afternoon. i'm nancy, whichley, chairman and ceo of the foundation and i'm delighted to welcome you today to our briefing on transforming health care to drive value.
we have an exceptional page of speak -- panel of speakers. they're all on at the forefront of driving -- the way we deliver care, consume car, and pay for care. copy of their presentations will be posted on our web site, after the program. we have an impressive audience and want to invite you into the discussion as well. so at the conclusion of all of the speaker's presentations, if you want to fill out the blue card in your folder and hand them off, we'll be looking for them and bringing them up here so you can address the speakers. the first speaker is well known to all of you, dr. patrick conway. he is someone who has a lot of titles. he is the deputy principal administrator, the deputy administrator of innovation and quality, and the chief medical officer of cms.
dr. conway is responsible for overseaing and improving the program that serves millions of americans who access health care through medicare, medicaid, chip, and the marketplace, also known as the exchanges. he personifies excellence in public service, brings a unique background as a physician, a strategy consultant and a researcher to his position. and he brings a talent, real talent for problem solving and a tremendous passion for finding and increasing the quality and value of the healthcare system. he has received the secretary's highest award for distinguished service, and with that, let's welcome pat conway. [applause] >> thank you, nancy, i all apologize, i am stoic my voice is a little odd and i have to leave after i talk. i try not to do that but was
told i need be back in baltimore for some things. so, i -- i've been chief medical officer for five years, cms is like dog years to feels like 35. and true story. when our our communication folks the other day said patrick you need a new picture. you look older then when you started. i went home and asked my wife, die need a new picture? she said, yes. so, i will move threw the slides relatively quickly if i can. hmm. perfect. and i'll adhere to the time limit. so if you think.the affordable care act, three major changes, one, insurance coverage were at the lowest insurance rate in roared history for the united states, another set of data come out yesterday and we'll talk about that today. i will talk about health system
tropes formation, delivery system reform, focus thing coasts and quality of care. next slide. this just shows a cbo estimate from 2010 and then looking again at 2015, predicted over $20 billion in cost savings from reduced medical trends. both our own actuary and independent analyses now saying that a portion of this change is due to structural changes in the system and delivery system reform. if you go to the next slide, this is from harlan, who is a hard-core health services researcher. you don't have those people say jaw-dropping results in "the new york times." just to call out a few results from a study over 68 million beneficiaries, reductions and n mortality from 1999 to 2013, this is also testing me itch don't have my glasses on so this will test to see if i have my
slides memorized. reduction mortality, reduction in hospitalizations at a population level so less medicare by-riz being hospitalized even as the population ages and becomes more frail. reduction in cost for inpatient admissions and reduction of hospitalizations in the last six months of life. not on this slide, our own quality measures for cms. over 59% of the measures improved significantly over the last three year so significant improvements in quality across the u.s. next slide. thank you. this just -- we'll test to see if i have to look it's -- our frame for delivery system reform. we talk about incentives, both privateer and consumers, value based purchasing, alternative pavement models and care delivery, true population health management and also engagement of patients in their care
through shared decisionmaking and other means, and then we talk about information, which is transparency about quality and costs of care, but also the right information at the point of care. i'm still a practiceing precision, take caring of children with multiple chronic conditions and that information at the point of care is critically important. next slide. this is a payment framework. you do not need to memorize but was published 18 months ago now. four categories of payment alines with a lot of the private sector folks you'll have for item and from a payment framework released from our learning in action network. category one, fee for a service not link to call the or cast. category two, fee for service with a link to quality or cost. classic example is hospital based purchasing. category three, alternative payment model built on fee for service, like bundled payments and then category 4, true population based payment to a provider. these are all provider -- youle
hear from private payers and others how they're also moving to value based payment. next slide. this president and the secretary announced in january of 2015 specific goals for alternative payment models. this is category three and four, where the provider is accountable for quality and cost of care. 50% by the end of 2018. we settling thing goal for the federal government but we want private sector actors, which you'll hear from today to move in the same direction, private payers, provide efforts, consumers, purchaser groups, employers, et cetera. the second goal was value based payment. at least 85% linked to value by the end of 2016 and 90% by the end of 2018. we're on track to meet those 2016 goals. we also launched the healthcare payment learning in action network to really partner with
the private sector to achieve the goals we have agent eighth of the continue largest pairs, cma and the private payers, over 80% of the population, over 25 states engamed. large employers, over a thousand provider groups. we have a summit that had people representing a huge portion of the u.s. population, really driving to achieve these goals. so if you look the next slide. this is graphically shows the goals. the dark blue -- in 2011 we had zero percent in medicare in alternative pavement model. 20% at the end of 2014, and continue to grow so just graphically shows you the shift you're seeing in payment in the u.s. the last thing i'll say here, my seven-year-old son has this stat memorized. cms spends approximately a trim dollars a year across all proms. more than $2.5 million a day-more than 100 million an hour. so in the course of this
two-hour discussion, 200 million plus. our goal is how do you spend the dollar alleges wisely as possible? how do you partner and catalyze change that improves quality of care for people developed and generates healthier people for our country and it's smarter spending. on the next slide, this just shows our value based payment program. key point here in the middle box, you seek hospitals right now have eight% of payment via readmission and other value based purchasing programs tied to quality and value, physicians and clinicians nine percent for large groups, seven percent some smaller groups. it's a significant amount of payment tied to the quality of care delivered do beneficiaries. on the next slide, i'm now go to out of the innovation center, so started leading innovation center two and a half years ago, as you know, ten billion over ten years to catalyze new payment and service delivery models to improve quality and lower costs.
this lists all of our mother-in-law -- major models. on the next slide, on the accountable care organizations, we have more than 400acos in the medicare shared savings program, almost 8 million beneficiaries in 49 states plus puerto rico, and with our medicare shared savings rules and we're work only another set of rules right now, some of the benchmarking issues which we said publicly we're looking to improve this program over time. i'll talk about some of the results. the other important note here, if you think about medicare, 2% growing in medicare advantage. 20-plus percent in alternative pavement models. you already have a minority of medicare in what was traditional fee for service, and even within free true additional fee for service the vast majority of payments was a link to quality and cost. on the next slide, this is our pioneer aco result. first mod toll be certified be
the actuary improves quality and lowers costs and we built into the medicare shared savings the learnings from pioneer. the other learning from pioneer, generally people can go in or out of. pioneer, first model out of cmi so i think at that point we were at a different stage. people could only exit. so by definition, the numbers are going to go down over time. every time one exits, it gets a lot of press. we tried to explain this. i've given up trying to explain it well. i'll talk about a next generation model which we think a number of these organizations now are decidings, do they go into track three or stay in pioneer or move to next generation aco. the key opinion is we want an array of payment models that immediate providers where they are and we have a principal that providers should have choices around the pavement models as long as we're all driving to improve quality and lower costs.
dramatic improvement inside quality and patient experience and over $400 million in colls savings. so, successful model that met the bar in lowering and costs. we think there's some key attribute smears got a robust interest. we hope to announce the select entities soon. prospective attributions. know your population. full cappitiation, and you can choose a lower amount. patients, select their aco. voluntary app attribution, the patients says this is my accountable care organization, and then things happen like rebate tooth the beneficiary to stay within network and also enhanced care coordination service it because the provider knows they're part of the network, waivers, think things like telehealth. smoother cash flow and a benchmarking mechanism no longer
just historical. actually looks more similar to mid care advantage where you're looking at regional benchmarking approaches. so, on the next slide, this just shows primary carry initiative. i grew up in a small town in texas but i learned how to talk fast. i don't want too take any of the other people's time. so, this is our -- one of our primary care models. partnering with private payers so in seven states and regions, medicaid, medicare, and private payers. coming to the table. we agreed on 13 quality measures, exactly the same. we all are putting in per member ex-per month population bailed payments and ask the provider another decrease total cost of care. first two year results, one year on the slide. dedecreesed hospitalizations, decreased e.r. visits, high level of quality of care, and i think we are in the evaluation
modes for this one but trending in right direction in a positive way and what the future primary care will look like. on the next slide, think an net domestics brings it home. one of the practices, rural, southeast arkansas, they've got teams, four physicians, nurse practitioners, care managers use, the funding to get pharmacists support, social work support, et cetera, using electronic health records to steer patients, using telehealth to monitor patients remotely, doing home visits for frail elderly. the leader of this practice set a few key things. first our patients love it. they don't know all the detail another the finances behind it but they love it. they get called at home. get their medications managed. a clinician sees them in the nursing home they love it. second, i've been in family practice for over 30 years and finally practicing then way i want to. and third, i never would have done this -- all the payers nut
a million dollars in this practice year one, and population payments. they brought down total cost of care 3 million. this investment would have mortgages his house five times over. so i think there's a key lesson here that we need to scale spread but when you invest smartly, set the outcomes you want for patients, for physician, clinician teams can work with patients and i have to the results we want. on the next slide, state inknow vacation work, we have now got 38 states and territories where we said we want you to achieve better care, smarter pending, healthier people, flexible how to get there. we think there's some key components like population health, payment models, work force and flexibility. we have 17 what we call test states and 21 design states and territories. test states are implementing changes. a few examples, arkansas private payer, redesire primary care.
they have baseball insold that is medicaid mothers through one year most natal. a bundle payment with you invest in prenatal care you decrease preliminary indications and are showing results. minnesota is doing accountable health communities, linking the social and public health -- public sector with the clinical care delivery system, vermont is work only all payer aco type concepts, oregon with coordinated care organization. so, really exciting to see the state and local change driven by these models. on the next slide...
clinician's across all 50 states. to lower cost and improve population in health management. on the next slide the news like decrease seeing hospitalization or increasing appropriate use of care and similar to demonstrate savings. traditionally to run a a model on a number of years to contemplate to monitor the data monthly and we adjust them.
our payment model has been adjusted multiple times. it was a key fundamental tenet to talk about on a college-age or in france to work under way. with beneficiaries for the first time ever to be at the same time as curative care services to improve quality of care and patient experienced and lead to a more efficient health system. so what can we collectively you do together? focus on better care and healthier spending for the population and that you serve to invest in the
quality and data infrastructure to focus on transparency. those plans are a major driver to positive change we want to have a culture of collaboration, a partnership and improvement. it is a three-year journey. but they pursue rubio, banks for having me here today and for listening. [applause] >> you could see the whole range of things they're doing it duse incredible.
well done. now we will hear from andrew one of the most innovative not-for-profit plans in the country. and now widely adopted quality contracts. a key contributor to the successful launch of the of health reform plan. and of last health care reform optimist. to drive positive change in the state of massachusetts. >> they give florida state this event today.
i will share time to speak more slowly. [laughter] you heard about go work with the delivery and this is a reform. if by doing bad and we have doing that we have rigorously studied a model in the nation and actually around the world that they try to think of payment reform. with those coverage reforms that health insurance levels are a the highest in the nation.
in the time it where is hard to ruth talk about. and the result of a architect just do delay because for decades those in the country the progress was held hostage and said the cannot extend coverage so coverage was never expanded. so after the law was passed massachusetts started to turn their attention with that powerful item that we had was the paper co to say
you already are so far ahead but we are behind it could be the most expensive place to deliver health care in the nation. so bad lacrosse's and what could we do is the largest commercial paper in the state to lower cost and improve quality? this is also a time when a patient safety and quality improvement was eating women time so what we want to do is designed a payments system to approve quality and lower cost. so we hired a consultant.
[laughter] tuesday's coordination with the most effective pavement model to come back with the 250 page report to say there is no such model. very disappointing so we had to invent one ourselves. >> we put them in the remand we called it the cave. and here is what they came up with. we decided we had to move away from the system and not pay for the health but as the primary-care practice to successfully manage a
chronic illness was kept out of the hospital. if there were not doing a good job we paid them more isn't that backwards too wanted to change that so we started to establish a budget based on all medical services, medical care prescription drugs, a shared risk model you have to be on the decline being trend for pro 64 daschle a recognize quality measures validated and to also try to disrupt that adversarial relationship where every
area you have a negotiation let's go where rework together so we had a few pioneering plans to table in with groups and over time it is now the standard way to pay for care that now is the standard care. what happened to read 2011 that was such of big jump for word? pyrrole leaders of massachusetts i will talk about results as the quality
is that this is the principal way to contract and not require you to do this. to keep the fee-for-service pavement's extremely low. and on the front page of the major daily newspaper but although i did not intend it this way that there are other in their mental factors as well. as the fever system became less attractive the budget system became more attractive. this program we want to change the name because with a big success it would have
been called blue innovation or blue skies. but it is too late. but the acrid and had already stock it was called the 8qc and is now around the country. but it is the most regulus -- rigorous so a team of researchers had been publishing results on a the aqc annually and consistently if now increases quality in all types of provider groups are succeeding. academic community and the practices that serve low in kong vulnerable populations to meet the targets these
results published luck -- last october in the early years of the studies we have a classic controlled experiment those in the aqc and those that were not as so many were in we had to compare them to other groups outside of massachusetts and by number for compared to the control medical claims spending was a full 10% lower. a similar story of dramatic changes. researchers observed over a number of different domains and there are to hear, while national numbers stagnated stagnated, our physician practices improved dramatically. some of the aqc group's nine
out of 10 diabetics the proposals under control the national average is 70%. that was the early results but when it looked at our products about half of the members are with hmo put the rest is pp of the most dominant form of insurance through the country but weaver getting questions from other plants including the government with the hmo population when they enroll have to choose a primary-care physician. so we spent two years back studying the problem now we come up with a solution and we announced earlier they were expanding its now those
covering to produce 50,000 -- 250,000 are joining the new model. so the you receive the call that the doctor laid out 40% of payments nationally in this alternative model. we're already there in massachusetts 40 percent are under the new models. what have we learned? obviously before i get to the use you have heard about physician leadership, a change of culture having meaningful financial impact impact, and a long-term investment but i will focus on learning and support. how are we supporting our position to be successful?
and what that does to the changing role of health plans like mine. the issue the doctor talked about that is a big barrier i will tell you how we did that then finally how we change the model over time. the first test to do with support we provide our physicians with daily, weekly, monthly, quar terly, a newly reports of other patients are bearing your patient was admitting last night and you may not know that to very detailed statistics about care patterns from a chronic illness, hospitalization, th ese reports have been designed in collaboration
with physicians and they are using them extensively to change care as a result. but it turns out there is a great desire of shared learning so regularly convened groups of our position and practices together you may recognize the noted author and colleague of mine talking about and of life care how that could be improved improved, separate groups medical managers that come together to share learning experiences in and can call their own physician and leaders for communication and support. these payment models have grown and flowered so well those of the system were excited about that. this is a strength of the
blue network nationally so now we have reforms or others around the country putting together a national network of paved reforms. what does this do to plans and providers? most of you know, in the '80s and '90s health plans like ours have intensive care in disease management capabilities because of the delivery system of patients were not getting the connections or the care that they needed on a population health basis they now take accountability for that management so should a nurse stationed be calling patients to remind them
about appointments or talk about relevance? or should that be more logically placed inside the practice themselves? we are working that out. this evolution will change the world. on the issue of retribution i know some of you are policy experts but this is the key question that seems tactical but if reform can working physicians feel they're held accountable for the right population progress remove from hmo where patients choose primary care doctor and their ppi product we have to develop the way to attribute numbers to accountable groups to work with physicians and other local health plans to improve accuracy and then we did
important things. the agreement to physicians to say are the use your positions? that is an important way to validate the model. to give them confidence when we start paying on of budgeted way of population health for members have not chosen a primary-care physician to say these are their patients. but to sustain a model over time we had one interesting innovation to use each quality measure to drive their share of risk so better quality scores they meant there would repay a smaller share of the cost overruns or fake to keep a
larger share of the savings so often the efficiency incentives and quality incentives are separated but we could join them together that innovation has been well-received. you also hear reagan of a about the cacophony of measures that are out there for quality. we have been very focused to narrow those measures from 64 down at 50 and also the next generation once that we are very separate -- excited in the next model our patients reported outcome measures their own experience their functional status, power they doing emotional health to be rewarding position and practices of some of those measures that patient's care the most about.
we wanted to have a learning culture so now we have six or seven years' experience to read know what is working but we know we can get better so we created a model that is flexible to continue to innovate we now have a powerful chassis of collaboration of better performance, higher quality, lower cost in a way that works for patients and caregivers. thank you very much. [applause] >> para neck speaker is chairman and c0 of florida blue he leads a family of four were thinking companies
including the state's largest health plans are being 7 million and provides medicare payment services to 12 other states. is leading the transformation from an insurance company to grow this company with a strong focus on health and wellness and prevention for girl improving quality and value and serves as the chairman. [applause] >> thank you cheer everyone for putting this forum together. doing an outstanding job about payments i will spend some time talking how payment reform falls into the broader picture of changing the health and health care system in the
country because if you step back, looking at the question in front of us as a nation. i don't believe it is a political statement but i believe something we're passionate about that all americans i don't think it is a political statement of where we should be as a country purpleheart we get there is the debate but at the beginning of a health care reform discussion we talk to reforming the delivery system, outpatient access care, insurance and the debate got narrower as the discussion moved for were due to political factors but let me take you back to a broader picture. our company is a $12 billion operation handling people in
florida also medicare payments that is $108 billion of medicare payments in that business unit alone so we have a tremendous amount of data to understand what is happening in the system. as restructured our organization the blue cross blue shield in the state of florida is florida blue robo we created three other one is guide roll hall where read to direct delivery of health care and own a variety of health care assets. died well connect is reduce the retail business to focus on the consumer how we have delivered health care in the nation and the delivery system because the convenience was to doctor or
hospital or somebody other than the patient we are big power to be transformed them to be responsive and guidewell source is the medicare payments that is of a company is structured so we look at the old world and fee-for-service medicine designed for volume the more you do the more you get that is the system we have generated therefore we have much overuse and a lot of spending that is a necessary. to date the new world has much more pavement alignment and a system that is focused how to utilize the data that we have, the technology, and we look toward the future growth as your truly
innovative with partners as we spend more time on what should one organization do versus another? there's a lot of redundant activity and how to refocus on population hall? and more about how do we work together to drive for better results for the people we serve? >> we think about this and much more holistic way how we use data and of the technology to drive through accountable organizations and we have a variety of those across the state of florida. i understand now refocus around the'' -- the twin cities of florida is a whole other story.
you know, miami and jacksonville or to defer universe. [laughter] tampa and orlando are very different places so we have at least five regions that don't act like each other with a different ethnic makeup different history and delivery system on the ground which means we have to be very sensitive to the geographic, cultural, a background needs so our delivery model varies all over the state depending are rarely deliver the service. fisker issue the generation of things we think about like how to use virtual care. they talk about televisit with the fee-for-service that could mean someone
could spend a lot of visits because they have access through the telephone now so you have to be in the world of payment reform for that to make sense so to create efficiency it needs to replace the visit in the office but only because historic feat that is rather provider was paid so you wanted the service you came to the office. we say think about where our kids will be we have the privilege to go to the doctor's office to wait them the exam room to wait to. may be having that comfortable sealock to sit on the cold table and to see the physician to get a
written prescription they have to go to the pharmacy to wait. our kids will not accept that. because everything happens on your smart phones so why should medicine me any different? we talk about most medical happenings will be on the phone with the doctor that transmits your bridles you have the visit they go to the pharmaceutical prescription that you pick up your convenience because the system is built around you and not the delivery system more will happen that way and. paper co talking wrote the different regions of the state's, we literally have what is going on the same geography with differences
because the system is so large and fragmented it will not consolidate overnight but insteps. primary-care alignment replacing with hospitals intermediate bubbles of care and to looking at a variety of ways to deliver care. we have the first model that is the firm of south america we believe the first time u.s. company contract with the non u.s. firm to deliver health care in the united states. think about south florida. increasingly people from south america have landed on our shores living in south florida. this is what they know very
well precontracted with them to deliver medical clinics. they're building seven more over the next 18 months. culturally significant and sensitive in the community the first is 80% hispanic population everyone speaks spanish. a clinic belt with the understanding the family matters greatly in that culture and often they come to the clinic together. rebuilt waiting areas that facilitate that and one-stop shopping thinking of primary care, emergency care mammograms, mri or specialty services solemn place because in south america there used to getting all care in one place a lot of
people from other cultures will like the idea of one-stop shopping everything in a single place? and you see the doctor in 60 minutes from when you enter the state -- the site. if you need follow-up care retry to do that immediately it is dramatically different care. remember the patient a different way to think about care. we are excited about the clinics and they have been warmly received. the next one is guidewell emergency medical. why would reduce that? is the emergency place - - room the place you really want to get your care? honestly?
[laughter] they are not built around a patient, do not deliver for the patient, of so we built across the street from the hospital because it is admitting multiple of the number of the people that should have been following very rich in zero visits many consider it a front door to the hospital and as a way to fill the beds. many people should not be filling those beds but get the care they need, but quickly, high quality and going home. we created this facility to do just that and it is resonating parts of the patients a quality care, well delivered, a creek and i am satisfied. we're disrupting what the hospitals are doing by putting the facilities in place.
to allied health care eight organization if you follow there is an organization that did a very, very good out reach model and sold their organization and now is the alignment health care we have created contracts with them to take care of the chronically ill patients in concert with primary-care physicians. if you're running back practice with chronically ill all seniors you work in concert because of the intensity and obeys folks are very oriented to a that ended is a partnership model so we will do a better job for our seniors. when you look at the size of the state of florida towards
being a 20 million population we're already the third largest date in the nation we have to do more to reduce debt to patients centered homes 700,000 patients today are taken care of in the alternative care model so we're on the path to the targets laid out a short while ago. retail centers. think of the insurance plan or insurance company, for a minute suspend her you think of the insurance company. we said we will make it a
health solutions company and one calling card is the retail center look at this facility we have 18 of these across the state of florida. so what happens? think of the affordable care act you can buy individual insurance but you could also walk in with your claim that has not been resolved and we will resolve that. people say insurance companies are hard to get a hold of the we put ourselves on the front line to walk again to resolve this face-to-face. we will teach you how to use the online tools people assume and then they think the customer will know how to use it even sophisticated people say can you teach me?
we will walk you through so know before you go you can go online to see what the service cost, and know what is service cost, and know what is covered and how much your piece will be purple one of the great questions is daiwa to know in advance my responsibility. we teach you how to do that. the next is care consultants. held the role this programs that are tailored to the individual through consultation through the things you should be emphasizing 71 of those entities could be used. last year 350,000 unique number of visits. before an insurance company building on the skyline but
now we in gauge our members each and every day. customer satisfaction is 92% that is the number to think about what your insurance company? go to care consultants, 97% satisfaction. last year the blue cross blue shield association award for the highest number retention level in the nation because they either have encountered the space are has contacted us face to face or they know that they can. we also talk to the mayor and the civic leaders in each community to say what would you like this to be to serve your community? read your reading program in
orlando literally a of letters -- literacy program the kids come and to leave with a backpack flooded love books and but that is another issue. have a need it to engage to see the hero's read to them. >> you get yourself with the help solutions company. >> yes there are financial model. >> yes there is the head minister did focus that is all captured on this slide but help is much bigger than health care or being engaged
with people proactively to talk about staying healthy in the first place and what drives that is literacy, the ability to go to a school that has a gm program we advocate for those because our mission of help as much broader than the payment on the back and. so we have been a partner outside of orlando. funding partners were johnson & johnson, a ge medical, florida a blue guidewell as the founding partners. this is to now has the
innovation center. >> newt to defend the ability to work, are prayerfully and a dash of the expense to the marketplace and to convene discussions around the issues like how to resolve the primary care shortage? integrated teams can make that happen but what are the best models? one of the things we know when rigo to tallahassee they have a huge agenda and how can they possibly know enough and route we will be doing as we convene we will bring legislators to the forum to learn about the
issues in greater detail. >> so we see our mission as broad, a huge stakeholder to drive the system to change the quality and innovation. [applause] >> that was very inspiring to think about. and try to find the solutions to get us there. now we will turn chiru who who has just returned from his honeymoon of weapon interesting background includes medicine and finance. a leading conservative change agent and is sought
after presidential campaign an adviser in praising marco rubio as previously a vice mitt romney and rick perry a principal author of the apothecary, a frequent commentator on numerous television shows. [applause] >> i really enjoyed what they had to say it is inspiring to see with people focused on improving quality and delivery of care. has ben difficult to prove but the a great work that both of your doing. but i will talk about a
different issue of the high price prescription drugs. this has spent a concern for decades and what i want to to argue today one of the challenges it is seen as ideological or partisan issue and i say it shouldn't be it is important for both parties to put their heads together to think about ways to tackle this problem it has been difficult to prove expanding coverage improves health but innovation and prescription drugs does. just book of the cholesterol lowering drugs to reduce evidence of a heart attack at a fraction of what we
spend on conventional health coverage. the more we can do to expand at an affordable price makes a huge difference to the access to quality health care and i should make the disclosure i am revising senator rubio but please do not associate these views with the senator he would get very mad at me. [laughter] there are too over simplifications that have dominated the debate about prescription in drug pricing in the united states. the first is it is all about
greed because of for-profit companies are greedy and they are exploiting the fact we don't have price controls were other government measures to prevent profiteering and the poster child for this right now the ceo as recently profiled for increasing the price of an old drug used to treat toxoplasmosis. but here is what is important to think about if he is the reason why they're so expensive than car companies are it theoretically a greedy. so what makes them lessor board banned drug companies? why don't we need price controls? widow seemed to be a battle there just as motivated as
any other drug company. why have price is gone up so much? or are there other economic factors that play? >> it is important to understand we talk about the last full months but the new treatment for hepatitis c you can see the dark blue band is the increase the prescription in drug spending last year due to new drugs mostly multiple sclerosis and the price increases for the drug is already on the market often five-to-10 years. and that is a bigger driver
in the new innovative drugs. it is the older ones where they choose to air charge more but the example is egregious and exceptional but a very common practice for drug companies to raise the prices that have been on the market for many years. the other theory is that innovation is expensive and why we have to charge will be charged. mark sector berg is laughing at that theory because his product doesn't cost anything to use it as a user. google search engine cost nothing to use it on say i have to charge to $1,000 otherwise i cannot find innovation. you'll never hear a google
or facebook to say that so why isn't that pharmaceutical companies argue that high prices are necessary for innovation? in fact, in most sectors it is low prices that drive innovation. the whole point is that hot most innovation happens at the bottom of the japanese car companies came here they did not compete for the luxury market but the most affordable car like the honda. as they would gain market share they would move up now they make acura and did the idea of the lexus but first they found out to deliver the high quality car at the low price then moved up
after that. so that isn't happening as much in pharmaceuticals. take another case. you could say it is software, internet companies were if that is different. what about apple? they cost more and evolved over time. so volved over time. so is hard to believe that the first was only eight to years ago then added 320 by 480 screen and it cost $599.
the most recent premiere was launched with 128 gigs of memory so 16 times the amount of 13 and a half times the resolution and cost 27% less than the original. what was the last time you heard of a new drug that costs 27% less than of the standard of care? by that standard is has failed to deliver value and innovation at a scale we receive from their retail technology industry. hearing is an example.
and peter is discussing the evolution a truly innovative drug that was the harbinger that we now experience party in a that targets the molecular defect and cares leukemia. at the end of the of life it more than doubled when it was charging when it was launched despite the fact to other similar drugs launched over that timeframe including a drug that was
manufactured. historically there will say i will raise their price of my older drug to meet the new drug less-expensive so the insurers have the incentive to move the people of the older drug then if that goes off everybody is on the new drug and companies have been using that technique to extend the life of their franchises. it is perfectly legal and insurance companies are going along with that but that is the reason why you see the older drugs go up over time if apple said the i pawed from 2,001 they will charge to a half times for that today and 2001? we would think they were crazy but this is what
happens in the pharmaceutical industry. this isn't because of greed or innovation actually because federal policy has distorted the way we pay for it used prescription drugs in such a way that those don't apply to prescription and drugs. the most important thing 2.0 is this isn't a matter of affordability for people who need them. misspent $2 trillion a year in government spending and the big part is we subsidize the cost of health coverage through medicaid a andretti
care program but also to the tax exclusion the value of which is just as large on medicaid or medicare so if you include the lost revenue from the employer tax exclusion and add that to medicare and medicaid we're talking about $2 trillion of subsidies every year. is it any surprise that providers charge a lot no ring the consumer comes from those consumers? i have simplified their data health care and everything else. the blue bar is defense, or
bridges to know where, unemployment benefits , their bread is health care. and their rubio a significant crisis their prescription and drugs are a part of that and it can be avoided. so the point i want to make is better is the assumption is that you shouldn't mess with the way we pay for prescription and drugs in america today it is buying is a free-market capitalist system but it is not it is not a free-market system with a 10 year old drug costs to and a half more than it did 15 years ago when it doesn't increase the
value to the patient. free markets work by delivering better product and a lower price with more quality overtime and and we should be holding the pharmaceutical companies to that standard one of the biggest reasons don't have a free market today is retold pay for this stuff directly is the biggest driver because consumers want affordable product and they demand it it is not they don't buy it companies have a huge economic incentive to deliver those products at a lower price point with more quality. what we don't talk about is a regulatory mandate that is the president for the health care system the aca requires
obvious that the clinical value is there. where it is, great, but it is not always. the 2nd very, very important area is that it is extremely difficult to develop innovative new drugs. the fda has gradually layered on more and more requirements to the point where it now costs an average of $2.6 billion to watch in a drug if you incorporate all the times drugs failed and development for every one that succeeds. there is also is also the
fact that of course, there are patents. the patent extends typically on average about ten years. it does mean there is a monopoly and that can be a barrier to competition because it is otherwise so difficult to develop. when the free market is allowed to work it actually works very well. one thing we don't spend enough time thinking about and talking about is the fact that for all of the complaints about the high price of branded prescription drugs, the united states leads the world and the percentage of prescriptions that are actually generic because of a visionary law passed in 1984 right representative waxman senator hatch drug companies in the united states have much broader
access to the patient pool once a drug goes off. cholesterol drugs went off patent.patent. generic drugs came in and took over that market at a fraction of the cost. it cost less to manufacture most generic drugs and it does a bottle of water or can of coke. that is a major driver of value our system compared to our european countries. the idea of substituting their products for older branding drugs is much more restricted by regulation. today 90 percent of all prescriptions in the us upper inexpensive generic drugs. it is importantit is important to understand in context, while we are concerned about the high price of branded drugs the price of generic drugs is very low and there is a lot more success in the united states for that issue. and insurance companies are getting smaller about -- getting smarter about delivering generic drugs to patients by steering them --
steering them to cost effective drugs. so what can we do to improve where we are? as you know, hillary clinton has performed -- proposed drug pricing to tackle this problem. her proposal would make the problem worse in a lot of ways. it was further subsidize the insurance coverage of pharmaceuticals in a way that would leave drug companies this accountable for the economic value of their drug. it was shortened the patent life of pharmaceuticals in a way that will make it harder to develop innovative new drugs, and some of the things like importing drugs in canada won't have much of an effect because it's 110th the size of the us plan drug companies are much more sophisticated now and restricting a majority of those countries that you can't import drugs.
so even if you could, it would not have that much impact on the us market. and importantly, she did nothing on fda reform, which is one of the principal problems that drives up the cost of healthcare come and nothing on regulatory reform which outside of fda reform is extremely important problem. so what can we do to actually solve this problem? it is simple. let's do more to reduce the barriers to entry for knew computers, competitors, reform the fda we have as you know in the house. that is a modest but good step to actually removing some of the barriers, the competitive entrance and disease areas. we can level the playing field between branded drugs with patents and insurance companies. today insurance companies are barred by regulation from mending together to negotiate with drug companies. private insurers. if you don't have my drugs, but this guy does, you will lose your patients so they feel pressure to cover drug when the economic value is
not there. that companies band together and you would get a much more economically rational result and can do more to allow people to shop for their own health coverage because that gives health plans more of an incentive to rationalize there drug form not just with drugs but with doctors and hospitals, two to deliver that insurance product at a cock to come in a cost-effective way which will lead to all sorts of downstream effects of plan design innovation and better value for patients. if you want to hear more about my thoughts on this you can download these various documents and with that i thank you for your time and look forward to your questions. [applause] >> well, that was thought-provoking. just to be clear, we take no positions on the election or any of these items. we like to have different perspectives in the room,
and that was excellent and thought-provoking and now we are going to hear from hoover reinhardt who may have some different ideas. again,ideas. again, we like to have all of the ideas out there. so now it is my pleasure to introduce the james madison professor of political economy at princeton university. he is recognized as one of the nation's leading authorities on health care economics. he has served on numerous prestigious commissions, advisory boards, and editorial boards, and you can see more about his background in the packet if you look at his biography. he is a prolific author and original thinker with prolific author and original thinker with a gift of making rigorous, complex, economic analysis accessible to students and all of us here. he informs public policy and public speaker and blogger for the new york times, forbes, andtimes, forbes, and gemma. talk about a wide range of
outlets there. he is the longest-serving advisory board member, and i have had had the pleasure of working with them for over 22 years. it is a warm welcome that i offer. [applause] >> thank you for this warm introduction. sheila says she likes to have stuck in the garden party. i said, that is why god created me. my slides up? i can see them. this. okay. so if you think about innovation and health care, there are two areas. one is biomedical research, the one that was just being discussed, and the other i would call operations research. every industry have -- has not. health services research which is aimed at improving the efficiency and patient safety with which healthcare
is delivered, including drugs, and these are quite different areas. on the biomedical side the advances have been breathtaking. even more breathtaking. we could have more. the viagra pill last 50 years, for example, or something like that, but the reason we are the leaders, and the us is the leader in this field, as we have great scientists, and if we do not grow them we import them. we have a flourishing venture capitol market such as no other country has, and every year we spend tons and tons of money on supporting this particular kind of research, both public money
and private even more so. when it comes to operations research, that is the stepchild, which is amazing to me, very few industries would spend close to 3 trillion a year and spend as little an operation research as we do in healthcare. as i said, the total federal spending on research and healthcare is about 50 billion. these numbers come from academy health switch. 2 billion is on health services research. .07 percent of total spending more for every $10,000 seven bucks on operations, not a lot.
so in general we have paid for this. many others, we spend a lot of money roughly with the exception of switzerland, twice as much as most other industrialized nations per capita, but everyone now agrees while american health care can be splendid, overall we don't get our money's worth. that is not generally agreed. so congress, i think, has allocated a pittance to operation research command i don't quite understand why that is. so theprivate sector has underinvested, too, but there is a theory of public goods. everyone in econ 101 knows it. if i spend money on something in the benefits
are a crew to others who did not spend money on it, i will underinvested in that activity. that does not mean private industry is evil. they just own up to the theories we teach in econ 101. [laughter] and it gets worse. it took us years to establish the agency for healthcare quality research. i was one of the actors trying to get that established to get operations research to get patient safety and quality and healthcare, and yet of recent there have been talks at some point to zero out the budget of that agency or at least to cut its budget drastically. i think it is penny wise and pound foolish to do that, and that agency gets about 400 million per year which is .016 or $8.60 for every
$10,000 national health spending. if you think that will solve the deficit problem that was being discussed,discussed, i have news for you, but that is really a shame. sometimes you get the impression as if congress is actually encouraging and efficiency or at least don't care about it, and they should care about it because healthcare is breaking the nations back. congress might pay some attention to the efficiency but also to patient safety. this morning at breakfast in the financial times i saw kilian ted said a revolution is underway in us medical service. when you have gray hair like me you have heard of these revolutions many, many times i have a slide that i decided not to use. it is a thing that you put on at these conferences
because i have heard this now for 30 years. i think that there will be progress, obviously, obviously,progress, obviously, and the use of it and all of the little startups, some of them will pay off, but the progress in this field will be much slower for a number of reasons. this i already said, i have heard microsoft and google and others nibble at the fringes of this per call but i have heard them for at least ten years command i have yet to see the major fruit of that coming. so the word is not revolution but evolution does not mean we should discourage it. what hurts wonderful presentations from massachusetts and for a
but there are other reasons also. very often the innovations in operations races on healthcare delivery change, they are disrupted. disruptive innovation as if it were a good thing. i'm the guy whose life gets disrupted. so therefore there is going to be resistance to a lot of these things command we should always remember one person's efficiency is another person's income loss that happens. and so i should wonder if k st. isk street is populated with people who devote there lives to perpetuating in efficiency and american health care because they are paid to do so. so for all those reasons. now let me say a few words. i obviously disagree.
first of all, i will agree with him, getting, getting a pharmaceutical product to market is more difficult than most people realize. you really have to run the gauntlet. i have a design. you start thinking of a theory of the compound which is preclinical and that it is phase i with a trying on humans to see if it is safe. phase ii they like and efficacy. in the 3rd phase is effectiveness meaning, if it were applied in practice one that actually be effective? and then make an application for approval which takes
many months and sometimes years and finally a drug succeeds. but at every stage the bulk of them die. it has been estimated at a 10,000 tries they get started, one or two make it to the end. so that must be understood. the dragon makes it all the cost of the failures, the dry holes in the auto industry that we had along the way we had to add to it the opportunity cost of the money, the finances that you sunk into it. to an economist that is is really cost. if i can earn x percent by putting my money into a high button this method in the drug development i must at
least get compensated for the money i didn't make putting my finances and some other things. so therefore the billion-dollar price tag, one can argue about it. many drugs has between one to 2 billion to develop. i believe that. that's easily demonstrated. so that much is true. the interesting thing is all one reason that drives healthcare cost is, we are extremely finicky when it comes to drugs drug and devices are help to a verya very excruciating standard, more in the us than other countries. remarkably when it comes to other areas of healthcare we see much more relaxed. this is 1999 when the
institute of medicine came out with a study that said anywhere between 50 to 100,000 patients die prematurely in american hospitals from avoidable error. imagine if a drug killed that many people? all hell would break loose. the latest study, 400,000 patients died every year from avoidable error. that's what it says. so i wish it weren't there. then for the drug industry the kills five people who
thing i don't understand i talked a little bit about the pricing. the pricing, because we're producing drawings of investor-owned companies with venture capitalists we tend to think of the pharmaceutical company as the quintessential examples of private enterprise. here is my view. that is the drug industry that sits in the protective hands of government way very few other industries can. what are the protections? not only the nih money or is
spent, but patents, market exclusivity, they can give you more years of market exclusivity, data exclusivity which means a generic company cannot use your data to do research. prohibition of resale of drugs among customers like we can go to canada with the drug, and there are other subsidies. it's a highly protective industry. and when you have that bird in the hand sometimes they want you to chirp a certain way. you better do that. price control will be very difficult. they really know that would
be complicated, but you could call for coming to that i want to say that the industry now talks about why you pricing. you know, our prices incidentally no one's prices, no industry price is ever set on cost. if it happens to be equal, that accidental, you don't price on cost. you price on what the market will bear. cars are that way, diet coke is that way, everything is that way. drugs are that way, too. they call it value pricing. the problem is, what is the value of a quality adjusted life that we could buy with
drugs? we don't know. is it a hundred thousand, 212 million? we are too shy to even discuss it. and the drug industry, they can then say let's just see how high it is. we never say no because the minute i say no and i know that is the maximum price i put on human life and i look like a fascist. so it's a very difficult thing to do. what could be done is when the price looks unreasonable on its face, not price control, but when it seems unreasonable to say, all right,say, all right, you can do this, but we will market exclusivity. we nibble away at this or data exclusivity or one of
theirother benefit and protection we give you build take away. that is not price control it simply says if you are to unreasonable with your price , then we have these other methods. and i want to give credit to lyn mikel zeroed in the paper before i thought of it, so he should get the credit. there is, ofis, of course, the question, we want to reward risk-taking in america. drug company investors take risks, thererisks, there is no question about it. the right amount of risk premium we want to pay investors and pharmaceutical enterprises, the amount that would give us the right flow, the desired flow renovation. that is what we would like to do. in real life that is hard to do. i was sort of thinking
loosely, as i sometimes do. other people who take risks, firefighters, police, the military. they take enormous risk. what risk to be give them for that as a benchmark? and then say, well, what do you need to do something for america, something good? these guys fight for us. you fight little bugs called bacteria or viruses. and if you look at it that way, you know, the risk premium we have is really quite good. that is what it looks like when it hits a roadmap. yes then people to go drive this thing and take this chance. you don't always need a boat or a jet or something to develop. let's reason this out.
this guy should not be limited. healthcare has an opportunity cost, among them educating our kids. finally, it is not uncommon to be with people,people, and i have been with these people, will tell you that if within the high prices of the drug industry they argue for more protection, cuts in social spending and lowering taxes. and they do that in one breath. you want everyone to have harmony. that will increase social spending. you'll need a phd to understand that.
that brings to mind a theory that was developed, and astronomical theory of the strongest proof that there is intelligent life elsewhere in the universe is that it has never tried to contact us. thank you very much. [applause] >> well, thank you for that wonderful presentation. i promised you an exceptional panel of speakers with a very diverse perspectives at the beginning of this command i hopei hope you feel that is what you got here today. not always a lot of agreement, but a lot of fun. anyhow, now is the time for questions. if you have aa question. you to fill out that blue card in your packet and passive forward. i will go ahead and throw
out the 1st question. he has will it scale up? andrew, youandrew, you had more time to start the scaling up process. why don't you least take a stab at that. >> it is a great question, and it is important. we don't do enough. there is a growing science of scale. i think the scale answer was provided in the opening talk by cms. our payment model alternative quality contract was written into the regulations that established the affordable organizations,organizations, and the goals and philosophy
that has been established on accountable care and payment reform which is then causing the kind of delivery reform that we have seen in massachusetts and is being generated in florida as an example. i was just going back to kaiser, there is an aspect of the kind of care we are promoting which is integrated and fragmented and involves physicians practicing more as a team, but i would like to think that also it will have some of the innovations that may not have been possible. >> two comments. first of all, thank you for going last. following him is not a fun thing. thank you for that. i believe what we are trying to do will scale because we
try to have flexibility in our model. we asked for guidelines, not micromanagement. all of my markets are different. i cannot do it exactly the same way. one of the problems is thinking that because it worked in california it will work the same in dc or somewhere else. customers of the reason that kaiser did not scale. customers were not willing to go to the model. now, i think we have different market conditions because if you think about consumer choice in the world most of us lived in your employer made the decision by selecting a health plan. there was a lot of angst among the employees. the market is becoming much more in it