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tv   Key Capitol Hill Hearings  CSPAN  November 13, 2015 12:00am-9:01am EST

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and got a robust interest. we hope to announce the select entities soon. prospective attributions. know your population. populations, you can choose a lower amount than full population-based payment. patients can select their aco. what we call voluntary at trib bus but the beneficiary says this is it and things can happen like rebates to the beneficiary to stay within network and enhance care coordination services because the provider knows they're part of the knows they're part of the network. captioning performed by vitac captions copyright national cable satellite corp. 2008 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.
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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
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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
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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 --
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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...
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>> >> and like i said we will release the first to result soon but we're very excited about this model. transforming clinical practice we are investing in supporting positions over $650 million investment with 140,000 physicians thank clinician's across all 50 states. to lower cost and improve population in health management. on the next slide the news like decrease seeing
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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.
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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.
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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
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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.
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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.
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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.
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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.
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>> 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
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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
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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.
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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
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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
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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
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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
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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.
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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
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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?
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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
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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
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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
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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
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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
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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
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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 organizationthe blue cross
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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%
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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.
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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
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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
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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]
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>> 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]
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>> 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
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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
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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
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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
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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
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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
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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?
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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.
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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
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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
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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
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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
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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
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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
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biggest reasons don't have a free market today is retold pay for this stuff directly is the biggest iver 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 that insurance companies cover branded drugs regardless of they are more effective than generic alternatives products are required to cover and there may be cases where that is
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separate it is better for a fraction of the cost to lower premiums to rationalize their formularies where they should. . .
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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
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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
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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
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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
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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
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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.
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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]
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>> 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.
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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.
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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
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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.
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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
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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
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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 reason i said that, well, 70 years ago we invented a wonderful thing in america call kaiser.
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i still believe that is a way healthcare should be delivered. since we already mentioned it, why reinvent something less good? i don't get it, but i'm just an immigrant. 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
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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
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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.
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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.
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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.
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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
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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.
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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
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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
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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
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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
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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
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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]
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>> 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.
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>> 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
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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.
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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 to have much more of an individual market command i think when individuals have the choice and see the cost scale between the different options, they are willing to make decisions about taking a narrowera narrower set of choices or this particular set of providers because i
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understand the value trade-off equation is my expense. that is different than when your employer makes the choice for you. so there are different market conditions today which allows more of the kaiser type model to flourish again. >> one more question. thank you. i will ask another question. the question is, already talked about patient outcomes. the diabetics improving the cancer patients living longer? >> we have outcomes, the
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things that we measure. diabetics are getting better in terms of the standard measures. we don't yet have mortality data on that. the ecology area is near where the measurement development is earlier. but i have no doubt that patients are healthier. >> we are seeing results headed in the right direction, but it is early. when i will say is, on the oncology side we created to cancer oncology aclu's for the 1st of the type that were disease pacific.
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one of those was moffitt cancer center. we arecenter. we are trying to try patients to the very best facilities. if you think about how cancer is handled every hospital is trying to manage it, and get there are clear centers of excellence. we are trying to make sure we have an opportunity to drive to the center of excellence that handles the volume and has the expertise we are giving patients and members a chance to get care at the best facilities. >> here is a question. what is the role of provider competition or consolidation in the transition to value -based alternative payment models? many argue that they must march together to have a scale and resources and clinical immigration necessary to keep the transition. is this accurate?
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>> i would say that integration we believe is necessary to provide the kind of care that a lot of us have talked about. thank you. but integration does not imply that it has to be ownership, shared ownership. you can have virtual integration. some are highest performing groups, smaller practices that are affiliated with one or two hospitals that are not owned practices. integration, we think, is a condition, but ownership is not. >> the one comment i would make is that we bought a multi- specialty practice just outside of tampa, florida for the highest quality practice in that area command the interesting part was there to main suitors were hospital systems. philly doctors came and said comeau we would like you to begin this process because if we are bought by either
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hospital system we know we will have to compromise our approach to medicine and admit more patience than we think is right. we got in that makes because we want to learn, thought this was the right partner command they made a compelling case but how they would be compromised to permit the patient. are you getting that doctors best and most objective opinion? >> let's switch over. with all of the buzz in california how do you think this will affect the industry? will it ever pass?
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>> transparency will help, but i'm not sure how much. drug company should be able to list why they think this is right. why is not how things work on a normal market. consumers decide whether it is appropriate. so transparency can help, but they already publish pharmacokinetic and make studies that are supposed to demonstrate if any drug comes along how much it reduces the length of stay and how much money the system saves from doing so, and typically show that the drug will cost more in terms of the total cost of care.
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transparency alone is the issue. we need to have more competition. competition is what leads to pricing signals that matter. >> you want to comment? >> this issue of front -- price transparency, one should not oversell it. martin who work as an economist work at the ftc and was clear and pointing that out commanded is, if you have a noncompetitive market you still have very high prices, so you do need some form of competition, and very often it does
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actually come in the form of made the product. there are a lot of people down. i have never been so down on it because they can in fact exert the competition which we have seen. the other problem is in the us there is no one price for anything. it varies by insurance company, products. what do you pay for colonoscopy? probably 50 prices. if you look at the cost of making that drive, that's
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only part of it. and to make people understand what costs are. so i'm not sure what you actually get masking for costs information. all kinds of information. >> we have a reasonable amount of information.
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>> do you see tools such as peer boss drug advocates. >> not really. if there is a perception, puerto rico perception, that is something larger companies pay attention to. you will not be super aggressive because i know that has policy and political qualifications.
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these metrics can help but don't necessarily give you a real expression. they can compete and deliver prices. the uk has this agency called nice. they use these things so much that economists like to assess, does this truck cost more than 20,000 pounds sterling? if it doesn't we won't recommend reimbursement. a lot of people in washington agencies and academics think that's beautiful. the problem is, it leads you to funny situations.
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about ten years ago nice was trying to figure out whether to reimburse. and because the drug was expensive they decided to reimburse for the drug if you are already blind in one eye but not if you could see from both of your eyes, the idea being that was not a biga big deal because you still have another i could see whereas if you only had one you would be totally blind and that would be bad. we won't pay for it to treat people who could see in both eyes. he can understand why the average person thought that was completely ridiculous. it is critically important
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to have site in both your eyes. and so when a bunch of people are sitting around room making these decisions they are not always thinking about what the patient wants in that case the patient might have said it does not look like it, but, but i do want to see in them willing to pay for it. but consumers don't have the opportunity to deliver this person. >> here he comes. >> the public debate about spending on pharmaceuticals has been mostly this debate you have heard replicated on regulation versus competition mobile what i
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say about the work being done is that it is bringing the voice of the commission to the debate which has been largely absent. by raising questions about the relationship between the price and efficacy of drugs is making an important contribution i think it will add a lot to the debate. >> i noticed the english you are using. how do you value this? he put a different price on this than a ratea rate 22,000 and a which is making 25,000 could command many economists would say, well,,
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well, which are says no value it as much. which is a mission to cover misuse of english. so ultimately you asked if you want to distributed on the basis of price and ability to pay? we could do this mode you like everyone to have access? and if he sent a letter to become the collective decision because then you are asking me much i'm willing to pay for someone whom i don't know i may not like if i did it this treatment.
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to argue that the market can solve this doesn't make sense to me. the birds made that decision and i am sure that they relented. they repent when they see popular pressure, but that is a difficulty that was alluding to. we do not know what value to put on a quality adjusted life. the britts sort of do, but they relented under pressure we don't want to discuss it. this congress won't even allow costs to be entered in cost effective analysis.
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congress hates cost-effectiveness analysis because it might implicitly put a value on human life. that is how shall we are. this is a larger issue than to say what i would be willing to pay for drug. it always turns out clearly in the case when you see the people who actually get this drug often on public programs are in jail and it becomes a collective decision. at some point our students will have to come to terms. i think that we can, forcan, for a couple of years, still sweep it under the rug. what you would not catch me doing is to say, yes, we should cover it command yes we should pay a high price commander should cut social spending and lower taxes. that would not happen to me.
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i can guarantee it. >> i did want to comment on this as well, but i did not want you to explode waiting to get an answer out. let me make a couple of comments about pharmaceutical pricing. the margin on pharmaceuticals around the world is a fraction of what is the us. we should be asking a question about that. while we pay so much more endo we willing to fund the world innovation and research and development. i went on a delegation trip in minnesota the germany and the gentleman in charge of pharmaceutical purchasing germany asked us why you allow for pharmaceuticals to be advertised on television. has anyone seen the chart that shows us from the spending from before we haven't has ent veta afterwards? and so you have to ask about efficacy.
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when we went direct to the consumer it exploded. we are one of the most nations in the world spending on pharma and get our outcomes and health levels are nowhere near other places. there are baseline questions that we need to ask about whether or not we are willing to fund the world on this and the fact that we restrict ourselves for negotiating is something that continues to amaze me, does not give more attention in the press,press, debate in washington dc. the largest purchaser does not get to negotiate the price. it is absurd. >> am tempted to end on that.
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thank you. question is from the congressional office. only about 2 percent of people use them. will make is the last question. in massachusetts we are required to make that information available to our members command the key barrier has been you can tell someone the price of procedure. we talked about the price for colonoscopy, but could you tell them what they are price would be given their policy copayment. the website. the question is right. the ticket still low, but it
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is starting to grow. >> i was completely agree with andrew command i cited that example in my comments. they are encouraging them. it is certainly available through our website. the take-up has not been a strong as we would like to be, but it is better than the national numbers. >> the base reason why computers don't use these tools is because they don't actually save any money if they use a less expensive hospital. by and large the economic incentive is not there is a part of what draws hospital economics. it does restrict competition and the ability of it directs the highest quality
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lows caused care. so this is a huge problem that we must do more to address which involves two different lanes, antitrust and competition reducing barriers to entry and i ever side we have to give more opportunities to patients. in that way the insurance company has the incentive to make sure they are holding hospitals accountable. >> there is also a fallacy that if it costs more and is higher quality. we believe that the data does not bear that out of all. >> massachusetts publishes a cost report every year, and it turns out that the drift
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has been toward more expensive facilities, and other words, they have these prices, but in fact rather than what you would expect people not know the prices in gravitate toward the cheaper, less costly facilities, it was the opposite. everything is going to ask both of you, are these binding prices, what was in the past? in other words, if i go to a dr. dr. that i thought was low-cost, my guaranteed to get low cost? in some senses it binding, or what am i looking at? >> today they are estimates within a range and based upon history. it is not an absolute contract, but gets you within pretty close proximity. >> maybe the popularity will grow over time. >> let's make not the last word.
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i would like to thank our panelists. [applause] you guys have been a studying -- stunning audience. fill out your evaluation form and we would appreciate that. we would like to thank congressman crenshaw's office. i would like to thank allison myers.l care and
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reducing costs. listen live any time on our c-span radio app. get best access from behind the scenes. stay with c-span, c spa-span ra and c-span.org for your best access to congress. turkey's ruling akp party regained the majority in elections this month.
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the bipartisan center and the school of international advanced studies hosted a forum this week on the outcome of the turkish election and what it means for the u.s. and the fight against isis. this is 90 minutes. my name is mamuka tsereteli. welcome to johns hopkins universities's school of advanced international studies. we are here today to discuss joint project of central asia cau caucasus institute on turkey transformed. bpc, bipartisan policy center, published this report shortly before the november 1st election. and the report is available at
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bipartisanpolicy.org. the studies are available online. there are also copies outside. i also need to mention that central asia caucasus institute, we publish occasionally and it's available at w www.turkeyanalyst.org. on november 18th we will talk about environmental issues that affect the country of georgia. i'll start a very brief introduction by saying there is no need, probably, to talk too much about strategic importance of turkey, for very person
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critical region stretched between central asia through middle east and eastern mediterranean. turkey is important from security, military, political, economic, energy transit, and other perspectives. it is important, what is happening in turkey is important for turkey itself, obviously, but also for its neighbors, for the united states strategic interests in the area as well. that explains public interest towards important elections in turkey held in early november. we all know the results of the election. turkish presidente erdogan had majority, the results outperformed every poll and surprised even very seasoned analysts. this has begin erdogan and the akp party a mandate to govern.
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the national will manifested itself on november 1st in favor of stability. our forum today is focused on the meaning of this election for turkey short term and long term perspective and what it means also for other actors all around the world. our first speaker is ambassador eric edelman who is ideally suited for tonight's task because he holds positions at the bipartisan center and is a distinguished scholar. alan makovsky was undersecretary of defense for policy between 2005 and 2009. he will be followed by two
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authors of the study. one is our director for central asia caucasus institute, dr. svante cornell, an expert on turkey, and holds his ba degree from the middle east technical university in ankara. the other is blaise misztal, director of foreign policy at bipartisan policy center. we are also fortunate to have two commentators today who were not directly involved in the report but who are members of the bipartisan policy center. these are alan makovsky who founded the washington institute's turkey research program and later served as the top middle eastern adviser on foreign affairs committee. finally, last but not least is john hannah, senior consulate,
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foundation for middle eastern policy. he was the national security adviser to vice president cheney. without further delay, ambassador edelman. >> thank you. let me just say at the outset, unfortunately i have to leave a little bit after 6:00 because i have another commitment. i would feel worse if not for the fact that i'm sitting on a panel with a group of people with whom i've worked on this and other subjects for many, many years. and i know that the audience will be well-served, probably better-served in my absence. let me start actually with a couple of comments about the report and why we decided that the task force would appropriate
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report and then make a few comments about what it might say about turkey's prospects post-election. a couple of years ago, we did a report which looked at the ideological origins of turkish foreign policy. this is within the context of a foreign policy that had begun under then prime minister -- or then foreign minister, now the prime minister, that turkey should have no problems with its neighbors and that should be the motto of turkish foreign policy, zero problems with neighbors. and that policy had over time morphed into a policy in which turkey seemed to have many problems with all of its neighbors, and in particular seemed to have developed a foreign policy that was more marked by sectarian allegiances in the neighboring region than it was by the initial injunction
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to avoid problems with neighbors. and in the course of preparing that report, i think it occurred to several of us that it might also be useful to look into the ideological origins of wha grear trend towards authoritarian behavior in president erdogan and in the government in turkey, because it seemed to us that so much of turkish foreign policy behavior could not really be explained without reference to what was going on domestically in turkish society and the turkish polity. we undertook to write this report, which i commend it to everybody. i think it's quite i will humu
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illuminating. we were able to have a panel a week or so before the election with some very distinguished commentators, professor michael reynolds of princeton, and amarin zaman in turkey, who both agreed that this paper has a lot to tell people, including people who know a lot about turkey, about from whence springs some of what we see in turkey's current political circumstance. the changes we see going on in the media environment, changes we see going on in education policy, et cetera. the paper i think serves as a useful backdrop to the election. and as was mentioned a minute ago, i don't think very many observers saw this election result coming. in effect, between the june election and the november
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election, the party gained about 5 million votes. it went from about 40% of a share of the vote to about 49.4%. turkey has a tradition of free and fair elections. and it's hard to imagine, although there was some vote-stealing in the ankara municipal pal election a year or so ago, that appears to have been more significant than usual, it's hard to imagine that 5 million votes were stolen in this election. but that being said, it would be very hard to characterize this election as a fair election. it's hard to characterize it as a fair election both because of the atmosphere of violence and intimidation under which the election campaign took place. i have in mind the burning and looting of over 200 offices of the hdp, the kurdish party in
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turkey. i have in mind the demonstrations by thug-ish elements supporting the ak party against mainstream outlines. just days before the election, the takeover of the media offices and the use of tear gas and arrests of journalists are hardly the kind of environment in which a fair election can take place. that's not to mention the high level of violence, almost as high as what we used to see back in the 1980s, that make it very difficult to imagine a four election being held in the southeast, where a very large number of the country's kurdish voters reside. so in light of that, what do we find ourselves facing?
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although this, you know, victory, as i said, was not foreseen by others, between june and november 1st, not one predicted this outcome. i think the highest i saw in any poll was something like 47% for akp. that was very much an outlier. what it tells you is even with this very large victory, the prime minister and the president have received 49% of the vote. and that indicates i think that turkey remains a very, very deeply divided society. and what that requires, in my view, to move turkey forward, to be the kind of society that we would like to see it be, the kind of democratic, pluralistic partner for the united states
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that we needed to be in the middle east, that the government would approach the task of governing in a spirit of both reconciliation of political differences, an emphasis on peaceful reconciliation of differences, and a concern for pluralism and tolerance in turkish society, rather than some of the overheated rhetoric we've seen, particularly from the president, over the last couple of years. indeed, i think that's what prime minister davotalo would like to see given some comments he's made since the election. but i'm fearful that's not the result we're likely to see. one of i think the findings of the two papers to which i referred is that the president has an extremely limited view of
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turkish democracy. he won and his opponents lost and now he gets to govern in whatever way he sees fit. i think that is likely to carry turkey further in the direction of greater polarization, increased violence, and perhaps worse, unless that trend is arrested. i hope i'm wrong. i would be delighted to be proven wrong. but i'm afraid that given what we've seen over the last few years, it's hard to imagine him approaching this in any other way. i think that makes it incumbent on the united states to make clear in its interaction, both privately and publicly with the government of turkey, the importance we attach to freedom of expression, to the rule of law, to do a fair regard for
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other opinions in turkish society, and for a spirit of tolerance to be the guiding force in the turkish government's policies, rather than the efforts to eliminate criticism, crack down on the media, paint opponents with a very broad brush as terrorists and supporters of terrorists. and that's what i hope we'll see from the u.s. government, although i'm not very sanguine about that either. why don't i stop there. >> dr. cornell. >> thank you. and thank you, ambassador edelman, for your comments. i take my starting point, if you will, in the rethetetrospective where turkey is today compared to when the akp came on the political scene. of course the akp had broken
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from the i say lattist movement of which it had been a part, embraced membership in the eu, or the idea of membership in the eu, embraced democracy, and it promised to break the authoritarian system in turkey and introduce a true political democracy. especially in the post-9/11 period when there was a quest of moderate muslims throughout the the world, what better could there be? of course what we see today is the turkey that president erdogan and the akp has developed is very far from what they were saying then, what western observers and turkish liberals believed when they quite significant support and endorsement of the akp. ambassador edelman went into some of the details of the events we saw before enduring
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this election people. when 100 people or more are killed by suicide bombers in the capital of the city, we see the police responding by shooting tear gas and water cannons at the dead and injured people and hindering first responders from coming to the scene. this is something very different from what we expected. what we're seeing from the new turkey project of president erdogan and prime minister davutoglu, we go into twin processes, if you will, chronologically. first, the process of deepening authoritarianism, and then the process of accelerated islam icization. my comment will speak more about the authoritarian elements of this system. i will say it's very often noted that while the turkey that existed before the akp wasn't ideal, that was a semiauthoritarian system as well. and i think that's a fair point. on that note, however, i think
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it's not the level of authoritarianism but the nature of authoritarianism. the old system that existed in turkey was built not an individual persons but on institutions. it was rather predictable. there was a structure to the system that existed. and to a considerable degree it was actually built on laws. you can disagree with those laws, and i think most people in the west did disagree with some of the system. but it was enshrined in the constitution with the national security council, the courts, antiterror laws, and everything. what we're seeing now is a very different type of authoritarian system that is centered around one individual. that makes it more volatile and unstable, because even with 317 seats in the parliament, president erdogan is not in a position to achieve the system he has already said is already de facto in existence in turkey and the one that we should change the constitution to reflect. he's actually governing in a way
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that is completely different from what the constitutional system of turkey is mandating. and i think this deinstitutionalization of power may be the most dangerous facet of what's going on in turkey today. in the study we also 32 what for a long time was a dog that didn't bark in turkey, many the policies of islamzation that many were crying wolf about ten or 15 years ago that didn't seem to happen. but especially after the 2011 elections, we a clear change and acceleration of these policies. two issues we particularly discuss, one is the education issue. it's a massive reversal of the secularizing reforms of the educational system of the late 1990s. the great insertion of religious content into the regular school system of turkey, in parallel
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with that the rebuilding of a directly religious school system run very much under the supervision of a foundation that is run by the erdogan family. in this process we see the transformation of regular schools into the religious schools against the wishes of the people who actually have kids in those schools. we see an education system that actually tries to push people into the religious schools from the regular schools in turkey. the second element is the role of the state directorate for religious affairs when existed from the earliey era to control religion. it's now being used to propagate the mainstream sunni form of islam that is the majority form in turkey, probably 60 to 65% of turks belong to this islam, but
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not the rest of the population. you have a directorate of religious affairs that only promotes one form of islam and that has grown tremendously in size but also in its public profile. it issues salal certificate, there's a 1-800 line you can call to find out whether what you're about to do is in conformity with islamic laws. that doesn't carry any legal weight in the turkish system, but it has a strong form of authority, informally, over society. i think that's very noteworthy. there has been a massive expansion of koran courses.
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whereas they used to be available only for children over the age of 12, any limitations of age, for the trainers of teachers of these courses has been more or less dismantled, which has changed very much the situation. finally, it used to have a chairman who was a neutral, nonpolitical person. now we very clearly see how the leadership is overly supportive of the policies of the government. there is also an increasing staffing of the organization by people belonging to the religious orders. with respect to the role of women in public life, there is the increasing role of crony capitalism that is seeking to move ownership of the economy in erdogan's own words to a new islamic elite.
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as ambassador edelman noted, the sectarian nature of foreign policy, especially with regard to syria but also in places like libya. now, in trying to understand why this is happening in turkey, very often we find that blame is being put either on western alienation of turkey, either the eu, germans and french alienated turkey, or the u.s. with the with war in iraq alienated turkey, or if only it was erdogan personally who was running turkey, but people like the prime minister or senior people in the party, if only it was somebody else from the movement rather than erdogan, we wouldn't have this problem. in other words, all of these explanations, if you will, assume that the problem is not
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that our fundamental analysis of the nature of the akp was wrong, but that something went wrong along the way. what our study does is to say that this is fundamentally wrong, that all these underestimate and ignore the ideological baggage of the akp, which is consistent with what you're seeing playing out in turkey presently, and that is turkish islamicism is much more radical than is traditionally thought. this movement has refrained from being violent. it has always had an attitude not to have arms against the state. but what we see is that the ideas propagated by this movement are profoundly radical. very quickly, there are three
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roots to this movement. and one of these is the order which especially from the early 19th century onward brought experimentatio interpretations much more orthodox into the turkish mainstream. we shouldn't look at it as a spiritual sufi order. this is extremely political in its nature. this is the first root of the akp today. the other is turkish thinkers, islamist thinkers of the '20s and '30s, if you look at what they believe and who they are, they were highly inspired by ideologies of the 1930s, particularly the fascists, and
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were passionate opponents of the west and very strong antise se-e anti-semit anti-semites. the third element is the groups which were influential from the 1960s onward. to give you an example of how this comes together, the grand old man of turkish islamism who died several years ago died posthumously a book of memoirs which roughly translates to "mein kampf," basically "my struggle," which i think the most important feature is that it's at the core of the belief system in the islamist movement in turkey.
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there are 30 pages at the front of this book called "those who rule the world," which talks about the freemasons who founded the u.n. and nato as well as the european union and the council of foreign relations and so on and so forth. and in principle, you come away with the understanding that not only everything that is jewish is bad, but everything that is bad in the world is jewish. this is the cornerstone of his ideology and has deeply colored the entire islamist movement in turkey. of course the akp was born out of a breach away from this la this islamist movement. but the akp never did leave that movement behind intellectually. the rebranding that took place among islamist intellectuals
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didn't really occur when the akp created. it started with the creation of the party in 1988 which preceded the akp and after erdogan was removed from power. where the akp came in was to get rid of the old guard, which was a block in the progress of their political ambitions. it occurred until the party was closed down by the courts in 2001. in the paper we discuss how this process of rebranding was very tactical in nature. and it's important to note that erdogan himself was, after the accupuncture of 1997, embraced the eu and embraced the issue of applying to the courts for redress for closure of the party. magically, in his book published in 2014, there is nothing about
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this, nothing about the eu, nothing about democracy, as if it had never happened, back to the hard core islamist ideologies of the 1960s and '70s. i think in principle what you are left with the conclusion is that the rebranding of the akp never went to the core issue that the islamist movement in turkey and the people who very much today remain the decisionmakers in the akp, have a world view that remains based on an essentially anti-semitic world view of a jewish conspiracy. there is a return to the hard core islamist ideas and values that were part of the islamist movement in turkey in the 1960s and 1970s. looking at the june election, we found that erdogan was
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everywhere, in rallies, on posters. the defeat of the akp in june was in fact people saying no to the idea of a presidential system and an authoritarian system built in one man. what you find in the november election is you don't find erdogan on rallies and posters. the akp tried to show itself as a party, and that's why they were successful in the election. people voidted for the party an the system and not so much the individual erdogan. much more importantly, whether or not he succeeds in having constitutional backing for a system that in practice is already existing, he will have at least four more years to make it an irreversibly more middle
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eastern country but also a more polarized country than it was when he took power. thank you. >> thank you. blaise? >> thank you. alford white had said that the tradition of western philosophy consists of footnotes to plato. that's why i cite philosophy, i figured i would read plato and be done with it. but i think i'll just be a footnote to our previous speakers' presentations. it's hard not to come to the conclusion that there is a departure from democracy, beginning with the protests in the last days of may 2013, that were met with a brutal police response, followed by the december 17th investigations into corruption and the way that the prosecutors who brought
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those charges dealt with them and the police forces dismissed, it'sed about clear that then prime minister and now president erdogan calls the shots in turkey. but the purpose of this paper was to examine the sort of nature of authoritarianism in turkey a little more deeply and ask where it's come from, what is its nature, what is its structure, how is it sort of being implemented, and why it matters. and i think on the first point, as svante presented, an argued we made in the paper is all the trends we're seeing in turkey today are not the result of something that just miraculously happened in 2013 or even at some earlier date. it's not the result of a break that erdogan had, it's not the result of a party-wide objective. as svante laid out, we can trace
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the akp's ideology to an authoritarian ideology. if you look at the parties that erdogan led throughout his tenure, they're all with him being a strong leader and controlling them. it's not surprising that's what we're seeing manifesting in the party that is the inheritor of that, the akp party. the democratic moment that you see in 2002, 2003, that this is a democratic party that's going to solve the democratic deficit that turkey has been facing, is really actually the entree in some ways to the authoritarianism that we see
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today, that in order for the akp to stay in power, to avoid the fate its predecessors had met, the 1997 coup, that still being fresh in people's minds, without being mettled with. the first step towards that was sort of clearing the underbrush, clearing the threats to their rule, which was primarily the military, which is what we see sort of in 2006, '07, with the sledgehammer case, the allegations of coup plotting and terrorism with journalists supporting them. then you see the akp completely swing the pendulum the other way, become the mirror image. first they were sort of the outsiders trying to clear away
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the institutions of the state that might oppose them, then suddenly they become the institutions of the state trying to clear way the economic institutions that might oppose them. you're seeing in turkey authoritarianism on two levels. one is the deinstitutionalization and the concentration of power in erdogan's hands and the attempt to do away with checks and balances, separation of powers, rule of law, that is meant to shield the use of powers that you see, tinkering with the 2010 constitution, and the way judges and prosecutors are appointed. suddenly you start stacking the courts, essentially, allowing erdogan to dictate how decisions are made. you see rule of law and separation of powers eroding in
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the media regulatory body, which leads to some of the invasion of media freedom that the ambassador menditioned. and the elimination of possible sources of opposition, closing the open spirit of society, both in terms of, as we saw dramatically in the lead-up to the election, the imprisonment of journalists, the targeting of journalists, some of this being done through government means, through sort of legal means, but a lot of it being extra-legally with mobs showing up at opposition newspapers, sometimes led by government mps, by ak party mps, but not in any sort of official capacity, and ran sacking those offices, mobs showing up and ransacking the offices of opposing political
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parties. you see sort of a crony capitalism emerge as a means of enriching supporters of the government as well as the party through kick backs enriching itself and also pushing out from the economy and from access to wealth and from access to being able to own media companies and mount opposition to the government or anyone who doesn't agree with it. so you really see a system, not just within government, but also within civil society, media, and the economy. and the question of why this matters has been hinted at, as svante said, it's about polarzation and stability. turkey has -- often we tend to talk about the akp and its opposition as sort of the socially conservative or the
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pipi pious versus the conservatives. all these cleave adjust ages ar right now. what you've seen between june and the election is they've really hardened in a way that appears difficult to reverse at this point. going into the june election, there was a lot of optimistic specifically around the possibility that the hdp, the kurdish party, might cross the 10% threshold for the first time and that this would be a significant step forward for turkish society and a way to moderate the akp's power. there is also a sent of possibility, a sense of change imminent or at least possible, and still a dedication to the democratic process. i think among a lot of members of the opposition, that sense of hope really evaporated by the time the november election came around, because it seemed apparent that president erdogan
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and the akp party were willing to destabilize the country in order to make the argument that they could bring stability back and therefore were the right choice. and the other reason this matters, i feel often in washington erdogan's antics are seen as electoral strategies. turkey now has had four elections in the last two years, and so it's often very easy to say they're just shutting down youtube and twitter because they need to do this before the election, but after the election, don't worry, everything will come back, oh, he's just cracking down on the kurds because he's doing this to gain votes before the election, but after the election, don't worry, everything will change. first of all, we haven't seen that, multiple times we've heard that this will happen, it hasn't. secondly, there's a sort of circular logic, we shouldn't worry about erdogan's
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authoritarian tendencies, because as soon as he wins the election he won't resort to them. but he runs to create an author tan yan system that he's not shy about talking about, or effectively trying to pretend to ourselves that once he has the power to be an authoritarian for real, he won't be one, which seems a little circular. so paying attention to the ideology and objectives that are driving both erdogan and the party, it's important to understand where the country will be going in the future. thanks. >> i guess much of what there is to say about the election and the outcome has already been said. so i'll do my best to make it interesting. >> it hasn't been said by you
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yet. >> yes. erdogan was on somewhat of a losing streak, even though he was always coming in first in the elections, i think akp did worse than expected in the local elections in 2014. in the presidential election he got just under 52%, again, really to essentially nobodyies his opponent was essentially unknown at the time of the presidential election. akp lost its majority in june. and i guess i would to say that to me, this election was --
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showed erdogan somewhat recovering the midas touch in politics that he had had previously. it took some guts to roll the dice, maybe he didn't have much choice because he was frightened of not having a majority. but nobody expected a success. and he did succeed. i think also, i'm not sure if it was blaise who alluded to this, i guess he showed a little more flexibility than i expected. i mean, surveys showed, after the last election, that both his presence, his very shrill campaigning for akp, and his
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emphasis on a presidential system which remains not very popular, that those two elements had actually hurt akp in june. so what did he do? and, you know, for somebody -- we tend to think of him as such an egotist that he wouldn't be able to to do this, but he kept himself out of the campaign and you couldn't hear much about the presidential system. so to me he showed surprising tactical ability. a lot of negative things have been said, somebody told me i have to share this cartoon with you, it will mean something to those of you who are familiar with turkish politics. it showed the leaders of the three losing parties sitting around and grumbling about how terrible the polls were, how they missed it entirely.
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and they're all saying, yeah, how can those pollsters stay there, they all ought to resign. an allusion to the fact that turkish party leaders virtually never resign. there is one poll that i think, you know, i think something apost positive has to be said about it. i think they primarily do market research. they've done something close to polls that are held right after the elections. their june 8th poll had over 20% of mhp voters saying that if they turn out, that they would have voted for akp. and i think -- listen, i don't
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know how good the poll is, i can't vouch for it, i'm not here to advertise for it, but either erdogan -- erdogan's polls must have been showing something similar, because on day one, after june 7th, the pro-government papers were all saying the solution is a new election, likely new election. that was before any of the politicians said anything. so he obviously believed the kind of results that came out of that poll. i think that already created the base of voters for akp, which he built on, to his victory in november. he knew there was already a significant chunk of voters who were unhappy with a hung parliament and were going to vote for him for the sake of a majority. now, i do see, like i think many commentators have said, this was a vote for stability.
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and the ipsos policy, by the way, it's only in turkish at this point, but for those of you who have rudimentary knowledge of turkish, it's pretty easy to read. even i could read it. it had some very interesting things in it. but look, i think, although the vote was for stability, i think what the turks are going to reap is a great deal of instability. and here i'll just tick off a lot of things that have already been said. it's clear that erdogan sees had to vote as an affirmation of his policy. so i think we can expect that he will continue to push the presidential system. there's already been indications from his advisors that they intend to push along those
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lines. we know he's 13 votes short in parliament of having enough votes to pass a constitutional amendment that could be brought up for a referendum. but given some of the past cooperation between akp and the nationalist mhp, i wouldn't be shocked to see him cull those extra votes from mhp. and even though, should he get to a referendum, right now roughly 70% of turks say -- and this is, again, from this recent poll after the november election, say they favor a parliamentary system. but once a campaign for a referendum were involved i mean, who knows, akp has many levers,
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and erdogan is very influential. so i think we'll see the presidential system, we're going to see a continuation of the war on the pkk. at any rate, the pkk has what i think is a blunder for the kurdish cause, has said that its temporary cease-fire is over. we're likely to see a crackdown on the universities. there's new regulations passed shortly before the election that gives the higher education council the right to take over universities. media, it's the worst era that i can remember, and my memory goes back a long way on turkey. just to highlight, i know
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they've said already, the police storming a building and just taking the tv stations off the air, and the newspapers, we're taking over, and the next day they flipped 180 degrees editorially. >> or 360 degrees, as prime minister davutoglu would say. >> right, 360 degrees. i don't remember anything like this. there have been nearly 300 cases of journalists and others who have been indicted, arrested, fined for insulting the president. there were no such cases before. the law is on the books. i don't remember it ever being invoked quite so often. i do remember senior officials
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in turkey filing libel suits, including the president many years ago. but it's, you know, an almost foolproof way of getting people to shut up. the crackdown on the gulinis will obviously continue. i just as many of you in the audience know, december 27th, 2013, a corruption case was opened against many akp-associated people. it was followed by a series of leaks of recordings which seemed to implicate erdogan himself. much of subsequent turkish political history i think we can say until november 1 i think has been about the president trying to avoid those charges coming to
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him. some people would argue that's actually why he insisted on becoming president. because it's much harder to get to a president. it takes 3/4 vote for. otherwise he is basically beyond the law. some would argue that's why he needed a majority government. because even a coalition government, it might have been difficult for any non-akp party not to vote in favor of pursuing these corruption charges. now he is insulated from those charges. and i think that story is pretty much over. i think there is going to be some very tough times ahead. not to mention that the economy has been struggling. i'll just -- a couple of things about the united states. is there some silver lining?
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well, i'm trying to be objective. perhaps. from the u.s. point of view the fact that we have been using an agreement with the with what was an interim government but was an akp-dominated government since late july, i guess this likely assures we'll be able to continue to use three other bases in the fight against isis. perhaps if chp had been part of the government, i don't think there would have been any interruption. but elements of chp has its own cut about syria and about the united states. maybe there would have been some complications. now there will not. when we fight a war, winning that war tends to dominate all aspects of our policy, and that's understandable. i think that is going to be the
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dominant element. in our policy, in our turkey policy in the days ahead. but i will echo what ambassador edelman said it's extremely important that we continue to focus on the freedom deficits, and particularly on the repression of freedom of expression. in turkey. >> continue because i have to say despite our strategic needs in turkey, has made some important statements. we're going to have to keep that out front. and i think the first test of how we're going to balance that, or important test will come this weekend. president obama will be in turkey for the g-20 summit. at the previous g-20 summit he seemed to try to evade prime minister erdogan with whom he once had a close relationship, but since 2013 has not.
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it's very difficult to evade your host. and it will be very interesting to see how the president balances. appreciation for the fact that we're able to use turkish bases in the fight against isil with the very deep concern about the lack of freedom and the declining freedom in turkey. i'll leave it at that. >> thank you. john? okay. i'll try and be quick. >> because i wasn't. >> maybe people can ask him some questions. i would just you know, underscore what allen said. as much as i don't like it, i think this election really did
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whatever people thought about june 7th, that was going to be the dagger to the heart that began to put an end to the erdogans absolute rain over turkish politics in the aftermath of what happened november 1, i think we have to say it was at most a stumble. and that he remains a giant. his ability to threaten and persuade, to inspire, to demagogue the turkish public to serve his own political ends i think is without peril irparallel in the turkish system. it was an amazing five-month period to have gone from that stinging rebuke in june 7th to as everybody has said to this
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stunning victory on november 1 that none of the experts and certainly not the pollsters predicted, this resounding overwhelming victory by the akp and its return to majority rule. and all of the more of an earthquake because it was so unexpected and unpredicted, except perhaps for president erdogan himself. as allen said, he was the one who said from the start no, we're going to scuttle these coalition talks. we are going to go to new elections. it's he who took advantage of the assassination of the two policemen in july, seized on the provocation to end the peace process, to declare it dead and launch more or less full-scale conflict in turkey southeast against the pkk. an as my colleagues have said,
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it was he who decided he was going to double down on crushing all forms of dissent inside of turkey, particularly in the media. and just, i mean, really astounding cases of repression. of the media as well as of political opponents particularly within the kurdish dominated hdp. so this was a systematic strategy of erdogan by manufactured chaos, of manufactured irnsability, violence and intimidation to basically scare the turkish people into revisiting the results of june 7th. and returning the akp to monopoly power. because if they didn't, basically, it was as much a threat as a promise that things
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could get much, much worse, and faced with the situation in which stability was the question, inside of turkey, i think their only choice was to return the akp to power. at least they felt -- the majority of voters felt that was their only option, was a strong akp government. and it was a miraculous result when you think about what he did. the strategy was clearly he had to whip up some level of national hysteria and win back nationalist voters that got him to the mhp to back the akp. at the same time he needed to depress the hdp's vote, that kurdish vote that had taken so many voters away from him. and he succeeded, spectacularly on both accounts. mhp lost up to 40 seats. and i assume most of them went to akp. and hdp lost more than a million
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voters i think who are overwhelmingly kurdish voters. so just think about what he did. at one and the same time he won over millions of anti-kurdish right wing nationalists and won over close to a million conservative kurdish votes. that's quite an extraordinary feat to be able to thread that needle. but he did it. and, again, i think it underscores his mastery of turkish politics. what does it mean from here? on out, i agree with my colleagues. i think it's bad news. i think erdogan will see this as a vindication, as a mandate to continue doing what he is doing. that this policy worked. that in fact, you know, whatever narrow window of opportunity existed on june 7th to begin
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dialing back the -- the trajectory toward authoritarianism in turkey, erdogan made sure over the last five months that he was going to slam it shut. and my guess is over the next four years until the voters go to the polls again, he is going to make sure it's nailed, nailed shut. and democracy and pluralism and human rights and freedom of the press is my guess are all going to suffer tremendously. i think he will push this notion of an imperial presidency, whether the turkish people want it or not. i think he'll figure out a way to get it. and if it means dominating not just 70% of the media in turkey as he does now, if the tape requires him dominating 90% of it or 100% of it, that's what he'll do. and if he needs 13 other parliamentarians outside of the akp to be able to go to a constitutional referendum on executive presidency, i think
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with the political winds at his back, with all of the powers of the state in his command, including all the coercive powers, but all the incentives that the state can potentially provide to these parliamentarian, i think 13 seats is not a very high hurdle or a big obstacle for him to work on over the course of the next year in order to get that referendum. the peace process with the kurds, again, i'm not sure. but the fact is that pushing the peace process, i think he'll look back and say that cost me votes. that cost me nationalist votes. i think this election underscores for him how important that right wing nationalist constituency is to his ability to consolidate power. i think that is a lesson he'll take, that reaching out to the kurds, looking like i was pursuing a settlement, that hurt
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me, when in fact over the last five months increased tensions, increased conflict, increased violence with the kurds. that got me november 1st. that's the path to go. maybe not full-scale war. costs of that politically, economically in terms of how foreign investors look at turkey, that could be not a place he wants to go. but the thought of low level tensions continued simmering conflict. my guess is that's what we're likely to see, a continuation of. in syria, we'll see. but i think this attitude on the kurdish question, this increased sense of playing, being able to play the nationalist card, of seeing kurdish aspirations as a threat, even a mortal threat to turkey's territorial integrity, i think that could spill over on to the syrian front, and
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particularly the kurdish question inside of syria. i think the fact that increasingly, it looks like u.s. strategy is growingly dependent on the syrian movement, which is closely aligned with the pkk inside of turkey. the u.s. is really holding on to the ypg now as an integral part of its ability to fight this war against isis on the ground, including in being able to put pressure on its capital in raqqah, which is -- must be one of the main lines of our operations there, as secretary carter has recently said in testimony. i think that that clearly, and the turks have said, that is a major, major problem for them. even perhaps a red line, the notion of a budding u.s.-ypg military alliance on their border is something that they said they cannot tolerate.
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up to now, well, all we've seen is isolated incidents of some artillery, some air strikes by turkey on ypg's positions across the border. but i think that's something to watch. and no doubt hopefully this weekend and early next weekend when the president does talk to erdogan, trying to reach some better understandings about where we're headed on syria is going to be very important. including on what we're going to do or not do with the ypg. and if not the ypg as the tip of the spear fighting isis, then what's turkey's answer? who else is going to do it? what is turkey going to do? it's certainly not the answer that turkey has had so far, which is essentially to empower the nonisis radical gee hjihadi across the border. that's not a serious alternative to what we're trying to do on
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the ground against isis. and now there is this question what skin is turkey willing to put in the game. there has been subtle hints, not so serious hints that now they're prepared to get serious. they even put boots on the ground. are they prepared to do that? are they prepared to go in and put boots on the ground and police the safe zone inside of syria? we'll see. that's a question worth pursuing. there are real potential land mines between us and turkey. and i'm not at all sure this election makes it easier to resolve. in some ways it may make it tougher because of where erdogan and the military is on the question of the kurds. and belief me, there are a lot of -- there is no doubt a lot of turks, pkk people that are fighting inside of syria with the ypg. and the turks have said if there are u.s. weapons that go to the
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ypg that end up then inside of turkey being used against turkish security forces, that will be a real diplomatic crisis between the united states and turkey. and there are a lot of things moving now that could point us in that kind of direction. and i think that something will very much want to head off. i'd finally say that, you know, stepping back, the larger picture here for me is that i don't know how narrow the window was, but i do think there was a window opened after june 7th in which turkey may -- had a chance to actually begin to put the brakes on the juggernaut of erdogan hurtling toward a more authoritarian future for turkey. i think we probably will look back in retrospect and see this election on november 1 as a real hinge point for the country
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where it did face a chance to go in perhaps two different directions. and there may have been an offramp for them away from, off of this superhighway of erdogan's towards some form of putinism with the very nasty islamist twist to it. i think they thought about it. they thought about it a second time. may have changed their mind and then didn't take that exit. and now it's in their rear view mirror, and they may have ended up in the express lane to some form of turkish putinism. and getting back to that exit from this very bad trajectory i think is going to be very, very difficult. and erdogan is going to make it very difficult if not impossible. to have that kind of exit ramp in 2019. i think that will be a singular strategic purpose of his to make sure that he doesn't have to go
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through the kind of experience he went through in june 7th ever, ever again. so on that cheery note, let me turn it back. >> thank you. >> thanks to all for a very substantive discussion. i think all refrain from my commentary. i would like to use time that we have left for questions from the audience. we'll start here with them. >> i'm a professor here at. i'd like to hear a little more about countervailing forces. the courts media have been mentioned for very little about the military's countervailing forces business community. the opposition political parties. democracy doesn't just happen because people are nice to each other.
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it's because there is some sort of force that works against the autocracy. >> if you could please keep answers as well short so that we could have more questions coming. who wants to start? >> go. >> the mic is yours. >> okay. i think there are countervailing force, but i don't think they're powerful enough. and you mentioned the military. everyone in turkey, i wonder why, always speculates about what turkey is thinking. i think it's clear that erdogan wants the military on his side. and the military is an opaque institution. but i think as much as we can see into it, they strongly support the idea of going after the pkk. they see the pkk as a greater
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threat than is isis. and they see ypg and pkk as more or less the same. and i think they feel this way enough that maybe it's not even completely clear who is driving the policy more. but i think that erdogan and the military are probably more or less in lockstep on this. i think there are other issues where they can put the brakes on, and they have put the brakes on, or mainly -- but i don't think it's about domestic politics. it's foreign policy where they're involved. there was a rumor about two months ago that turkey was about to send land forces into syria. this is strongly opposed by the turkish public. every pole has shown that. according to all reports, and that's all we have to go by, the military said we're not going to do it.
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i think the military never lost total power in turkey. and i'm not sure. i may be somewhat in the minority on this. obviously with all the officers that were arrested, they were hurt badly. they certainly lost their ability to affect domestic politics. but they have in certain ways retained their autonomy. and i think when it comes to the use of them, they are decisive. they're not going to -- you know, in our system, the military might say mr. president, this is a difficult operation you're asking. i'm not sure we can do it. but if the president says do it, our guys will salute. i don't think in turkey, the military has ever been like that. even at its lowest moment. by the way, the military has resisted in other ways too. the military educational system is still intact.
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they control their own educational system. there was an effort, and it was even publicly announced by the government at one point that they wanted graduates of the schools, these sort of state sponsored parochial schools that svante mentioned to be eligible for acceptance into military academies. it was a big fight so that they would be eligible for regular universities. they won that. military said no. they won that battle. so it's not 100% to nothing. when it comes to domestic politics, i don't really see. yeah, the business community, the big business community maybe doesn't like erdogan so much. but there is a lot of people, the so-called anatolian tigers are a significant factor, are very much supportive of him.
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>> blaise had some comments? >> sure. i think -- i would say what countervailing forces there are, aren't looking at democratic means to be countervailing forces. if they even want to be, alan discussed the military. it's not clear if they really want to be involved. but if they would, it wouldn't be democratically. you know, the big businesses that alan mentioned, a lot of them, a lot of the lead in turkey are deciding to leave turkey rather than continue living under an erdogan system where they feel they're going to be oppressed or their liberties are going to be foresaken. among the kurds one of the stories not discussed is the radicalization happening in the youth in some of these towns where there is lots of fighting between security forces and kurdish youths. they were not pkk fighters. they were not members of the pkk who had been taken and trained in the mountains. their local youth had been
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radicalized by what is going on and taken up arms themselves to defend their cities. and again, that's not a very democratic process. i think the one place that we might be able to say that there is a countervailing force emerging is the personal lan mentioned, the leader -- the co-leader of the hdp who has emerged as sort of the only other charismatic persona on turkey's political scene who might be able to rival erdogan. but there i would say he's very much limited by the politics of his party, even though he aspires to be national party. and he faces two dangers. on the one hand, that he is a danger. he is perceived as a danger to erdogan. and he is perceived as a danger to the pkk. and i think one of the things i heard a lot when i was in turkey recently is so many people want him dead that if he were to be assassinated i wouldn't even know to w.h.o. to suspect. yes, exactly.
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>> thank you. >> thank you. the director of the institute of turkish studies, georgetown university. first of all, i would commend this panel and the position of the bbc for providing an accurate assessment of what is happening in turkey. thank you all for maintaining that position. it's a true resource in this town. one rumor following the g-20, it's suggested that they might actually seize the newspaper in the immediate aftermath. the 70 to 80% media to erdogan, that's something to watch out for. i guess my question is directed at john hannah, i guess. and i wish the ambassador was still here. from the perspective of decision-makers in the room who are going to be advising the president and, you know, it's nice that we're talking about, you know, erdogan's got the brakes off, and this is a dangerous regime headed, and hurtling, whatever. is anybody going to advise the
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president saying we shouldn't do business with these guys, or who are we doing business with? erdogan has the united states and europe over a barrel and a lot of things. he has managed to pull a lot of levers in domestic politics, and he has managed the unthinkable. is it the case that he is also going to be able to do this at the international level? is anybody really going to say to him this is not acceptable? >> i think it's a good question. by the way, you're sitting next to one of our great diplomats on turkey, ambassador holmes, who knows a lot. he has forgotten a lot more about turkey than i know. i would say no. my guess is not. i think there is a sort of sobering reality that has even hit the obama administration about what they are dealing with in turkey, which actually took a very long time for people in this town i think to realize. i wish they had had this study, or we had had the study back in 2002-2003 to understand what we
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were dealing with. i think there was an awful lot of wishful thinking about where erdogan and the kpp were likely to take turkey. and i think we're ruing that now that we harnt hadn't been able to act earlier to put some back stops in support of turkish democracy and freedom of the press and the rule of law and all the things that we care about. and i think in the end of the day, in the long-term are vital for having a serious, stable partner in a nato country. but i think alan is right at the end of the day. especially now in the context that we're dealing with in the middle east today where there seems to be something of a regional meltdown under way. in which this president has in fact launched a war against this terrorist organization in which we are getting some modicum of support now from this turkish
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government. and i think he has manipulated that quite successfully. have i absolutely no doubt the decision after a year to grant us access to those bases in incirlik was very much tied and at the service of his own domestic agenda with an eye toward what he wanted to do on november 1 and what he wanted to do vis-a-vis the pkk. and to buy some level of u.s. acquiescence and silence in that. in the same way have i almost no doubt that what happened all of the sudden after several years of this conflict, this rush of people out of turkey into europe creating this kind of crisis on europe's doorstep was, as they used to say, no accident, comrade. i do believe there was probably some level of manipulation there that erdogan does have his hands on the tap so to speak with
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regard to this refugee crisis, and very much understands and is using this as leverage now in his dealings with both europe and the united states in the west. that if they want to have any hope of solving this crisis, not to mention the broader crisis in syria, as difficult as partner as turkey has been, the hopes of getting a settlement without turkey somehow involved are slim to none, and this crisis gets much, much worse. if that requires you to lower your voice and look away for the moment regarding basically the dismantlement of the turkish democracy and turkish rule of law, well, so be it. these guys are out of office in another 15 months anyway, and it will be somebody else's problem to deal with. for them, i think they'll say listen, we need to deal with them on these difficult regional issues, this war that we're leading. and we can manage the
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problematic nature of internal turkish politics. unfortunately. i think it's unfortunate because i think it will come back to bite us at some point. >> yeah, could i -- turkish strategic importance has always covered a multitude of sins. and i don't think that's -- that's no different now. we need turkey for the war against isis. as long as we feel that, that is probably not going to change. but i did just want to qualify a little bit the idea, the comments that have been made that the administration isn't saying anything. i think they have actually -- i've been surprised to be honest with some of the strong statements if you go back and look at the state department noon press briefs. they have been very tough on turkey, on freedom of expression. and also following the election.
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we did not -- we the u.s. government did not congratulate akp. it's very unusual in a landslide like this. we said we're waiting for official vote, which always comes out in turkey i believe ten days, eight days, ten days after the election. said we won't speculate on the result. i mean, we're the only ones in the world, you know, who wouldn't speculate on what the results were. that was a clear message that we were very unhappy about the human rights situation, the fact that the campaign had taken place under a situation of great restrictions on the opposition. so, you know, i think we have to be fair to the u.s. government on this. >> bill? >> thank you. this has been an excellent panel. i'm bill veal, a retired foreign service officer.
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i wanted to ask ambassador edelman a question. but he is gone. so i'll pitch this to the whole panel here, if you can shed some light on it. you mentioned that turkey is a society with many cleavages in it. and if you set aside the religion and recall that the akp came to power on kind of a promise of economic betterment and good governance, and the economy has been slowing, what is the long-term or near-term implications of this for erdogan and the akp? >> svante, maybe you'll take it? >> do we have an economist here on the panel? i think the -- for a long time, imf and other institutions classify turkey as the most at risk, together with brazil. you have seen over a long period of time tensions within the turkish government where erdogan was more interested in populist
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moves, didn't like the independence of the central bank, for example, want toddler interest rate, stuff like that. and there was a resistance from the professionals, people in the government like alibaba jan who is back. we'll see. it seems the more erdogan capitalizes on this position of power, that's not good news for the management of the economy. and moreover, right now, with the consolidation of power, i think the crony capitalist type of economy that erdogan is building, from 2010 to today, it's really gone off the rails compared to what it used to be. and i don't see that changing. if anything, that's likely to get worse, which means that the conditions for real economic downturn in turkey are certainly there. there needs to be a trigger of some form, an internal or
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external trigger. another election loss could have been that kind of trigger, and i think they kind of spread that type of propaganda if you will also helped them with the electoral victory. the question is what would happen if there was an economic downturn? many people in turkey say well, the only way we can get rid of erdogan is by economic crisis. i don't think that actually would work that way. i think that would hasten the process to a full authoritarian system and he would push back in a very oppressive way against any form of dissent. >> hi, everybody. i'm a senior research fellow for a nonprofit institute, and i know -- i guess a couple of you had touched upon this. but i just do want to good back and look from the eyes of the voters in turkey. try to understand why they gave
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the party and erdogan a resounding majority. i know part of it was stability. but was it all because they remembered the good times between -- i guess it was between 2003 and 2007 when things were going well. turkish economy was relatively growing. whoa was their reasons? what was the common reason, the anatolian tigers i guess i could say. why would they vote for the party and propel to it majority? thank you. >> i can start. i think the -- there is an assumption that democracy matters to a lot of voters. it may at some point. but i don't think it is necessarily the main concern. a colleague of ours spoke here a few months ago after the terrible mine tragedy in soma in turkey, he noticed that the akp swept the local election in
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soma. so he actually went there, knocked on 100 doors and asked people who did you vote for and why. and they all said we voted for the akp. this was an earlier election, but nevertheless. and he said well, why did you? he said look. i have a mortgage on my house. i have a mortgage on my car. i have a mortgage on my washing machine, and i have credit card debt. it goes back to bill's question as well. the indebtedness level and the credit cards that are u.s. pre-2008 crisis. people really are very fearful of this type of stability. and then if you look at sociological studies like in a recent interview, a renowned turkish social scientist talked about what is the composition of the electorate. and he said well, middle class is maybe 20%. and then he had a lower middle class, which are at least 40% of the vote. to these people, you know, you can do the math of what is their
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priority. and pocketbook issues will understandably have a much higher level of priority than issues of, you know, abstract issues of even presidential system versus freedom of the courts and so on. i think that's where you have to look for the reason. >> we're over time. maybe just one last question. >> hi. my name is stanley gonzalez. i'm a recent graduate of the school of international affairs. my question is how are these syrian refugees affecting turkey socially and economically, and do you believe that european countries specifically germany will send more aid to turkey to help with the refugee crisis to prevent more refugees from going to western europe? thank you. >> blaise? >> let me just say one thing. europe's easiest way to handle the problem is to write a check.
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>> i think what said earlier, europe is very much angela merkel made the bargain that they were going to look the other way on turkey's democratic violations, if you will, in exchange for turkey doing more to keep the refugees in turkey. and that turkey has done so at tremendous cost. i think the most recent estimate is $8 billion over the last four years. and also, with some social costs, you know, you have what are mostly sunni syrians coming into communities in southern syria, or in southern turkey. so there is definitely a cost there. but i think it's one that the europeans are willing to bear and are willing to try to get turkey to keep bearing. >> i think that brings us to the end of this very interesting discussion. i think what happens in turkey is very important for obviously u.s. strategic interests in that region. it's very important for the neighborhood of turkey as well.
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turkey was kind of the economic gross engine for some of the neighboring countries for years. and what happens in turkey impacts neighboring countries as well. particularly our region caucus in central asia. so we'll be watching this issue obviously. hopefully we'll have chance to bring you all back to discuss what happens in turkey next couple of years. and with that, i would like to thank our audience for being here this evening and participating and asking questions. and we'll see you all, at least some of you next week for our next forum on november 18th. thank you. [ applause ]
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>> the florida republican party on friday kicks off its sunshine summit with gop candidates for president. speaking to the gathering, marco rubio, ted cruz, lindsey graham, donald trump, jeb bush, ben carson, and mike huckabee. you can see them live on our companion network c-span starting friday morning at 10:30 eastern. and the summit continues saturday with more candidates. bobby jindal, chris christie, rick santorum, rand paul, john kasich, and carly fiorina. those speeches start at 10:00 a.m. eastern on saturday. american history tv. this weekend -- >> setting out boundary, political bound risks state boundaries, community boundaries for the future and for this territory going forward. >> lectures in history with
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professor carlton basmajian on the northwest ordinance, an act by congress to organize and govern newly acquired territory from ohio to the mississippi river. and our new series "road to the white house rewind." >> who is on what side? >> senior zip, the senior citizens against the kids? no, no, no, i missed. let them have it. oh, i see. >> i don't know if you rate it special or not. >> you all told me to sit facing the coke machine. that's what she said. i just do what i'm told. >> a look back at the 1992 presidential campaign of bill clinton during a visit to franklin high school in new hampshire. on real america, marking the 70th anniversary of the nurenburg trials. the 1945 u.s. army documentary on nazi concentration and prison camps. and continuing on oral histories. >> my outfit went over. it was a couple days after d-day when they had enough beach land to justify it.
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and my captain who was a new captain on that job came and said you stay here. and, again, it was one of those times when somebody reached out. and i was left. and off they went. and it was several days later. it was week or so later before i went across and rejoined my outfit. >> an interview with benjamin firenze, a former chief prosecutor for the united states. born in transylvania to a jewish family, emigrated to america. he reflects on enlisting in the u.s. army after law school and being assigned to set up war crimes branch to investigate nazi atrocities. watch american history tv, all weekend, every weekend on c-span3. get our complete schedule at c-span.org.
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the house foreign subcommittee in the middle east recently held a hearing on syrian refugees. witnesses from the state department, the u.s. agency for international development and the department of homeland security answered questions about humanitarian assistance, the refugees screening process, and instability in the region. florida congresswoman ileana ros-lehtinen chaired this 90-minute hearing. the subcommittee will come to order. after recognizing myself and [ inaudible ] who will read from mr. deutch's prepared statement, is that okay with you? that is good? oh, your own statement. i did not know. in his own words. sorry about that. for our opening statements, i will then recognize any other members seeking recognition for one minute. we will then hear from our witnesses, thank you, ladies and gentlemen, and without objection, the prepared statements of all of our
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witnesses will be made a part of the record and members may have five days to insert statements and questions for the record subject to the length and limitation in the rules. the chair now recognizes herself for five minutes. we are in the fifth year of the syrian humanitarian crisis. the united states has contributed over $4.5 billion in both direct assistance and through three u.n. crisis appeals with nearly 75% going through the latter, the crisis appeals. yet there seems to be no end in sight in this tunnel. russia's recent intervention is causing serious security concerns for not only the people of syria, but the ngos and aid workers on the ground trying to bring assistance to those in desperate need. the front lines are shifting and the battle lines are fluid, causing uncertainty and making it increasingly dangerous to deliver aid to certain areas and making it increasingly dangerous for syrians who remain in their
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homeland. the situation has gotten so bad that we are now seeing europe struggle to deal with its greatest migration and refugee crisis since world war ii, as many fleeing the syrian conflict are trying to make their way into europe. but while the european crisis may be grabbing the headlines at the moment, let's remember that this crisis was not created yesterday. for years, the people of syria have been impacted and the syrian refugee crisis has also impacted countries like jordan, like lebanon, turkey and egypt. and yet many in the international community ignored these countries' pleas for assistance. these countries are more vulnerable because they have less capacity and less resources to deal with the crisis. let's take jordan, for example. about 630 syrians have been registered by un hcr plus hundreds of thousands of more have already assimilated into
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jordan, all of which places an incredible burden on the kingdom to provide basic services to over a million new people. but with more and more refugees seeking to reach europe from syria and its neighbors, there will of course be those seeking to take advantage. we are now seeing smuggling networks popping up in turkey, lebanon, libya and elsewhere, turning trafficking in syrian refugees into a billion dollar industry, and also creating security concerns as we have no way of knowing who is being smuggled into europe and elsewhere. and with president obama's announcement that the u.s. will take in 10,000 syrians, this also raises concerns for many in the u.s., especially in light of the fbi director's testimony to congress last week that the u.s. may not be able to properly vet all of those seeking to come to our nation. as a legislative body, this is something that we must take seriously. if we cannot guarantee the proper vetting of these refugees it would be irresponsible for us to promote it.
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we must protect our country first and ensure that all security measures are in place to properly screen these individuals before they come into the united states. we cannot compromise the well-being of the american people or our national security. unfortunately, it has taken europe's worst migration crisis to awaken the europeans now that the syrian conflict is knocking on their borders. the united states has been the largest single contributor to the syrian humanitarian crisis response, dwarfing the contributions made by any other nation and by the european nations as a whole. there's no way to tell how things may have turned out differently had other nations stepped up to the call like the united states did. earlier this month, committee staffers traveled to geneva to meet with many of the organizations that receive our assistance for the syrian humanitarian crisis and from their trip, one thing was clear. the response to the crisis has
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been dreadfully underfunded, with a nearly two-thirds funding gap. of course, the problems we need to address are many and they are difficult. and it's true that there can never been a solution to the refugee crisis until the underlying root causes are addressed, and that means finding an end to the fighting, an end to the terror, and the removal of assad from power. but we need to be less reactive and start being more proactive. we need to start thinking of ways not just to address the refugees' most immediate needs, but the needs that they face in the years to come. and we can't do it alone. we need to press our european friends and our partners in the middle east and africa to step up and do more. we need to do a lot more to ensure that the needs of the host communities in syria's neighbors are being met as well, because this has taken a very big toll on their resources and it is leading to increased tension between the communities. there's a pervasive feeling of
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hopelessness and despair that will have long-term impact on the region and beyond. syrians for the most part want to eventually return home. according to some ngo implementing partners on the ground that have conducted surveys on this, some 90% of syrian refugees reportedly state they do have a desire to return home but that desire may fade if the international community does not step up and do more to ensure that there is a safe home for them to return to, and to demonstrate that we are working toward a better future for those who have been impacted so severely by the syrian conflict. with that, i'm pleased to yield to the ranking member of our subcommittee. mr. deutsch. >> thank you, madam chairman. i was anticipating having a conflict with today's hearing. mr. cicillini had agreed to step in. i'm proud to yield my time to
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mr. cicilline. he's been a leader on the issue of refugees, he organized the first member letter requesting that the refugee cap be lifted in the wake of the migration crisis in europe. i'm proud to yield to him. >> thank you, madam chairman and ranking member deutch for calling this hearing today and for your leadership on these issues. an thank you, ranking member deutch for yielding to mow. the crisis inside syria and the region is escalating. it has led to the largest movement of refugees through europe and the middle east since world war ii. as of september, an estimated 12.2 million people inside syria, more than half the population, are in need of humanitarian assistance. of these, more than 7.6 million are displaced inside the country. in addition, more than 4.1 million syrians have registered as refugees abroad with most fleeing to countries in the immediate surrounding region including turkey, lebanon, jordan, iraq, egypt and other parts of north africa. as we have seen in recent months, as those neighboring countries reach maximum capacity, more refugees are
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risking dangerous journeys across land and sea into europe. the united nations has declared the situation in syria a level 3 emergency in order to help facilitate mobilization of resources for the humanitarian response. but the distribution of relief supplies within the country remains dependent on guarantees from all parties to the conflict of safe and unhindered access of humanitarian staff. the international community of the red cross estimates that five million people within syria are located in places that they categorize as difficult to reach by relief workers. i'm extremely concerned about how the new russian bombing campaign is contributing to violence in syria, with reports that tens of thousands of people have been displaced in the past few weeks. syrian human rights organizations have documented cases of russian strikes on hospitals and medical facilities and a human rights watch report said that russian strikes killed 59 civilians on october 15th. with this renewed fighting pressure on syria's neighboring countries and by extension, europe, will only increase. as the weather turns colder, the situation for refugees on the
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move will only get more perilous. many host communities are overwhelmed. overcrowded schools, inadequate hospital services impacts on resources such as water all contribute to the burden of neighboring countries. the united states is the largest donor of humanitarian assistance to syria and the region. from fiscal year 2012 through september 21st, 2015, the united states has allocated more than $4.5 billion to meet syrian humanitarian needs. this money includes over $1.5 billion to ngos, the international federation of red cross and red crescent and other international organizations as well as nearly $3 billion to un agencies responding to the needs of conflict affected populations in syria and the region. yet according to un hcr, chronic funding shortages are greatly limiting aid programs for refugees and host communities in the region. since 2011 the un appeals have remained significantly underfunded and recently resulted in cuts to food aid and cash assistance. lack of assistance is reportedly leading to an increase in
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negative coping strategies such as begging, child labor, survival sex and increased debt. the world can and must do better. it's imperative that when we talk to our allies particularly in the gulf countries that we emphasize the necessity of meeting the humanitarian needs of these refugees. moreover, while the united states has been the leader in terms of financial response to this crisis, we have fallen short in absorbing refugees. jordan has absorbed half a million. lebanon, one million. turkey, two million. but since the 2011, the united states has taken in roughly 1500 syrian refugees. most of those in the past year. this is simply not acceptable. last month, as ranking member deutch mentioned, i led a letter signed by 70 of my colleagues asking the administration to raise that number to 100,000 syrian refugees by the end of 2017. there is precedent for this. the united states welcomed approximately 200,000 refugees during the balkan wars, 700,000 refugees from cuba, and more than 700,000 refugees from vietnam. while i was pleased that the
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administration raised the refugee quota for 2016 to accommodate 10,000 refugees from syria, i fear that isn't nearly enough to make an impact. of course, the ultimate accountability for the violence and chaos on syria and iraq falls upon the syrian regime of bashar al assad whose unspeakable cruelty towards his own people including the use of chemical weapons is at the heart of this civil war as well as upon isis. the only way to fully ease the suffering of the syrian and iraqi people is to defeat isis and bring an end to the civil war in syria. there is certainly no easy fix for this problem. but i hope that our witnesses today can tell us what steps the administration is taking to bring about a solution to this terrible tragedy and what more we can do. i thank the witnesses again for being here. thank you for the testimony you are about to provide. i yield back. >> thank you very much. mr. cicilline. would you like to add anything, mr. deutch? you will wait. thank you. mr. trott is recognized. >> i would like to start by
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thanking chairwoman roos let -- ros-lehtinen and ranking member for holding this important hearing. as the situation in syria becomes progressively worse, the need to deliver aid to affected people in a timely and efficient manner becomes even more important. we have learned throughout history that unfortunately, religious minorities are disproportionately affected during dire humanitarian crises. i'm proud to represent a vibrant district with various religious minorities from the middle east and one of the most common complaints i hear is aid is not getting to them quickly enough. in april i wrote a bipartisan letter to usaid with my colleagues in the michigan delegation asking usaid to consider removing bureaucratic red tape to help these battered communities. six months later my letter remains unanswered. while i understand that usaid is under pressure to ensure that every vulnerable citizen is taken care of, if our aid is not getting to these communities at the right time, our efforts are futile and the crisis only becomes worse. to better coordinate the various humanitarian relief efforts ongoing in the region i introduced legislation that would require interested parties
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to better coordinate with one another to assure timely relief to these endangered citizens. after spending 30 years in business, i know that the key to success of any project is cooperation and communication, not more red tape, obstacles, and excuses. i yield back my time. >> thank you very much, mr. troth trott. mr. boyle is recognized. >> thank you. i would just briefly say we face a real turning point in late august, ever since the shocking and horrific sight of a small boy's body being washed ashore on a beach in turkey. that really i think awoke the consciousness and consciences of many people. i was in europe at that time, as part of an international conference, and it clearly changed the dynamic in many western european countries that had not been stepping up to the plate to do their part. i would say that the size of the
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humanitarian assistance and i pre-read some of the testimony and i know we have had a three-pronged approach, clearly our humanitarian assistance has led the world. we are number one in that regard and should be quite proud of it. i think the question that i'm searching for an answer, that i really want answered and cannot at this point is are we going to continue to do a series of one-offs or will there actually be a worldwide collaborative effort to solve this problem. so in the hearing today, and many of the questions that are asked and answered, i hope we can spend a moment, take a look at the united states not in isolation but ourselves as part of a larger global solution. thank you. >> very good, sir. do any other members wish to be recognized? if not, i would like to introduce our witnesses who are three very good friends of our subcommittee. first, we are pleased to welcome back the honorable ann c. richard, who serves as assistant secretary of the bureau of population refugees and
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migration for the department of state. she has served as the vice president of government relations and advocacy of the international rescue committee and was a non-resident fellow for the center for trans-atlantic relations at johns hopkins university's school of advanced international studies. welcome back, ma'am. second, we are pleased to say hello to the honorable leon rodriguez, the director of the united states citizenship and immigration service. previously, mr. rodriguez served as the director of the office for civil rights at the department of health and human services and before that, served in the united states attorney's office for the western district of pennsylvania and was a trial attorney in the civil division of the department of justice. welcome, mr. rodriguez. and now we also welcome back a good friend, senior deputy assistant administrator thomas staal of the bureau of democracy
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conflict and humanitarian assistance at usaid. he has served in usaid since the late '80s and served as the director of the iraqi reconstruction office. mr. stahl also served as the admission director in lebanon, ethiopia and iraq. you don't have to be a good friend of the subcommittee to be a witness but we just have good witnesses. we welcome you back. thank you. ms. richard, we'll start with you. >> thank you, madam chairman. >> closer to your mouth. >> oh, i can bring this to me. thank you, madam chairman, ranking member deutch, distinguished members of the committee. thank you for the opportunity to appear before the house committee on foreign affairs to discuss the syrian humanitarian crisis. i returned recently from a series of meetings overseas, including my fifth visit to assistant secretary. i greatly appreciate the interest of this committee on this very challenging situation. i would like to briefly outline the steps taken by the population refugees and migration bureau and others at the state department, usaid and
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in the obama administration to provide humanitarian assistance to innocent civilians and to assist the governments of other countries to deal with the crisis in syria. as you know, in early september, and as congressman boyle just mentioned, the tragic photo of a little boy's body on a beach in turkey awakened people to the plight of syrian refugees in ways that years of grim statistics, bleak images and climbing casualty figures could not. what started as unrest in syria in 2011 has developed into a multi-front war and spilled over to become a regional crisis. recently, the crisis reached europe as hundreds of thousands of young men and women and sometimes entire families sought to reach that continent by boat, bus, train and foot. they were joined by migrants and refugees from other countries, chiefly afghanistan, airy yeah, and iraq. while the outflow of refugees to europe has garnered a lot of attention, it is important for
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us to remember and acknowledge that the vast majority of syrian families remain in the middle east. we just heard the figures in the opening statements of the chair ranking member that there are more than four million refugees in the surrounding countries and roughly seven million syrians are displaced within their own country. for more than four years, the obama administration has helped these countries neighboring syria and the innocent people caught up in the syria crisis even as we continue to play a leading role in providing humanitarian aid to people affected by conflicts in many other places. we have a three-pronged approach to the humanitarian aspects of the crisis in syria and the region. strong levels of humanitarian assistance, active diplomacy, and expanded refugee settlement. first, the u.s. government is the leading donor of humanitarian assistance to people in need inside syria, in the surrounding countries and to others caught up in crises around the world. through contributions to international organizations such as the u.n. high commission for
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refugees, the international committee of the red cross, the international organization for migration, the world food program, unicef, and leading nongovernmental organizations, u.s. funds are being used to save millions of lives. u.s. humanitarian assistance in response to the syrian conflict as you've said. totals more than $4.5 billion since the start of the crisis. it is made possible thanks to strong bipartisan support from congress. without u.s. support, more people would be making the dangerous voyage further north. even with our sizeable contributions, however, u.n. appeals for humanitarian aid to address the crisis in syria remain underfunded with only 45% of the needs covered as of october 2015. these shortfalls have had real consequences. cuts to food and other assistance was one of the triggers of the current migration of people to europe. syrian refugees in jordan, turkey and lebanon are losing hope of ever returning to their homes. they are unable to work regularly to sustain their families, rents are high and their children are missing out
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on school. roughly 85% of refugees now live outside of camps and that's something that's not well understood or known. we need to help refugees become self-sufficient while we also support the communities that host them. we are looking at ways to better link our relief and development assistance, and importantly, we are working to get more refugee children in school throughout the region. the second prong of our response is diplomacy on humanitarian issues. for several years we have engaged government officials in the region to encourage them to keep borders open and allow refugees to enter their countries, authorize the work of leading humanitarian organizations and allow refugees to pursue normal lives or as normal a life as possible. diplomacy on humanitarian issues means working constructively with other nations to find solutions. the issue of the refugee and migration crisis was taken up again and again in recent international fora, and in my testimony i talk about the
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places that i've traveled recently and the meetings i've had pursuing our so-called humanitarian diplomacy. diplomacy also includes pushing when needed those who can and should be doing more. we are engaged on encouraging countries that provide assistance outside the u.n. system to contribute to the u.n. appeals for syria. contributions to and appeals can help prevent duplication and ensure that assistance is provided to those who need it the most. we are also encouraging countries to promote refugees to pursue jobs and livelihoods. the third prong of our response is resettling refugees in the united states. as you know, for the past three years we've brought 70,000 refugees from all around the world to the united states. and for this year, the president has determined we should bring 85,000, including at least 10,000 syrians. we recognize that admitting more syrian refugees to the united states is only part of the solution but it is in keeping with our american tradition. it shows the world that we seek
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to provide refuge for those most in need, it sets an example for others to follow, and it adds to the diversity and strength of american society. i have been up on the hill a couple times recently and have gotten a lot of questions about the process that we use to bring refugees here. they are referred by the u.n. hcr. we work very carefully to have them tell their stories. no one comes who hasn't been approved by the department of homeland security. and leon rodriguez and i are here to answer any questions you have about the resettlement process, but it generally lasts 18 to 24 months and we take very seriously the need to secure our borders as part of that program. in conclusion, the vast majority of refugees of the 3 million who have been admitted to the united states, including from some of the most troubled regions of the world, have
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regions in the world, have proven to be hard-working and productive residents. they pay taxes, send their children to school and after five years, may take the test to become citizens. i'm happy to answer any questions you may have about this three-pronged approach and to provide details about our program. >> thank you very much, secretary richard. mr. rodriguez. >> madam chairwoman, ranking member deutch, distinguished members of the committee, thank you all for convening this very important hearing. when i first became director, in fact during the confirmation process, i knew that the work of operating the refugee admission process, particularly with respect to refugees from various parts of the middle east, but chief among them, syria, was going to be one of my priorities and one of the most important parts of the work that we did at u.s. cis. the statistics recited by the
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congressman tell a very grim story of what's going on in syria today. more than half of the population of syria is displaced. 4 million people are now essentially in exile somewhere in the middle east, be it jordan, be it turkey, be it lebanon, be it egypt. but the individual stories that we hear are probably the most compelling of all. recently one of my refugee officers shared with me a story of an individual who was screened and during the screening process, we learned that he was with his elderly mother during a time when his town was being bombed by the syrian air force. his mother, because of the stress of the bombing, had a heart attack. she ultimately died in his arms but not after hours, actually, of this young man attempting to
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resuscitate his mother through cpr, and having no access to medical care because of the horrendous conditions in that town. and this is one of legions of stories that we have heard at u.s. cis from the individuals that we have screened. i took the opportunity this past june to travel to turkey, where in istanbul, we have a resettlement support center where my officers work with a state department contractor to screen refugees and i observed both the screenings and i observed them incidentally with the particular eye that i bring as a former criminal prosecutor who has myself conducted thousands of interviews, many of them confrontational interviews, many of them interviews with individuals who i knew were lying to me. so i observed those screenings as they took place but i also had the opportunity to sit down with the families that were in that resettlement support center. what was amazing to me is how recognizable those individuals
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were to me, how familiar they were to me. they were individuals from all walks of life but they were individuals who really want the same thing that any of us here want. is to get out of harm's way and to find a better life for their family. i had the opportunity to spend a few minutes with the children at the resettlement center, to witness their excitement about their potential new life in america, to hear what they had already learned about our country and their excitement about coming here. so amidst that challenge, the men and women who work in a refugee admissions program do their job and that essentially involves their doing two things. one, making sure that the individuals who ask for refuge in the united states satisfy the legal requirements in order to obtain that refuge, but two, and importantly as the chairwoman noted, ensuring that none of those individuals who are
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seeking refuge in the united states are people who mean us harm. now how do we do that? part of that is done through a suite of biographic and biometric checks and i'm hoping during the course of the hearing to be able to explain in some detail as to how those work, but the key is we actually have screened out individuals who we identified through that process as being potential threats. so the process has actually worked. but two, as importantly, the refugee officers in our agency are among the most highly trained professionals in the federal government and they are specifically trained in country conditions to conduct interviews to screen out individuals who may do us harm. that process has also resulted in a number of people being placed quote, on hold, not permitted to travel to the united states until security concerns can be resolved. i'd hike to conclude by dedicating my testimony here
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today to my maternal grandfather, who i actually never had the opportunity to meet. my grandfather was one of the leaders of the jewish community in cuba in the late 1930s and 1940s and among his activities as a leader of that community was to attempt to assist refugees from nazi europe, some of whom had sought refuge here in the united states and were denied that refuge. many of us have heard the story of "the st. louis." and who then traveled to cuba. some of whom were able to find refuge there, but some of whom were not. i intend as director of u.s. cis to honor his legacy first and foremost by making sure that we don't admit people who do us harm to the united states, but secondly, by making sure that we honor our tradition of offering refuge to those who so desperately need it. thank you. i look forward to answering the committee's questions. >> thank you very much, mr. rodriguez. excellent testimony. mr. staal?
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>> madam chairman, ranking member deutsche and members of the subcommittee, thank you for your support and the attention today to the syrian crisis which grows, as we've heard, more complex every day. for almost five years, the assad regime has waged an unrelenting campaign of bloodshed that has decimated communities and allowed extremists to thrive. while the world's attention is centered appropriately on the perilous journey of syrians forced to flee their homeland, the refugees as we have heard are part of a much larger community that suffers under the weight of this crisis. over 17 million syrians, 70% of the country's pre-war population, are affected by this conflict with the majority facing daily attacks inside syria. indeed, half of all syrians are either dead or displaced from their homes. while more than 4 million them gone to neighboring
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countries another 6.5 to 7 million are displaced inside syria. behind these massive numbers, the children, just like our own, and parents like any parent would do anything and risk everything to keep their families safe. families inside syria face the painful ultimatum, if you stay, your child could be killed on the way to get bread. if you leave, you risk their safety on a dangerous journey across borders. we're doing everything possible in usaid to alleviate the suffering for families inside syria as well as those fleeing to neighboring countries. the u.s. government has been as we've heard the single largest donor to the syrian crisis and our partners fearlessly cross conflict lines amidst daily barrel bombs and shifting conflict lines to reach people in the regime in opposition and even in isil-held areas. today, they face an added layer of threat. russian aggression on syrian soil. several partners report that
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russian air strikes are driving new displacement and complicating access. one heroic partner told us he feels like every time he goes to the hospital that he manages, it's only a matter of time until it will explode. his hospital has been bombed by the way over 18 times by the syrian regime and recently by the russians. despite ongoing access and security challenges, we are reaching approximately 5 million people inside syria and another 1.5 million in the region every month with our humanitarian assistance. and this aid is saving lives and reducing suffering every day. usaid supports inside syria 140 health facilities and in fy15 alone we reached over 2.4 million people with health assistance. and we've provided access to clean water for 1.3 million people. we are the largest donor of food assistance providing 1.5 billion
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to date. we provide flour even to bakeries inside syria and support food vouchers for syrian refugees that have injected over $1.2 billion into the economies of the syrian neighbors. and separate from our humanitarian efforts, we helped to moderate -- we help moderate civilian organizations in syria to provide essential services, providing a lifeline to communities under siege. then also, our development assistance helps syria's neighbors, who are strained more than ever, to build more resilient public services to cope with the influx of refugees. with 2 million syrian children out of school, we are working to ensure that this entire generation is not lost to this this crisis. in jordan and lebanon, we are expanding public schools, supporting remedial programs, training teachers so that syrian refugees can thrive alongside their host community peers.
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we've upgraded water systems and hospitals to help the communities in jordan and lebanon cope with the increased demand. in lebanon, we are working with young people to decrease tension between host communities and refugees and help them find constructive solutions to common ends. these efforts, by the way, are possible thanks to the generous support from congress. nevertheless, we struggle to meet the escalating needs with stretched dollars. we're working closely with other donors to mobilize resources because we cannot meet the needs alone. certainly no amount of humanitarian assistance will stop the suffering. or stem the tide of refugees which is why a negotiated political solution is urgently needed. in the meantime, we are committed to saving lives, alleviating suffering and helping syria's neighbors to cope with the largest humanitarian crisis we have ever faced. thank you for your support and i look forward to your questions. >> thank you very much to our government agencies for the great work that you are doing
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under difficult circumstances. i'd like to yield my time to mr. shabbott of ohio. >> i thank the chairlady for yielding. i'll begin with you, mr. rodriguez. during a recent hearing before the house committee on homeland security, fbi director james comey stated that government background checks on refugees is limited to only that information which has been previously collected and stored in its database. given that isis has threatened to exploit the current syrian humanitarian crisis, what's being done to increase scrutiny and the thoroughness of security checks on those seeking refugee status in the united states? >> thank you, congressman, for that very critical question. we working together with the state department conduct a suite of biographic and biometric checks of individuals who are applying for admission. the biographic checks in fact
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occur before my officers interview the individuals seeking admission. one among the sources of the biographic checks are something called the inter-agency check which is hosted by the national counter-terrorism center. that database is populated from information from all kinds of law enforcement and intelligence sources and there is a constant and ongoing effort to feed that database. it is true as it has often been true in other places, that we do not currently have any meaningful united states presence inside syria. nevertheless, we do have as we always have had, the ability to gather intelligence information, gather law enforcement information, using a number of techniques and doing so in a number of places. as a result of that process, our officers in 30 cases were able to identify individuals who in
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fact, based on their showing up in the databases that i just described, denied those individuals admission. once we interview individuals, we also take fingerprints, we run those fingerprints against department of defense data bases, united states law enforcement databases, including both the fbi and also our own customs and border patrol. in those events where some individuals have encountered really the united states either military or law enforcement authorities at some point along the way, but very critically, congressman, is the interview process. i started my career as a street prosecutor in new york city. we had all the technology in the world, we could run fingerprints, we could conduct chemical analysis, but at the end of the day, criminal cases were made by new york city police detectives. the work that we do, congressman, i would suggest is similar. at the end of the day, the
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judgments that we make are the judgments of the men and women, the highly trained and highly prepared men and women that work in our refugee admission process. they are trained and briefed on -- at a great level of depth in country conditions within syria. in fact, the interviews that we conduct further populate our understanding about those country conditions and they use that knowledge, that information, to then test the information that's being given to them by the individuals applying for admission. as a result of that training, hundreds of individuals have either been placed on hold or denied admission altogether because that process of interviewing has identified problems with the account being given by those individuals. so we're going to continue to polish that process. we are going to be continuing to work to further access different sources of intelligence so that
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we can test individual stories against that information. >> thank you. i would like to get one more question. i just have a minute left. either miss richard or mr. staal. whichever one of you wants to handle it. why has the administration opted to channel aid for the humanitarian crisis through the united nations rather than through direct aid or ngos? would it not be more efficient and cost-effective to work directly with partners on the ground? either one of you that would like to take that. >> i can start. we do both. we channel aid through the best u.n. operational agencies, humanitarian agencies, and we also work with the top non-governmental organizations. we try to use all channels to get aid inside syria which tom is the expert on. our sense is that because the u.n. plays a coordinating role and reviews the requests from a whole span of agencies and puts together these appeals,
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it actually reduces duplication and makes sure that professionals who know what they're doing are responding with the aid. now, of course, at the same time, most aid workers are from the countries in which they are working. so inside syria, it's mostly syrians. in jordan, it's jordanians, et cetera. but at the top there are people who are quite seasoned who are involved in this. tom, do you want to add anything? >> yes, thank you. it's an excellent question. what we try to do is make sure we are using the most effective means and the organizations that can do the job the best in a given area. sometimes it can vary between different parts of the country. frankly, in the regime-held areas within syria the u.n. agencies are able to operate most effectively and most broadly into, you know, the far reaches of the areas. in the non-regime areas, we do
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work also somewhat with the u.n., but there we work more with international ngos. now, they in turn work through local organizations. that's a critical aspect you mentioned. it's difficult for us to work directly with local organizations just through the financial systems and oversight, but through our international ngo partners, they are able to work with local organizations. indeed, that's how they get there. including with like local councils and civil society organizations that really know the situation on the ground, have the best access. we actually have better reporting and oversight of our programs and our assistance than in many other countries. so even the gao and r.i.g. shows that our aid is getting to the right people. the nice thing about working with local councils is you are building some local capacity so that hopefully when the regime -- excuse me, when the crisis is over, you've got some local capacity to build up again.
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>> thank you very much. my time has expired. thank you very much, madam chair. >> thank you very much, mr. chabot. mr. deutsche is recognized. >> thank you. i will yield. >> thank you to the gentleman for yielding. undersecretary richard, if i could begin with you, can you explain, i recognize this is a complicated process but could you explain to us from sort of beginning to end how a refugee from syria might navigate the process, be admitted to the united states, how long that typically takes, where is the first contact, how many agencies are involved and have jurisdiction over this determination, and kind of just explain sort of the process, because people have sort of a mistaken impression they just show up and are admitted. sort of a better understanding of what that process is. >> thank you, congressman. the process lasts 18 to 24
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months. the refugees are identified as people who are particularly vulnerable in the places where they have fled, so i guess the process starts when they decide to leave their country, which is a very challenging thing. they cross the borders, they try to live as well as they can for a time. but they may come to the attention of the u.n. hcr or other aid workers who will then look at their case and see if there are certain characteristics about them that would make them watch what we're looking for. what we're looking for is that they have to fit the definition of a refugee, which is someone fleeing persecution for one of -- they have a well-founded fear of persecution for one of five reasons which is race, religion, nationality, political belief or membership in a social group. and we also, though, seek to bring those who are the most vulnerable people. so that might be someone who has been tortured or has a specific medical condition that makes it very hard to survive where they
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are. or people for whom there is never going to be a chance to go home again. the first contact then is really with the u.n. high commissioner for refugees. they refer them to us. they do not choose who become -- who gets admission to the united states. but they refer the cases they think are likely to fit what we're looking for. and then the process continues where we have a relationship with several resettlement support centers, rscs, in different places around the world where they will work with the refugee, the individual or the family and put the case together of how they became a refugee and make the case that they do actually qualify for refugee status. as part of that, they have a series of background checks and this picks up where leon rodriguez was describing the types of checks, the fingerprints, the medical
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background, the biographic history. until they get interviewed by the dhs officer who has traveled out to the field, usually in a circuit ride, and is interviewing people during the course of a day. for syrians it's three per day. and really double-checking several things. and they're trying to screen out people who are lying to us, people with a criminal past or people who are, of course, would be terrorists. so once that all has happened, and the final checks work out, they are scheduled, then to be brought to the united states. they are brought to the u.s., escorted by the international organization for migration. so that's two u.n. agencies involved. u.n. nkchcr -- >> if i could interrupt you. after they get to the united states, i understand the process, but that process you just described, is that any different than the process that
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was in place when the united states accepted 200,000 refugees from the balkans or 700,000 refugees from cuba or 700,000 refugees from vietnam? is it improved? is it the same? >> after 9/11, the security aspects of that program were tightened quite a bit. then again in the last couple of years. they spent a lot of effort to scrub the program, to make it as efficient as possible without cutting corners on security. and right now we're under direction from the white house to keep doing that, and keep seeing if we can speed up the length of the process without doing anything to undermine security. >> and this has been described by some as the most intensive vetting process in the federal government, interagency -- >> well, for any traveler to the united states. i mean, no traveler to the united states gets this kind of intense vetting. >> and are there any limitations, assuming you've had additional resources, director rodriguez or undersecretary
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richard, any limitations on your ability to do this for more refugees if you were provided the additional resources to do it, to go through this process? are there any other obstacles? >> i think this is -- it's always a resource question. and so right now, we have about 100 refugee officers. we have an asylum corps of 400 plus that we can draw from to supplement, they're trained very similarly or just about identically to the refugee officers. but these situations always require us to adapt to build to whatever the task is that's in front of us. and we've actually -- my agency's become very good, and i know prm has become very good at adapting when these challenges are presented to us. but does it put further stress on our resources? no question.
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>> just in talking about it, we knew that we can't change the numbers like a dial on a -- i don't know, do people make things with dials anymore? a dial on an old-fashioned stereo, because even if you were to get more funding to get more interviewers, they have to be recruited and trained before they're sent out. and then the conditions overseas kick in, which is some places where we had wanted to carry out interviews in the past are -- there are security concerns, and so we have to make sure we're not sending the officer somewhere where they themselves would get into trouble. but then also sometimes there's acts of god. we had to slow down bringing people from nepal last year after the earthquake happened this past year. so they have to be able to travel out to the places where the refugees are ready to be interviewed. and in the middle east, there have been security issues, same with a camp in kenya.
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and also there are parts of africa that are just hard to get to. you can't just fly in and flight out without careful planning. >> thank you. i see my time's out, i yield back. >> thank you mr. cicilline. mr. boyle? ms. frankle? >> thank you very much. thank you to the witnesses. and i agree with my colleagues here who have said that they consider this one of the great humanitarian -- probably the greatest humanitarian crisis of our time right now. so i just want to -- i want to get a couple things clarified. i got a little confused. on the refugees, it sounds to me, you say there are millions displaced within syria and 4 million displaced out of syria. what -- what would you -- how would you quantify the number of refugees that would like to come to the united states?
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what figure would that be? >> well, they don't get to come if they'd like to come to the united states. i think it's probably a very large number, but not 100%. because most refugees usually want to go home. >> no, i'm not saying that. i just want to know what do you think is the number. >> what the u.n. acr does is they believe that of 15 million refugees that they're concerned about, that about 1 million are people who are suitable for resettlement in other countries. >> so how does this come about? does someone leave syria in order to be considered by us? they have to -- and is there any type of prioritization, if you're a family member or first in line or first to sign up? >> it's who is -- first you have to qualify to be a refugee, and
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then the second -- >> what is the -- >> based on the legal definition which were those five factors. well-founded fear of persecution. and then we seek to resettle the people who are the most vulnerable, who -- >> which would be who? >> so it's widows with children or orphaned children or people who have medical conditions that make it very difficult for them to get the treatment they need in a refugee camp. people who are burn victims and can, you know, benefit from maybe, you know, the type of medical services we can provide here. you know, torture victims, people who, you know, feel that they'll never be able to go home again. they've seen terrible things happen. >> so if you're able to process someone, do most of these folks have somebody in the united states that they're coming to settle with? or they're just coming here on their own? >> if they have a family, if they have a relative in the united states, we seek to
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reunite the families. >> and if they don't, what, if there are services that -- >> what happens is when they arrive in the u.s., they're met at the airport by a representative, one of nine national networks we have. six are faith-based. three are not. but they work in 170 cities across the united states. and they use a lot of volunteers. they'll take the refugee from the airport to their new home, probably an apartment that's been set up for them, and it may have been furnished with donated furniture. and then they will make sure that there's a meal in the refrigerator. and show them how to turn on and off the lights. depending on where they're from some of the modern conveniences are new. and then the next day they take them to help get their new life started. and that could be using the bus, going to the grocery store, getting a social security number, getting the kids enrolled in school.
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>> and as to the usaid, your workers are not in syria, i think that's what you said? how many aid workers are dedicated now to syrian relief and where are they? >> that's correct. our aid workers are not inside syria. we have a team in jordan and another team in southern turkey. it's a disaster assistance response team. and then work with our implementing partners, ngos, u.n., who in turn have local partners who work inside. so there are no americans or international staff inside syria. >> and are the workers inside, is it basically food and medicine? >> it's actually quite a bit more. food and medicine are a big part of it. but it's also helping to repair water systems. even schools.
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we train teachers and help rebuild things. sometimes it's an underground school, you know, that's safe. working, building capacity of local councils. we work with -- we've trained hundreds and hundreds of first responders who are like the fire department in a number of cities. inside syria, they've been a huge thing. they're independent. they're volunteers. but we provide them training and even equipment. we've given, you know, like fire trucks and things like that. >> terrific. >> so we do a variety of things inside syria. >> madame chair, may i ask another question or wait for another round? >> please, go ahead. thank you, ms. frankl. >> i'd like to just -- if you all have an opinion, i'd like to hear what your opinion is of --
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what would happen if we were not doing this aid? and what does that mean not just to the humanitarian part of this which i think we all understand, but i think a lot of people what they don't understand is that a lot of this effort really goes towards our national security. because what happens, we're about to lose a generation of children, it looks like. and hopelessness breeds a lot of bad things. when the are but i'd like to hear it from your own words as to why your missions are so important. >> congresswoman, i'm convinced that, as i mentioned in my testimony, we're saving millions of lives with this aid. some of from it usaid is backing up the world food program that is feeding so many people, vaccinations that go to children that if they're not vaccinated makes them susceptible to really dangerous diseases. so there's a life-saving piece of this.
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but then there's the life-enriching part of it, too. and that's what i think you were getting at with our concerns about losing a generation of syrian children. many are out of school, have been out of school for years. to the extent that there are places in school, it's pretty tough for them, you know. if they go to turkey, they're living surrounded by a different language, turkish. but even in lebanon and jordan, they sometimes go to a second shift of school. where they're trying to catch up to where they would have been had they stayed in school throughout. too many girls are getting married young. boys and girls are sent to work early. so they're really missing out on childhoods, missing out on education. for those who are just left idle, they're really susceptible, i think, to bad influences.
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we see what happened when the rest of the world did not provide the funding to these u.n. appeals. i think, thanks to congress, we have done our share of funding. the u.n. appeals for the syrian crisis and many other crises around the world. but we weren't matched at the same levels by the rest of the world. part of it is because the number of crises have grown and the needs have grown. but you see what happened is when the world food program started to cut back on food assistance and vouchers, that may have played a role in triggering the numbers of people streaming out of the middle east and walking and taking dangerous journeys to europe. it is very destabilizing. it's destabilizing for the neighboring countries. it's destabilizing now for various parts of europe. and i think that that shows you that had we not been there, things would have been much worse.
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>> congresswoman, this is who we are as americans. but simply. my parents were refugees. from cuba. who were offered refuge, as was the chair. i would not be surprised if there are other stories of either being refugees or being children of refugees certainly in this chamber today. that has been our tradition as a country as far back as anybody can remember. when we talk about the importance of this work, it is certainly a humanitarian task we are engaged in. i think you've certainly painted very clearly sort of the scope of this problem. but it also promotes the stability of that region. for us to take responsibility for refugees and for us to lead
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by example, as far as other countries. it has been our history that we have always taken a disproportionate share of refugees. that has inspired other resettlement countries to do the same. and i would hope -- and i think it is certainly the president's intention -- that we continue to honor that tradition. >> if i might add as well, my colleagues have stated very eloquently, but i think it's important even to realize notwithstanding the scale and scope of this crisis, there has not been large famine or major disease outbreaks, things like that, which would have been very likely without our assistance. and so it's been amazingly successful, actually, given the constraints that they actually have to work with, both inside syria and in the neighboring
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countries, and that's something to remember. thank you. >> thank you very much. i yield back, madame chair. >> thank you very much, miss frankl. miss ming is recognized. >> thank you, madame chairwoman and reigning member deutsche and to all our witnesses for being here today. as the weather gets colder, as winter approaches, how are our partners, implementing partners on the ground, helping to prepare winter for the refugees and displaced persons? >> i could begin the response especially within syria, that's been the major focus of our efforts in addition to basic food and health supplies. we've been focusing over the last month or so on providing things like blankets and coats and, you know, additional supplies for the winter, wherever we can get it in. that's why it's important for us to work throughout the country, wherever we can.
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either in regime-held areas or opposition-held areas, as long as we can be sure that it gets to the right people. that's been a major issue for us inside syria and the refugees as well. >> thank you. >> and how are we supporting our european allies and what more can we do as they absorb the large influx of refugees and how can we urge companies that have made pledges of humanitarian aid to fulfill those commitments? >> well, we are responding to the appeals put out by u.n. hcr and the international organization for migration, for their activities in europe. they're really focused on the periphery of europe, so to speak. so, serbia, macedonia, greece. part of what they're doing is
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trying to make sure that as people approach borders and cross borders that they're treated humanely, and not as criminals but at people who deserve a hearing to determine whether they deserve asylum or not. and people who need help along the way. so that's a piece what was we're doing, but it's nowhere near the size and scope of what we're doing close tore syria in the region. the other thing we're doing is we're participating in international conversations with the european leaders. we did that in new york at the u.n. general assembly. i've met with everyone from the german foreign minister to the swedish foreign minister to the lebanese foreign minister. we're talking to them, asking what do you need? what can we do to help you? one of the proposals is that we
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try to do a better job internationally, pulling people together to do more. not just in terms of money, which is part of it, but certainly in terms of resettlement, work visas, family unification, humanitarian visas, trying to get permission for refugees to work in the places to which they fled. trying to get kids in school, trying to get development assistance also tapped to help governments like lebanon and jordan whose societies are really strained for trying to do the right thing. so that gives you a little flavor for the kind of international diplomatic exchanges we're having right now. >> thank you so much, miss ming. mr. deutsch? >> thank you, madame chairman. i appreciate it. thanks assistant secretary richard for being with us again today.
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we appreciate your willingness to keep a dialogue with the sub committee. i've been clear where i stand on the need for increased humanitarian aid, the support by our allies around the world. attention, the need for action in syria. and the need for real and serious discussion on the practicality of a safe zone. i hope that we'll have that conversation. today i want to take advantage of director rodriguez's presence to explore the refugee process. i appreciate what you've shared already. i'll tell you, i've written to the chairman of the judiciary committee, asking for a hearing on this topic as well. perhaps we'll have the opportunity to delve into these issues further there also. so i'd just like to walk through a few questions. you talked about uscis' role in the u.s. refugee admissions program. you talked about the interviews to determine who's eligible for refugee status. you said that refugees, applicants for refugee status are interviewed in person. who's responsible for
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conducting those interviews? >> sorry. those interviews are conducted by refugee officers who are part of our refugee admissions program. >> and what -- i know you talked about the way cases are solved. can you talk about the role of these refugee officers in adjudicating the application for refugee status? >> so i think the way to describe that role is first to talk about both their -- the training and briefing process that they take into the -- so they all participate in a five-week training course as officers followed by a specialized training course as refugee officers. once we know that they're going to be deployed to a particular environment -- let's use the case of screening syrian refugees -- they receive a specific eight-day briefing prior to their deployment.
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the purpose of that briefing is to steep them in the country conditions that are applicable to the country from which these individuals are coming. and those country conditions consist of all the things that you would think. in what part of the country is isis dominant, what are the country is isis dominant, what are the specifics of what's going on in a char province, and much more that would really be difficult to talk about in a public hearing. but i think you get the sense of the kind of content with which they are briefed. >> and how many of them are there? how many of them have been trained to deal with syrian refugees? >> in total there are 100. i don't know specifically how many are trained. what i will tell you is that, for example, in istanbul at any time we'll have deployed a team of either five or ten, depending how many cases are actually ready for their interview. >> and are there specific
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security checks that have been instituted specifically for syrian applicants? >> it is the -- the syrian vetting is the most intense vetting that we conduct. i talked about the interagency checks. >> which agencies are consulted? >> a number of intelligence agencies, a number of law enforcement agencies are populating the database that we use for the information check. including specific databases that identify individuals who may be terrorists. >> and while their application is pending, where do they reside? >> they may reside in desk -- depending on where they are. a lot of that depends on where they are. they could be in refugee camps. a large number of them are. in certain cases -- >> they're abroad? >> they're certainly not in their country and they're certainly not here in the united states. >> the refugee ceiling over the
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last three fiscal years has been 70,000. would they be able to conduct these extensive security if the cap were raised to 85,000? >> absolutely, congressman. we do our job no matter what. >> if it were raised to 100,000? >> as i said, congress man, we will do our job. we understand how critically important it that is we absolutely do our job and leave no stone unturned when it comes to conducting these security checks. when we will not cut corners. >> you say hundreds have been placed on hold or denied altogether. do you know what those specific numbers are? >> i apologize. i don't remember them right now. i usually have them at my fingertips. but i certainly can provide them to the members. >> if you would. finally, i want to thank you for the work that's being done and thank you for the testimony here today to help provide some much-needed context and to push back against some of the statements that have been made wholly without any factual basis
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about the review that's done, the extent of the review. i think without a full or in many cases without any appreciation for the efforts that are undertaken every day to go through this refugee process and to contribute to our nation's safety. you said in your opening testimony that it's important to you to honor our tradition of offering refuge to those who desperately need it. i agree. and i thank you sincerely for the work that you do. >> thank you, congressman. >> amen. how touching to dedicate this program, in your mind, to the legacy of your grandfather. very touching. >> thank you, chairwoman. >> mr. connelly of virginia is recognized. >> thank you, madame chairman. and welcome to the panel. miss richard, with 12.2 million syrians within syria who are in need of humanitarian assistance,
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we've got, in a country with 4.5 million people in lebanon, 1.1 million syrian refugees. in jordan, 10% of the country's population are syrian refugees. equivalent. to what extent are we concerned about the destabilizing effect of long-term refugee presence in small, delicate countries in the middle east region? >> thank you for your question. we're very concerned about it. it's one reason that we are very often in discussion with these government officials in those countries. we have a very strong aid program in jordan that is stretching now to do more to help the communities that are -- have taken in all these refugees.
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i've been very influenced by the high commissioner for refugees who's visiting washington just now and tony gutierrez who really believes that this required more than just relief to the refugees but also requires help to the communities whose hospital beds are filled, whose schools have gone to second shifts to accommodate syrian children, whose water systems are straining, water and sanitation systems. on a municipal level, there's a lot more people there in both jordan and lebanon. i mentioned that i recently came back from jordan. that was my eighth visit in the three and a half years i've been assistant secretary. so we have a very close working relationship with them. in lebanon i had met with the prime minister when he was in new york in september. he'd met me several times before so we have a good conversation there. we're particularly interested in doing two things. one is making sure that these
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development resources come into these countries, whether it's from usaid or the world bank and multi-lateral mechanisms. and then the other is to make sure that children get into school. because we think that's one of the most worrisome things right now. is that there's a whole generation of syrian children who are out of school and, you know, in danger of being unskilled and at loose ends. >> do we have an estimate of the total population of syrian refugees that will need to be permanently resettled? that are not going to be going back to syria? >> i don't think we have an estimate of that. it's very much done on a case by case basis, and we work with the unacr to identify the most vulnerable cases. they sought to -- starting in september 2013, they started to look at targeting a certain
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number of syrians. it's now up to 130,000 syrians as a goal. and they had referred 20,000 of that number to us. and in recent months it's climbed to 22,000. the u.s. will probably end up taking most of the syrian refugees who are referred for resettlement. but we are also trying to convince other countries to also do their share. >> right. and i want to get to that. the number we decided, the president announced, is 10,000. is that not correct? >> that's correct for this fiscal year. >> how do we arrive at that number, based on what? >> we had been planning to bring between 5,000 to 8,000 and the president pushed us to stretch and really gear up to take more. and that's drk you know, makes sense as we're adding 15,000 refugees to our overall ceiling.
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and the number the following year we haven't determined because, in part we want to see how we do this year or in the first half of the year in getting more syrians to the united states. >> what progress are we making impressing gulf partners boat to accept refugees and to help finance the humanitarian services that are so desperately needed in jordan, lebanon, turkey, and elsewhere? >> i would say our scorecard on that is very uneven. it's very uneven. we've seen how kuwait has held three major pledging conferences for the syria crisis, and they themselves provided hundreds of millions of dollars several years running. and followed through on their pledges. but not all of the gulf states do that. some give very little. some give a little bit and -- pledge some and then don't
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follow through. the uae, in addition to kuwait, has done several hundred millions of dollars. in general, none of these states resettle refugees. they are permitting syrians to come and work in their countries. so that's one way that they are sheltering syrians and their families but that's normally a temporary situation. >> and a drop in the bucket. in terms of numbers. >> we need more. >> madame chairman, my time is up. thank you. >> thank you so much, mr. connelly. mr. roar rorbach of california. >> so when we're talking about this great challenge that we face you're saying that these oil-rich gulf states aren't bringing people in as guest workers. do we know what magnitude that is? how many people we're talking about? >> i don't have those figures. >> 5,000, 20,000, 50? >> we'll get you that information.
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what happened was in the last month in september with the europe migration there's been a lot more criticism of the gulf states and then some of them pushed back and provided more information than we had previously had. >> how many migrants do we know of that have gone into europe in the last 18 months? >> it's hundreds of thousands, upwards of 600,000. >> upwards of 600,000. >> with more expected. >> and we don't know if the gulf states have even brought in 10,000 people. >> i probably should know but i don't know today. sorry. >> i appreciate that. we're talking about bringing in 70,000, is it, or 75,000 here to the united states? >> the past three years we've brought 70,000 refugees from all around the world to the united states. last year, we brought 1,700 syrians as part of that 70,000. >> 1,700 out of 70,000? >> that's right. and then for this year we intend
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to bring 85,000 refugees to the united states and 10,000 syrians. >> where are the rest of the refugees from, by the way, the other countries? >> the top countries they're coming from are iraq, burma and somalia. >> okay, iraq -- >> they come from 67 different countries. >> how many are coming from iraq? >> i have that. i can tell you that. so 12,676 came from iraq at the fiscal year that just ended september 30th. >> 12,000. now of these people -- one thing we've noticed that the migrants coming into europe, we have just seemed to notice that they seem to be very strong young men. >> that's right. >> who are virile and muslims. leaving this muslim part of the
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world to go into this other part of the world that's not a muslim part of the world. and they're getting away from conflict and they're going there. is there any -- let me ask you this. of the people that we are bringing in, are they going to be muslim men, like are going to europe or is there some way that we are trying to see that we have a better definition of refugee, helpless people who are in need rather than bringing more muslim men into the united states and into western europe? >> well, of the 1,700 that we've brought, only 2% were young men, you know, young adult single men. of course, we bring men. we bring families. we bring families that have had terrible things happen to them.
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i would question, i guess, some of the thinking behind your statement about the young able-bodied muslim men walking to europe. i think the reason they're able to walk to europe is because they're able bodied, and i think the reason they're going is because they've lost hope in the places they're living now, in being able to finish their educations, have an education or have a job and earn some money and support their families. >> when we see pictures of thousands and thousands of young muslim men, in western europe, one thing has to be a priority. we want to help refugees whose lives are in danger. that's our moral stand here. this is what makes us america. we care about people who are in danger like that. when you're talking about the people that i've seen are military-age people. if they are against radical islam, they should be there fighting radical islam.
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and i hope that -- let me ask you in terms of religion. of the people who are here, of the people who are coming, we know that the christian community in syria, in iraq, in that part of the world has been targeted for what most of us would consider genocide. they take the christians out and just massacre them. sunnis and shiites kill each that's pretty clear. it's hard to -- christian community has been targeted for extinction. should we not then try to prioritize so that we take care of those people who are targeted for extinction rather than just people who are caught up in a horrible situation? >> all right. three very quick points. one is that the muslim men going to europe, some of them are trying to avoid being drafted
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into assad's regime, into his army. and so i'm very sympathetic to them for that. second, europe is, in history, primarily christian. but today there are already muslims already thriving throughout europe. i assure you, congressman. and, third, we do agree with you that the christian community is being targeted, particularly by isil. as the high commissioner reminded me today, the one most targeted, most vulnerable are the azid difficuy and are not c and are considered not of the book and are more miserably treated and murdered and raped. so we agree with you that this qualifies then refugees who have fled because they are christian or other ethnic religious minorities as particularly vulnerable. and it does help them put their
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case together that they should be particularly helped. and also -- >> i would hope that we give priority to christians and other people who have been actually targeted for their faith. and also whatever we have to say about assad trying to murder those people, who would create a more democratic syria, he did offer safe haven to christians for a long time. that's at least one thing we need to recognize. if christians community in the middle east is, indeed, being targeted for genocide, we need to understand that. we need to target that and we need to act with that part of the assumption of what -- how we're going to handle this great humanitarian crisis that we now face in the middle east. thank you for doing your part. god bless you. ready to work with you. >> thank you very much. mr. rodriguez, i wanted you to have another opportunity to walk
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us through the vetting process. this hearing is being broadcast through c-span3 and then they will view it. they will run it a few more times. so maybe some in the television audience have not had a chance because they just plugged in now, to talk about -- to hear you talk about how the vetting process that you have in place, how secure you feel that is, how comfortable you feel that there is the existing security screening process that we have, is able to identify potential extremists and threats to the united states. if you could, walk us through that process about what your department is doing. >> thank you, chairwoman, for that opportunity. and undersecretary richard actually did a very nice job of walking through the broader process which, of course, starts with the first encounter with the united nations high
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commissioner on refugees, then they go to resettlement contractor that works with the department of state. that begins the first part, two of the first critical parts of the vetting process, which is unhcr itself conducts an interview of the individual in order to determine whether they're stating a refugee claim. that's information that we receive. and then later on becomes part of our interview process. the bio graphic checks, basically based on the pedigree information, if you will, that's given to us by the applicant's refugee status are tested against three important databases. first is the counselor lookout database, which is maintained beity state department and essentially describes people who have been encountered during the counselor process. in some cases, we look to the fbi to give us something called
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the security advisory opinion, which again looks to a series of sources that are both law enforcement and intelligent sources, but most critically for this particular population is the third of the databases that i mentioned, which is the interagency check. that interagency check queries against the number of law enforcement and intelligent sources in the community that's working in partnership, national security council, national counterterrorism center, the state department, us. we are in a constant process of thinking about how we further strengthen those sources. not just to vet syrians, but to vet anybody else, be it iraqis, afghans, somalis, as the case might be. so as i indicated before, that process just in the syrian case has identified 30 individuals
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who just, as part that have process, were identified as having derogatory history, were denied admission at that point. we then get to the point where our officers conduct the interviews. so by the time they're doing that, they have the benefit of the interview that's already been conducted by the high commissioner. they have the results of these checks. but very critically, they have not only their own deep understanding of the country conditions about which they have been briefed prior to deployment, but they also have their experience in interviewing individuals. so through that, they also gain a lot of depth of understanding of what makes sense, of what adds up, what's credible. and so through that process, they're making decisions about whether people will, in fact, move to the next stage or whether, in fact, there is a problem with the account they're given.dmeah sometimes that problem could be a contradiction between what they're saying during the screening interview and what
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they told the high commission. sometimes it can be completely inconsistent with the country conditions that we know. we often nominate that information to be part of intelligent databases because we get information that is then used to deepen our understanding of what is going on, whether it's in syria or somewhere else. of course, that then fortifies the work that we're doing in the future. is the process risk free? there is no risk-free process. are we doing the absolute best that we can, practically with the resources? are we giving our folks the best training we can give them? are we using the best intelligence resources we can get our hands on? the answer to that is absolutely yes. >> thank you very much. ms. richard and mr. stall, i wanted to give you an opportunity in case you had any concluding statement that you would like to make.
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>> you know, you'll notice we all said we're able to do this with the bipartisan support of congress. we actually say that to people in other countries, too, and explain to them that no matter what they hear in washington, this program has actually benefited year in and year out from bikamcabicameral, bipartis support. it's my desire to keep it that way i appreciate both of you sticking this out to the end here. and your help to help us to keep it that way. because i think there is a risk that as we bring more people and as there's more press attention to the program and attention during a presidential campaign season that people could start misinterpreting the goals of this. this is an american program. it's a fine american tradition. i think most americans should take pride in both our overseas humanitarian endeavors and our domestic ones.
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thank you, in advance, for the help you're giving us with your colleagues to continue the strong support we get. thank you very much. >> thank you to all of you for the great work that you're doing. mr. stall? >> yes, thank you very much for holding this hears and also for identifying that it's not only the syrians themselves who are suffering but the countries and the region and the importance of maintaining their stability but also their ability to absorb these additional refugees and people. and that's a critical part of the resources that you provide us. not only the humanitarian side but even the development dollars are providing assistance to this crisis. and, of course, at the end of the day, though, no matter how much we do on the humanitarian side, that's not going to resolve the problem. that's not even going to stop people from going to europe. it's resolving the political issues and getting a solution there.
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that's what we all hope for. thank you very much. >> amen. thank you very much. we look forward to having you back with us in a few months time so you can update us on the progress you have made. thank you very much. with that, our subcommittee is adjourned. thank you.
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the florida republican party on friday kicks off the sunshine summit with gop candidates for president. speaking to the gathering, marco rubio, ted cruz, lindsey graham, donald trump, jeb bush, ben carson, and mike huckabee. you can see them live on our companion network c-span starting friday morning at 10:30 eastern. and the summit continues saturday with more candidates. bobby jindal, chris christie, rick santorum, rand paul, john kasich, and carly fiorina. those speeches
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democratic representative jim mcdermott from washington state. "book tv," television for serious readers. british foreign secretary philip hammond talked about energy and climate change policy at the american enterprise institute. he also highlighted the efforts of the u.s. and the uk. this is 35 minutes.
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thank you for joining us. few quick words about our guest. mr. hammond is a secretary of state for foreign and common wealth affairs. he was elected a conservative member of parliament in 1997 and has previously served of secretary of state for transport of security and state and defense. he's had a business career in small and medium-size companies. from all over the uk economy. we're delighted to hear his remarks about conservative approaches to how we can understand the climate and energy situation. we're also delighted and honored to have with us sir peter west no cot, the british ambassador to the united states. with this we welcome our friend from the uk, the right honorable fiphilip hammond.
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>> thank you very much. i'm delighted to be here at the american enterprise institute. you can rightly regarded as one of the most influential think tanks. the work that you do here has a real world impact. papers become policy in republican and democrat administrations. i also welcome the aei board members who are here today. the fact that so many influential and busy individuals regularly take time to come in here not only from external speakers but lrs from a we i scholars is testament to your reputation for high-quality and relevant work. i haven't come here by chance. i've come here by choice because i want to make an argument to a conservative audience. first, that it is wholly consistent with conservative values to tackle the challenge of climate change and, second,
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that those conservative values can show us how best to deal with that challenge. as i said in my speech in boston last year for too long we've allowed the debate about climate change to be dominated by purists and idealists, many of whom operate on the left of the political spectrum who actively promote the notion that they and only they have the answers to the climate challenge and that we have to sacrifice economic growth and prosperity in order to meet it. i reject those arguments. i reject them, first of all, because wanting to protect the world we inherit, to pass it on intact to the next generation, is a fundamentally conservative instinct. as long ago as 1988 former conservative prime minister margaret thatcher said, and i quote, the last thing we want is to leave environmental debts for our children to clear up. no generation has a free hold on
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this earth. all we have is a life tenancy. i do to the accept that we have to choose between our future prosperity and safeguarding the future of our planet. this is not a zero sum game. as conservatives, we choose both. the starting point for any discussion on climate change must be the threat it poses. now of course no one is 100% certain of every aspect of the science. no one is 100% certain of the precise effects of man's activity on our climate. but the evidence in favor of taking action to curb carbon emissions has been steadily mounting for decades. uncertainty about the exact effects of climate change or the role of man's activity in delivering it is not an excuse
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for inaction. in every other facet of life we assess the risks and where the risk of occurrence is high and the impacts are potentially catastrophic we act to mitigate and to prevent our approach to climate change should be no different. that is exactly the precautionary approach that president reagan took decades ago when the world faced a similar challenge. in the 1980 tz majority of the world scientists were deeply concerned about the environment. in that case about the depletion of the ozone layer. there were some daughters but president reagan concluded the risks of doing nothing were too great. it was a core part of his conservative principles to take bold action when necessary. he displayed leadership, galvanizing business and the international community to agree what became the protocol, to phase out the use of damaging cfcs. president reagan described it as a magnificent achievement and he
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was right to do so. we now know the worried scientists were right and as a result of the protocol the ozone layer is now recovering. i recognize the concerns of those who worry, that the cost of tackling climate change will prove too great, that the attempts to do so might ruin our economy. this is a reasonable concern. if it really was a choice between economic growth on the one hand or lower greenhouse gas emissions on the other, then i, too, would be cautious. but i shall argue that it is not. in doing so the first thing i need to stress is that the cost of doing nothing is not nothing. nearly a decade ago the then uk government commissioned a review by one of our leading economist, nicholas stern, to ask what the cost of doing nothing might be. that recrew estimated that it could be a equivalent to losing
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20% of global consumption. since then, as our knowledge has developed, we've come to see this as not only an underestimate but also a narrow way of looking at the problem. many of the losses caused by climate change could be irreversible regardless of our resources. unchecked climate change, enunthor the most likely scenario, could have catastrophic consequences ari arising global temperatures similar to the difference of the last ice age and today, leaving in turn to rising sea levels, huge movements of people fueling conflict and instability, pressure on resources, and a multitude of new risks to global public health. the worse case is even more severe, a drastic change in our environment that could see heat stress in some areas surpass the limits of human tolerance leaving the leg again si of our
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generation a more dangerous world for our children and our grandchildren. so the costs of doing nothing are potentially catastrophic, beyond anything that can easily be quantified in economic terms. but even that argument would be vulnerable if the immediate cost of taking the necessary actions was economically ruinous. so the second thing we need to consider is what really are the costs of the necessary action. and we should be honest. we should not pretend that acting on climate change does not involve hard choices. even as the economy as a whole has more to gain than to lose from embracing the low carbon agenda there will be losers. some sectors, particularly coal, are in for a difficult time. we will need to think carefully about how we manage the impact on communities that are dependent on these industries for generations. their contribution to our
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economies has been a great one and we should not abandon them now. however, the more we learn the more the evidence is shifting in favor of action because that evidence is showing that many of the measures to reduce climate risks will, in fact, stimulate economic growth. our experience in the uk bears this out. we've already reduced our emissions by more than a quarter since 1990. and over the same period of time our economy has grown by more than 60%. just last year we registered a reduction in the carbon intensity of our economy of more than 10%, the steepest drop achieved by any country in the last six years. at the same time, we have the fastest economic growth rate in the g-7. not only that, but the growth in the low carbon sector of the u.k. economy is now outpacing the growth rate of the economy
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as a whole. in the uk firms engaged in low carbon goods and services employed over 460,000 people and contributed 45 billion pounds to the uk economy in 2013. this is an increase of almost 30% in just three years. on the global trends are in the same direction. the global low carbon economy is already worth 6 trillion u.s. dollars and is growing at between 4% and 5% a year. in 2013 auditions to the world's renewable energy generating capacity exceeded those to the fossil fuel capacity for the first time ever. and the price of renewable generation is falling fast. the price of solar panels has fallen by 80% since 2008 and the price of wind turbines has fallen by more than a quarter since 2009. this is increasingly allowing these energy sources to compete
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on cost with fossil fuel power generation without the need for subsidy. our businesses in the uk are looking at these trends and they are telling us that we should be a leader, not a back marker. that we should be at the forefront of these developments, taking advantage of the opportunities. the final argument tackling climate change that i want to address today is the argument that if we take action it will put us at a disadvantage to competitors who don't. again, this is a perfectly reasonable concern. but with countries representing 85% of the world's emissions signed up to national contribution targets ahead of cop-21 in paris the reality is all significant potential competitors are now headed in the same direction. but in any case the uk's experience so far is that a robust climate policy, even
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during a period when others have been uncommitted, has had no noticeable impact on our overall competitiveness. businesses remain attracted to the uk's openness to investment, flexible labor markets, and highly skilled workforce. in fact, it is increasingly clear that the economy of the future will be a low carbon economy. studies suggest that by stimulating greater innovation and efficiency, climate policies will increase our economic competitiveness. two weeks ago i was in the united arab emirates giving a speech on climate change, as it happens. they have the world's seventh largest reserves of gas and oil. despite this, they are already planning for a future without hydro carbons. they're investing in some of the world's largest solar power plants and are at the forefront of innovation in technologies such as high efficiency solar
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powered deceleration. and this is not only happening in the middle east. china is now the world's leading investor in renewable energy. in the next five years alone, it will add more wind power than the entire generating capacity from all sources of the uk. china has efficiency standards for its vehicles similar to those of europe and america, and woe the chinese official who makes the test and increasingly planning in cities y s ties to carbon and resource efficient. seven regions of china are already putting a price on carbon and in another two years this will have spread to cover the whole of the country. so in summary, the world is moving towards a low carbon economy. i would suggest that there may now be more risk in being left behind than there is in taking the lead. the threat is great and the
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costs of dealing with it are now manageable. but the question remains, how best to respond to the challenge. what are the appropriate mechanisms, what are the conservative solutions, how best can we tackle the principle cause of climate change, carbon emissions? of course, there are those on the left who have seen the need for action on climate change as a justification for large-scale mobilization, for a regular tree bonanza in the bigger state. and if a purery regulatory approach was the answer, i have no doubt that economic growth would suffer. but it isn't. the answer, as even the chinese have realized, is to harness the power of the marketplace, to let the hidden hand of market forces loose on the challenge we are facing and watch it deliver solutions as it is delivered solutions to every other problem
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we have faced and resolved in our history. we should be well placed in this regard. free markets have shaped both our countries. new york and london host the world's two most important stock exchanges. lon do, new york, chicago, the world's most commodity exchanges. it's my confidence in markets that drives my approach to the economics of climate change. in the uk we've placed a price on carbon. this is completely in line with conservative economic values. a carbon price corrects a market failure but we've allowed co-2 emissions to be a free good to the polluter even though they impose costs on society. with any other waste, we pay for it to be taken away. we do not let people just dump it on the street. moreover, a market solution is
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simple and gives business the certainty that they're asking for. alongside 70 governments, over 1,000 businesses signed a deck clar race ca clar rags calling for carbon prices. rather than wait for government many businesses are taking matters into their own hands by bringing in an internal carbon price to guide their investment decisions. the number of multi-national businesses taking this approach has tripled over the past 12 months, tripled. even oil companies including bp, shell have come out in favor of carbon pricing. major u.s. companies that either already use internal carbon pricing or intend to introduce it within the next two years include google, microsoft, american express, coca-cola, monsanto, walmart, and yahoo!. fundamental to a market-placed approach is letting our entrepreneurs and our innovators show the way.
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your organization is dedicated to preserving and strengthening the foundations of a free society, including competitive private enterprise. i agree whole heartedly with that aim. far too often business is cast in the role of villain when it comes to climate change. but as margaret thatcher -- you know i'm a british tourry because i keep quoting her. as she said in a speech to the general assembly back in 1989, we must resist the simplistic tendency to blame modern multinational industry to the damage which is being done to the environment. far from being the villains, it is them on whom we rely to do the research and find the solutions. and she could have added, make the investments. and again, the uk and the u.s. are well placed to lead. we have some of the most innovative businesses and our
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entrepreneurs are already leading the way. for example, uk firms build more formula 1 racing cars than any other country. they're pushing the found boundaries of technology to harness the energy from braking and release it back into acceleration through electric motors. the u.s. firm tesla is leading the world in developing battery technology for road cars and increasingly for homes, too, giving them independence from the grid and moving us closer to the time when renewable generation is matched by effective storage to give around the clock access to renewable power. we have the best research institutions in the world. if you look at a list of the top universities in the world you will find that last year all of the top ten were either british or american. by the way, we think that the 4-6 split, uk-u.s. is reasonable given your population is five times ours. the u.k. leads the world in
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offshore wind energy. we've stored more capacity than any other country in the world and this is increasingly creating jobs as firms export their products and services. meanwhile, companies such as google are leading in developing the big data capabilities which will allow the supply and demand for energy to be matched more intelligently, reducing wastes and costs. i believe that our countries need to accelerate the pace of innovation in all of these technologies. in particular, we should focus on crossing the critical frontier of large-scale, high efficiency energy storage, giving the prospect of cost ftive renewable storage not just round the clock but through the seasons. if our innovators and entrepreneurs can solve this challenge and bring the cost of clean energy be storage below the cost of fossil fuel power generation, then the need for innovation -- sorry, the need for intervention will have
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passed and we can step back and leave the market to do the rest. renewables will become the energy of choice, clean, competitive, and secure. if we take all of this action we will reduce the cost of ernlg in and the risks of climate change. we will create jobs and enhance our energy security. so if britain and the u.s. move ahead, we can reap the rewards. but of course we cannot solve climate change alone. only effective global action will achieve that. that's why the international community is negotiating right now what i hope will be a strong effective and binding deal at the paris meeting next month. the paris deal is important because it will give all countries confidence in the direction of travel. it will level the playing field. confirm once and for all that climate action does not create
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competitive disadvantage. capitalize investment and spur innovation. over 150 countries have already made commitments to reduce their emissions over time ahead of the paris meeting. it is likely that every significant country in the world will have done so by the end of this year. these are not just rhetorical commitments. many include strong, subsubstantive i'ment such as china to clean energy sources to make up a fifth of the consumption by 2030. independent analysis estimates that this commitment could give china a renewable energy capacity of a thousand gigawatts by 2030, roughly equivalent to the united states total electricity generating capacity today. this huge increase will fundamentally change world energy markets by expanding economies of scale and accelerating technological
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innovation. our history shows us that when the u.s. and the uk take a lead, we can persuade the world to follow. and we must take that lead. through our world beating innovation, our trust in markets, and our leadership on the world stage, we can show the world how to counter the threat of climate change at the same time as growing our economies. as conservatives, we know the responsible thing to do is tackle threats when we see them and to do so in ways which preserve our future security and prosperity. and we know the smart thing to do is harness the power of the market to tack the challenges of climate change because if we do not lead others will decide the way forward. and their solutions may not be conservative ones. but if we do take the lead we can ensure the global response
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is founded on the force of markets, the power of technology, and the institutions of capitalism. to get there, leadership is required, not just that of government. think tanks, academia, businesses, all have a crucial role to play. the papers you write here at aei, the policies you promote, the investments businesses make. all of these things together will determine whether and how we choose to address the challenge of climate change. taking action to combat climate change is the right thing to do, the conservative thing to do. we have the power to ensure that as the world embraces the challenge it does so by harnessing the power of markets and the institutions of capitalism, the very things that have dlif edelivered for us tim time again throughout our history. i look forward to working with you to seize this opportunity. thank you. thank you. [ applause ]
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at their case and see if there are certain characteristics about them that would make them match what we're looking for. for. what we're looking for is they have to fit the definition of a refugee, which is someone fleeing persecution for one of, they have a well-founded fear of persecution, for one of five reasons, which is race, religion, nationality, political [inaudible] >> thank you so much. >> thank you s >> thank >>. >> reportep >> reporter: is? whr what p what an hwh here. and yor and yop and yan the audience. ir i'm not going to take the prerogative very much myself except for one question. i'd like you to get your questions in mind and then i will call on you for the foreign minister. i'd like to start by asking a
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question that's of a particular concern to a lot of people in this audience about this. since we were children of the united states we've seen a tremendous improvement in the environment in the united states. i grew up on the west coast. i spent a lot of time in los angeles. and it's remarkably better than it was. and there is a cost to that, to be sure, but the americans have -- people from all around the world have decided to have a cleaner environment and have paid for that. and we see what a better world it is. but when we look at the rest of the world it's not always the same case. i want a cleaner environment personally but the number one issue for me personally is world poverty. i spent a lot of time outside the united states in communities that are really very, very poor. i came back over the weekend from india where i was shooting a film for aei in a slum in mumbai. and when i was there i was working with and i was talking to people who recycle plastic. they take the plastic water
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bottles and they turn them into other products by melting them down. and one of the people i was with told me an interesting story. he showed me bags of old water bottles and pieces of plastic. he said what's that, i said, it's trash. he said, no, no, that's wrong. that's opportunity. he said that something in your house that you threw away because you thought it was trash, it came here. we recycle it. turn it into another product and it goes back to your house and every link of that chain is somebody's dream. that's fantastic. that's the most conservative thing ever. you and i love this i suspect. i said, what's the problem? he said the problem is your country wants to shut us down. and i said, what do you mean? he said, there's smoke thats out of here and there's pressure from the american and european governments on the indian government to shut down this entire industry and thus to shut down the dreams of these people who are dirt poor. they were -- they were dying of starvation under socialism and
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under gandhi and first time they're being set free. what do i tell the poor man in duravi who is simply trying to make a living and feed his family for the very first time? is there a solution compatible with this when the largest part of carbon emissions of the world are not coming from great britain or the united states but from china and india where people are simply not trying to be poor? >> first of all, we have to recognize that some of the -- there is a challenge here. there is a conundrum but we have to recognize that some of the countries that are most vulnerable to climate change, that will actually suffer the most if there is catastrophic climate change are the poorest countries in the world. if we have catastrophic climate change, heat stress making large parts of the world unhabitable, rising sea levels, it will not be the rich countries that suffer. we will be able, belatedly, to invest in the protections we need to survive those things. it will be the poorest, least
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capable countries, the poorest, least capable populations that will suffer the most. but, look, i'm not an expert on recycling of plastics. but i'm pretty sure that the answer to your question is that there are ways of recycling plastic bottles. we do it all the time in our own economies. which are consistent with addressing the climate change goals as well. and it's about creating an industry and a structure of industry that can respond to that. that probably means that your guys in mumbai are going to become collectors and merchants selling on their -- their -- their mashed up plastic bottles to a processor, who is then going to process them in a higher technology plant than they would ever be able to afford. it doesn't mean they're out of business, it just means their business is changing. there's a real danger, whether we're talking about a developed economy or a developing economy
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inning looking at a single industry or a single sector. of course there's a temptation, let's take a u.s., to focus on the coal industry and the significant importance of the coal industry and the impact on the coal industry of delivering carbon reduction targets. that is with respect the wrong starting point. we have to look at the costs and benefits to the whole economy. what i've tried to get across this morning is that looked at on a whole economy basis the opportunities to drive economic growth through embracing these new technologies allow us to mitigate the impacts on those who suffer loss, a negative effect as older industries, polluting industries are negatively impacted by this change. the question for me is looked at across the economy as a whole is the impact positive or negative overall? how you then manage the allocation of those impacts between different sectors, different groups, different
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individuals is a challenge for governments and markets of getting the structures right. i think we can do that provided the overall impact is positive. >> recently i was speaking to a supporter of aei who works in the fossil fuel industry. and i asked about the very questions that you raised. i said, what's the answer? because he was as concerned as anybody in this room about having a clean environment that's sustainable and looks to the future in a way that's best for all people. and particularly future generations. and i said, what's the answer? and there are lots of -- he gave me an example of the wrong way of going about it, which is to say, to create winners and losers where we don't have perfect information and perfect sigh ebbs ens. he gave me the example of ethanol where we grow food and then burn it. and -- but we have to subsidize it a lot.
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turns out they have a higher carbon footprint and burns food and drives up food prices which in turn hurts the point. i said, what's your point? he said the point is if we simply took off all the taxes and all the subsidies and regulatory environment that distorts the prices for fuels, then the highest ben fet/lowest cost methods would come forward and within 20 years we would have a lower carbon environment. is this correct or is this simply pie in the sky thinking? >> well, i think there are a number of different arguments mixed up together there. i think we have to -- i mentioned the issue of market failure around the ability to dump pollution without charge, if there is no cost imposed on the level of the firm, the individual, than his behaviors don't reflect the social costs of what he's doing. and where we have a market failure that allows people to do things like that just as going back to your opening point, 30
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years ago, 40 years ago we were regarded as normal to dump into rivers. the affluent from industrial production. we would not regard that as acceptable or normal now. it's allowing somebody to make a cost/benefit analysis that is distorted by viewing only their private costs and benefits and not the broader costs and benefits they impose on the society. having a pricing mechanism that embraces all aspects of the activity is vitally important. i think what i'm arguing here and what i said earlier on is that if we can get a little bit further down the road of technological development that we're currently embarked upon and we are getting to a point where many of these technologies will not need special regimes, protections, subsidies. the technology itself will have developed to the point where unit costs are competitive with
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fossil fuels. solar power is already competitive with fossil fuels in most parts of the world. not just in the sahara desert but in most parts of the world. the next challenge is being able to store it because clearly solar power is only available at certain parts of the day. if we can crack the challenge, and this is a technological challenge, it's, you know, is it as difficult as putting a man on the moon? i don't think so. but cracking the challenge of being able to store energy around the clock will give us solar power as a market competitive form of ernnergy in vast parts of the world. it will allow countries in the ecuadorial countries in the way that other countries now export oil and gas. it will give them a source of
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economic activity, a source of income that could be very significant for their development. so the question is how we foster and encourage that next step of innovation. it should be market led, but there will be a need in some cases for short-term interventions to stimulate the market in the right direction. >> i'm going to turn it over to the audience now. i would like to hear what's on your mind. let's -- house rules. wait for the microphone, say your name, and put your protest statement in the form of a question. john, do you have one back here? we're running slightly short. okay. we will have shorter answers. start right up here. take the mike over here? >> good morning, sir. welcome. thank you for being here. as conservatives we tend to value the proven and the trusted. i heard no discussion of nuclear
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energy in your talk and it looks as though europe is largely walking away from it. is that true? >> well, the uk certainly isn't. we're embarked on a program of reinvestment in nuclear power as our last generation of nuclear power stations come to the end of their lives. we are replacing them. we are very clear that nuclear has to be part of the future, clean energy mix. we will never get to the targets with we have set ourselves without nuclear providing a significant element of -- of the electricity generation base load. other countries in europe have different positions on this. and there is a, frankly, a political challenge. germany, most notoriously, i suppose is the right word, has committed to ending its dependence on nuclear energy. we think that is misjudged, but we are -- the british
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government's position is that while european countries, through the european union, must make commitments collectively to reducing our carbon footprint, individual nations should choose how to do that. if the germans want to cripple themselves by doing it in a less efficient way, that has to be their right to choose that. they're not the only up withes but they're the biggest economy that's focusing on a non-nuclear future. we are clear that we will have a significant element of nuclear in our mix. >> right in the back here. yes, sir? >> hello. i'm thomas, former economist at the world bank. the bank just put out a new report that there's going to be a new climate social network as well. my question is how are we going to pay for all of this? is it through the paris, you know, climate change and you're looking at exxon and others getting taxed now and having
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climate problems coming out of new york? >> by the way, point you just reminded me. a point i meant to make in response to yours. talking about fossil fuel companies is kind of misleading because most of these companies are also players in the renewable energy sector now. >> that's true. >> they see themselves as integrated providers of energy, solutions looking into the future. let me interpret your question as i'm not -- i haven't seen this world bank report that you referred to. but there is a requirement as part of the cop-21 negotiation to mobilize eye-wateringly large amounts of finance for global climate initiative, $100 billion a year by the end of the decade. and it's clear that to bring the developing world with us we have to be able to demonstrate how we are going to mobilize the kind
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of resource that is necessary to deliver this agenda. but again, very important to emphasize, this is not $100 billion of donated money or $100 billion of public funding. it's $100 billion of capital mobilized behind the investment programs that are needed to tackle these challenges. and much of this money will be invested by businesses as a business proposition in response to the clear commitments that governments have made to decarbonize their economies. we see it in our own economy. we set the parameters. we've done it in simplest way. we just told the electricity distribution companies that x percentage of the power they distribute has to dprom renewable sources. how they deliver that is up to them. of course, that has placed a
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premium on the value of renewable energy generated, sold into the grid. at the beginning, because there was a deficit of renewable energy. as the quantity of renewable energy increased, that premium has declined because there is now something closer to a balance between the demand from the energy distributors to meet their statutory obligations and the supply of renewable energy into the grid. >> ladies and gentlemen, we come to the end of this period. and the foreign minister has to go on to his next appointment. i'm delighted to have him here. i'm thankful to all of you for coming to this session. and i would like to ask you, invite you to join me in thanking foreign minister philip hammond. [ applause ]
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the florida republican party on friday kicks off sunshine summit with gop candidates for president. speaking at the gathering, marco rubio, ted cruz, lindsey graham, donald trump, jeb bush, ben carson, and mike huckabee. you can see them live starting friday morning at 10:30 eastern. and the summit continues saturday with more candidates, bobby jindal, chris christie, rand paul, john kasich and carly fiorina. starting at 10:00 p.a.m. easter on saturday. all persons having business before the honorable supreme court of the united states admonish to draw near and give their attention.
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>> my fellow americans. tonight our country faces a grave danger. we are faced by the possibility that at midnight tonight the steel industry will be shut down. there are i'm taking two actions tonight. first, i'm directing the secretary of commerce to take possession of the steel mills and to keep them operating. >> in 1952 the united states was involved in a military conflict with north korea and at home a dispute between the steel industry and its union had come to a head. >> the korean war was a hot war and they needed steel for munitions, tanks, for jeeps, for all of those things that you need it in the second war, as well. so if the steel industry went on an industry-wide strike that was going to be a real problem because it's basic to the things that an army and navy need and air force need to fight a war. >> to avoid a disruption of
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steel production crucial to the military, president harry truman seized control of the mills. and as a result, a pending strike was called off and steel production continued. however, the steel companies led by the youngstown sheet and tube company in ohio disagreed with the action and took the lawsuit all of the way to the supreme court. we'll examine how the court ruled in the case of youngstown sheet and tube company versus sawyer and the impact on presidential powers. joining our discussion michael gerha gerha gerhardt, professor at the university of knnorth carolina w school and william how well, political science professor at the university of chicago and the author of the "wartime president, power without persuasion" and co-author of "while dangers gather." that's coming up on the next "landmark cases" live monday at 9:00 p.m. eastern on c-span,
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c-span3, and c-span radio. for background on each case while you watch, order your copy of the "landmark cases" companion book available for $8.95 plus shipping at c-span.org/landmarkcases. the national institute for health cakacare management foundation hosted a forum last week on how to improve medical care while reducing costs. this is just over two hours. good afternoon. i'm nancy, president and ceo of nick democrats em foundation and i'm delighted to welcome you here today on briefing on transforming health care to drive value. we have an exceptional panel of speaker representing different perspectives. what unifies them is that they're all on the forefront of
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driving value through innovation in the way we deliver care, we pay for care, and how we consume care. copies of the speakers' frent tagss will be posted on our website after the program. we have an impressive audience and we want to i vnvite you alln to the presentation at well. at the conclusion of all the speakers' presentations if you want to fill out the card and hand them all, bring tell up here and you can address the speakers. our first speaker today 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 overseeing and improving the programs that serve the millions
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of americans who access health care through medicare, medicaid, chip, and the marketplace, also known as the exchanges. he personifies excellence in public service. he brings unique background as a physician, a strategy consultant, and a researcher to his positions. he brings a talent, a real talent for problem solving and a tremendous passion for finding and increasing the quality and value of the health care system. he has received the secretary's highest award for distinguished service. táátpá conway. >> thank you, nancy. i'll apologize for two things in advance. i am sick, so my voice a little odd. and i have to leave after i talk. i try not to do that. but was told i need to be back in baltimore for some things.
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so, as was said, i've been chief medical office for five years. cms is like dog years so it feels like about 35. and true story. one of our communications folks the other day said patrick, you need a new picture. why do i need a new picture? you look a lot older than when you started. i went home and asked my wife, do i need a new picture? yeah, you need a new picture. so i will move the slides relatively quickly, if i can. maybe i'll say next slide and you can move them? perfect. i'll adhere to the time limit. so if you think about the affordable care act, three major changes. one, insurance coverage, we're at the lowest insurance rate in recorded history for the united states. another set of data came out yesterday. i won't talk much about that today. i will talk about health system transformation, delivery system forum, really focusing on the cost and quality of care. if we go to the next slide. this just shows a cbo estimate
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from 2010 and then looking again at 2015, predicted over $20 billion in cost savings from reduced medical trend. as you all know both our own act chew rare and independent analyses now saying 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 crumbholtz who is a hart core health services researcher. you don't have people often say jaw dropping results in the "new york times." just to call out a few results from a jama study, reductions in all cause mortality from 1989 to 2013. this is also testing the -- i don't have my dplglasses on. this is going to test to see if i have my slides memorized. reduction mortality, reductions in hospitalizations, at a
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population level. so less medicare beneficiaries being hospitalized even as the population ages and becomes more frail. hospital costs and reductions of hospitalizations in the last six months of life. not on this slide, our own quality measures for cms over 95% of the measures have improved significantly over the last three years. so significant improvements in quality across the u.s. go to the next slide. thanks, i'll take it. this just -- we'll test to see if i can to look at it or not. this is our frame for delivery system reform. we talk about incentives. these are both provider and consumer incentive, value based purchasing, alternative payment models. we also talked about care, integration of mental and behavioral health, population health management and engagement of patients in their care through shared decision making and other means. and then we taught about information, transparency about quality and cost of care and the
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right information at the point of care. i am still a practicing physician, mainly taking care of children with multiple chronic on weekends. that is critically important. if you go to the next slide. this is a payment framework. you do not need to memorize. but we published in jama about 18 months or so now. four categories of payment aligns with a lot of private sector folks you're going to hear from today and payment framework just released from our learning in action network. category one, fee for service, no link to quality or cost. category two, fee for service with a link to quality or cost. value based purchasing. category we three, call tern tive payment model built on the fee for service. category four, true population based payment to a provider. these all provider oriented payments. you will hear from private payers and others about how they're also moving to value
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based payment. if you move to the next slide. the president and secretary announced in january of 2015 specific goals for alternative payment models. this is category three and four from the last slide. provider is accountable for quality and total cost of care. to hit 30% by 2016. 50% by 2018. we're settling this goal for the federal government but importantly we said we want private sector actors to move in the same direction. private payers, providers, consumers, employer, et cetera. second goal was value based payment. we said 85% linked to value by the end of 2016 and 90% by the end of 2018. we are on track to meet those 2016 goals. we also launched the health care payment learning in action network to really partner with the private sector to achieve these goals. we got eight of the ten largest private payers in the country. cms and the private payers over
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80% of the u.s. population. over 25 states engage. you got large employers, you've got over 1,000 provider groups. we just had a summit that had, you know, people representing a huge portion of the u.s. population really driving to achieve these goals. if you look at the next slide. this just graphically shows the goals. dark blue, key point on this slide, in 2011 we had 0% in medicare and alternative payment mod ders. at 20% in 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 in my 7-year-old son has this stat memorized. cms spends a trillion dollars a year across all programs. that is more than $2.5 billion a day. that is more than $100 million an hour. in the course of this two-hour discussion, $200 million plus. our goal is how do you spend those dollars as wisely as
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possible, how do you partner and cattize change that improves quality of care for people, develops, and generates healthier people for our country and is smarter spending. next slide. this just shows our value based payment programs. key point here in the middle box you can see hospitals right now have 8% of payment via readmissions and other value-based purchasing programs, tied to quality and value, physicians, clinicians, 9% for large group, 7% for smaller groups. showing a significant amount of payment tied to the quality of care delivered to beneficiaries. on the next slide. i'm now going to shift to the innovation center, so started leading the innovation center about 2 1/2 years ago. as you know $10 billion over 10 years to cattize new payment and service delivery models to improve quality and lower costs. this lists all of our major models. i'm not going to talk about all of them but i will talk about a
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few. on the next slide, on their accountable care organizations we've got more than 400 acos in the medicare shared savings program. almost 8 million beneficiaries in 49 states plus puerto rico. and for our medicare shared savings rules and working on another set of rules right now and benchmarking issues which we've had publicly looking to improve this program over time. i'm going to talk a little bit about some of the resultses. the other important note here. think about met care. 32% and growing in medicare advantage. you've got 20% plus in alternative payment models. you already have a minority of medicare and what was traditional fee for service and within traditional fee for service the vast majority of services was link to quality and cost. the next slide. this is our pioneer aco results. first model to be certified by the actuary. improves quality and lowers costs. and then we built in into medicare shared savings, track
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three, the learnings from pioneer. the other learnings from pioneer, all our models generally people can go in or out of. pioneer, which, you know, first model out of cmi, so, you know, 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've tried to explain this. i've given up trying to explain it well. i'm going to talk about next generation aco model which we think a number of organizations now are deciding to go to track three or stay in pine more or move to next generation aco. key point is we want an array of payment models that meet provider where's they are and we have a fundamental principle that they should have a choice, improved quality, lower costs. dramatic improvements in quality and patient experience. and over $400 million in cost savings. so successful model that met the
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bar of improving quality and lowering costs. on the next side. next generation aco, we think there's some key attributes here and got a robust interest. we hope to announce the select entities soon. prospective attributions. know your population. populations, you can choose a lower amount than full population-based payment. patients can select their aco. what we call voluntary at trib bus but the beneficiary says this is it and things can happen like rebates to the beneficiary to stay within network and enhance care coordination services because the provider knows they're part of the knows they're part of the network. captioning performed by vitac captions copyright national cable satellite corp. 2008 looking at regional benchmarking approaches. so, on the next slide, this just shows primary carry initiative.
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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,
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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.
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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
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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...
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>> >> and like i said we will release the first to result soon but we're very excited about this model. transforming clinical practice we are investing in supporting positions over $650 million investment with 140,000 physicians thank clinician's across all 50 states. to lower cost and improve population in health
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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 monthly and we adjust them. our payment model has been adjusted multiple times. it was a key fundamental tenet to talk about on a
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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
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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.
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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
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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.
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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.
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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.
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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?
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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
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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
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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
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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.
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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
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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%
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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?
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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
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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
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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
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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
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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
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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
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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.
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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
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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 that insurance companies cover branded drugs regardless of they are more effective than generic alternatives products are
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required to cover and there may be cases where that is separate it is better for a fraction of the cost to lower premiums to rationalize their formularies where they should. . .
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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
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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
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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
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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
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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
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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
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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]
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>> 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
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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
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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
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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
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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
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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
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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 reason i said that, well, 70
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years ago we invented a wonderful thing in america call kaiser. i still believe that is a way healthcare should be delivered. since we already mentioned it, why reinvent something less good? i don't get it, but i'm just an immigrant. but there are other reasons also. very often the innovations in operations races on healthcare delivery change, they are disrupted. disruptive innovation as if
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