hsa so that's a part of our population that we'd love to see be able to have that same choice if they so choose. >> similar comments on alternative payment models. fee for service are important, paying for value. i don't know that there's one model that would necessarily work in every market or you have different issues with rural and urban settings but driving towards pay for value is critical to the longevity of the system and another key element that folks mentioned transparency enables our employees to fully understand cost and quality at the point of service will help fix the economic model. there's just lack of information there so i think that would be another useful thing to continue to push on. >> well, join me in thanking the panel. i think you've contributed a lot. [ applause ]

>> thank you all for coming back after the break and finding a seat. appreciate it. we'll just get settled again. hi, i'm david lanski. i'm the ceo of pacific business group on health. some of the panelist you just heard from were members of ours. let me just say a word about what we're doing here and my job here really is to help make a transition between the wonderful case studies and purchasers to the implications for policy development in washington where we started the day with dr. burgess. first i want to thank aei and brookings for sponsoring this meeting with us. tremendous opportunity to have a dialogue that is nonpartisan and across many points of view to try to think what the successful developments of health care policy. pbj is one of the sponsors. we represent about 60 very large

employers and purchasers. they together have about 12 million covered lives and together they spend about $60 billion every year so they have a strong stake in the improvement of the health care system for their own populations and as several panel members said for everybody in the country. it's important to note that while these are tremendous organizations that are investing a great deal in innovation, experimentation and learning, they are not typical of american employers and there are many small and medium sized employers around the country who don't have the resources or the scale to influence health care as directly as some of these companies can so i think one thing we'll talk about today is the implications for these kind of strategies for others employers that have the same challenges but not the same resources. we think there's a lot to be learned of the lessons of the work we have done. i want to take a point in transition between the first panel and the second. and for public policy development.

first, there are lessons. most of the topics you heard described today have a mirror image in public policy. in aco development, in hsa design and so on. so we do want to be learning actively and have a dialogue between these thought leaders and innovators and people here who are developing much broader public policy statements. i'd also note i think this was highlighted in allison's questions. these are carefully constructed programs. these are not blunt instruments. what the employers have learned often, they have to be thoughtful in crafting these programs to suit the need of their population and the environment. secondly, these employers are engaging in direct discussions with providers. they are not relying only on their health plan as a mediating organization. the health plans are critical, as everyone on the panel said. but they often find themselves needing to drive innovation directly in conversation with the providers. and then moreover as you also heard, they remain in direct

conversation with their provider systems. if you get into the weeds of some of the models you heard about today you'll see how much time they put into understanding the care paths, and trying to support them in making necessary changes. implication of that is something worth thinking about as a group. we've all talked a lot about insurance products and insurance coverage. a lot needs to be done in actually redesigning the delivery system and that means a reallocation of roles for everybody in the system which we have to think some more about and certainly public policy is critical. the third broad point is the alignment is becoming critical. any one of these companies i think as sally said as big as they are doesn't really influence all the dynamics of the provider community or the marketplace. so that having alignment of signal to the provider community and to the public is very important and we need a dialogue between public policy makers and private employers about what that signal is and how it can

best be reinforced by everybody's behavior and action. i also took away some observations about the employers. first of all, their concerns are the same as the concerns we hear in state houses and congress. they are acting on the same concerns, the same costs, the same quality issues, the same variation issues in trying to find the tool kit to address those concerns. they're often using some of the same approaches as i mentioned. very strong in today's discussion that quality comes first for them. ultimately their biggest cost and biggest concern is having healthy products.

>> they are deeply invested in understanding their work force, provider community and impact of the health care they are arranging on their work force. this is not a superficial engagement. it's a deep analytic engagement and there's a lot to be learned from the analysis they have conducted. there are some differences, things they can do that don't apply as much to public policy. their work force can be concentrated, spread out, can be rural, can be urban. they had to select and design programs they can manage within the constraints of their particular business arrangements. an organization like medicare operates at a national level, there are pressures to act in a uniform manner across the country. they don't have as much ability to tailor and flex. as we think about changes in health policy we'll need to think more about how to allow for flexibility and socially desirable uniformity. they have very different case mix. some have younger employees, older employees, industrial employees, longer tenured employees, brief employees.

others don't have to think in those terms. i think the last issue is to think more together about the relationship to providers as distinct from the relationship in the insurance product. macra is an opportunity for us to think in new ways about how to trigger value in the activities of the provider' community. so those are some of the broad themes i've heard. now we will bring up people who understand policy far better than i to talk about the implications of the lessons we have seen from the private sector in the activities of public policy development coming forward. joe will introduce that panel and i will invite them to come up now and take it from here. >> thank you, david. do we understand policy better? well, we have probably been burned more by it than the employers. it's a big challenge. it was a great first panel and now we will attempt to obfuscate and confuse, because of course, we represent the washington outlook, at least many of us do. with that let me make a few comments not standing there. david's comments really were an excellent handoff for this

panel, but he didn't mention medicaid. there is a tendency, i think -- i certainly have it, to think first about medicare and then sort of medicaid is kind of tough because the states actually run medicaid and no matter what cms thinks. but i think there's a growing appreciation that certainly the employers that we heard from this morning clearly recognize that if you don't pay attention to the client population, if you don't understand something about the delivery system in the local area rather than in some generalized sense you'll probably have trouble implementing cost saving value producing changes in policy or in the way you run your system.

so i think it's a real possibility that as part of further reforms, health reform is never going to stop. we are just going to call it by different names and it's going to continue on forever, which is, i think good for this panel. if it were not the case we would all have to find other jobs. i think part of the future of health reform is greater appreciation for the role of states. so i think that's something that we may see perhaps in a repeal and replace bill later this year. let me introduce the panel. i'm going to introduce people in order of speaking. first we have lynn nichols. let's see. i have to find my -- have to

know what year your title is. lynn is a distinguished professor and director of the center for health policy research and ethics at the edwards mason university, a washington person. i think you got your start in the clinton administration working on health reform and you're still working on health reform. >> how's that working out for you? >> i know it's going great. >> you win some, you lose some. >> next we have clay alspach, principal at levitt partners, and has actually a great deal of experience with prescription drug business, fda regulation and so on. he spent earlier times up on the hill and so he knows where some

of the bodies are buried. then karen fisher, karen is now at the association of american medical colleges. but before that, many years working on legislation for the senate finance committee and other roles. and then finally, avik roy. avik has had an interesting career. i have known him for quite some time now. he's moved around a lot but he's started a new think tank. i don't want to think he's trying to be competitive with aei. >> who could compete with aei? >> exactly. it's a great new effort called the foundation for research on equal opportunity. it is not just narrowly focused on health issues. avik, as many of you have seen

him on tv over many, many years, is a true health policy expert. with that why don't we start with len. we'll go down the row and then argue with each other until you stop us. >> thanks, joe. joe gave us five minutes. so i will try to make three points. >> you can use ten. >> no. no. no. i will stick to five. that's fair. so basically i have three points. two about what's going on now and one i think we need to think about going forward. first i want to begin by saying how happy i was to hear congressman burgess say the word bipartisan seven times. i counted. you should tweet that. this is important. but seriously, that is serious, but second, it is a very serious point to say that there is truly bipartisan support for the value agenda. every single paul ryan budget, go back and look at every single

one of them, included all the medicare payment stuff that's in the aca. the merr hatch upton, in my view, the most comprehensive congressional alternative to the aca produced before the election, burr of course is chairman -- not chairman, but long-time collaborator with tom coburn, who always wrote the intellectually defensible way to think about this from the right on the hill, coburn retired so burr took up the crucible. hatch is chairman of finance. upton is the chair of energy and commerce. these are very important people. hatch will be extremely important in the end game. that bill includes all the medicare payment stuff. of course, as congressman burgess laid out, macra passed with just about the largest bipartisan majority since i don't know, world war ii. it was pretty overwhelming.

so that is baked into the system. that is a very very good start. the second point i want to make is this public/private cooperation that has been waxing and waning and going on is a two-way street. i think you can see a lot of good features that are coming out of that. first and one of the things i liked best about the way the innovation center did its business pursuant to the aca was emphasizing multi-payer payment initiatives. the reason multi-payer payment initiatives matters is basically to try to get the incentives and reporting requirements and all the information flows aligned between payers so that clinicians can focus on what they went to medical school or nursing school for. i know of hospital systems that are now participating in a whole bunch of things and they are reporting between 240 and 500 different clinical quality metrics.

as a simple country health economist i don't know what the right number of clinical quality metrics to report is, but it ain't 240, i can assure you of that. we got to do a better job. the only way to do that is get multi-payer framework going. i applaud the participating plans and employers who have done this sort of thing. there are lessons that i think you can learn from some of the different similar but differently structured activities. my favorite is patient centered medical home, a, because it's the core of making an acl work, the core of making our health care system more humane and patient-centered. that's the idea. it's been tested in lots of different ways. one of the largest public tests of the model was the comprehensive primary care initiative. the third year evaluation by mathematica just came out. i don't recommend you read it in one day but i recommend you take a look at it. it basically found, drum roll,

no cost savings over three years. the only part in the country that saved serious money was oklahoma. you might ask yourself how the hell did that happen. the answer is because oklahoma actually has a really well functioning health insurance exchange, health information exchange which takes data from the docs and gives them back actionable reports in real-time, combines all the payers and all the ehrs into a setting and allows so-called big data to actually be analytically operational for clinicians on the ground. they did better -- saved money in year one but not in year two and three. in general the program did not overcome the cost associated with the rather, in fact, i would even say very demanding requirements of the government in all the things they wanted the primary care docs to do. while they gave them $16, $18 per member per month, they spent it all doing all this stuff. contrast that with the patient

centered in the private center. i know a fair bit about it because i have been evaluating it. it is designed by care first mid-atlantic. which is maryland, d.c., and virginia. unlike the government approach they didn't dictate a whole bunch of things you had to do. they wanted you to do 24/7 access, same day appointment. pay attention to the data we give you and focus on care plans, agreed to simultaneously by the doc, by the nurse manager and the patient, sign the contract and go forth and prosper by focusing on those people. they saved about 2.8% or maybe 3% in years two and three. the evaluation is ongoing. the larger point is this, kind of like what i heard our employers say. they don't really want to get into the micro managing business of how to do it but they want to set the right financial

incentives and information flow so that the docs can do it. what i would observe is maybe an important lesson here. instead of getting a whole bunch of experts, fun though we may be for retreats, in a room and saying this is what we think docs should be doing, maybe what we should be doing is focusing on which patients to focus on. because that is a very, very, very important thing. you're not going to save money on every patient. i don't care what you do. you are only going to save money on a particular subset of patients. there are a lot of ways to think about how to identify them and a lot of advance in so-called predictive modeling coming out of claims based and clinical based data in my opinion. the evidence, this is where oklahoma comes back, the evidence is the data that do best are those that combine clinical and data to predict which patients to focus on. so let me set that up. the third lesson that i would say or the third dimension of this public/private two-way street learning experience as it's going on is the dirty little secret of health care

which no one mentioned today which is kind of surprising, although sally sort of alluded to it for a moment. that is market power at the local level on the part of providers. as big as walmart is it can't really tell local hospitals what the hell to do. boeing is in a little bit different place in about three places. you can do it, sorta kinda. but really, it's a p.r. game you're playing that they want to play with boeing. no big employer has enough market share to drive it. let's segue to a better way that we know congressman ryan and others are going to push pretty hard. you heard burgess had already signed on. okay, fine, i guess that's done. let me point out and read that thing closely. it's all about turning medicare over to health plans, which sounds clean and nice and simple. but here's the thing. health plans don't have market power, either, over a whole bunch of hospitals. so if you got medicare out of

the fee for service business and turned it over to health plans and said good luck and now i don't have to worry about it because i'm going to give you 5% a year and i don't care, you will care pretty quickly because health plans are not able to drive the kind of bargain you really want, nor are employers able to drive it. we need all the buyers to be focused on exactly how to move to the promised land. let's talk about the promised land. that's my third point. one really great feature of being tenured is you have time to read stuff that you wouldn't have time to do if you weren't. i will tell you three things you should read too, but not in one day. the inspector general of hhs, you may think what do they have to do with anything? they do analyses, kinda, sorta evaluations, if you will, from their own legal point of view, of implementation.

they are looking, they just released a report on the implementation of the quality payment program which is a big part of this. it is about the physician reporting stuff. you look in that report, you will see pretty clear recommendation for back office i.t., which is sort of, you know, euphemistic speech for figuring out how to get the data out of the ehrs in such a way that we can actually do what we said we were trying to do in the legislation and in the regulation, which you heard congressman burgess praise. here's the little -- okay. that's point one. point two, read that third year evaluation and you will see even where we are spending 18 bucks pmpm for three years, you have got places in this country where the docs can't get out of their ehr what everybody agrees should be measured.

and the third little piece is a project that i'm involved in evidence now which is funded by ahrq and the basic idea was to try to enable small practices around the country to be able to help manage patients with heart conditions much better for all the usual reasons. i signed on as an evaluator for the virginia collaborative which is one of seven. i was told by the p.i. of the project don't worry, every certified ohr can spit out the data you need, you just need to work on the statistics. oh my. i have had to learn way more than i ever wanted to know about ehrs, about getting data out of them and the fundamental inability of the ehrs to function the way they were promised, of doctors to be able to use them. so now i will bring you back. what we are doing in this legislation and that regulation is we are saying 90% of what you

are going to be judged on in the first year comes from either your ehr or your report about your ehr. 10% of it comes from claims which medicare will happily compute for you and tell you what your total cost of care is. i submit to you those percentages should be reversed. we should figure out how to get the data out for the docs. the docs should not be required to produce these reports on their own because they cannot. they don't have time. we don't want them to learn how to do it. we want to enable them to participate in an infrastructure where they can bring to clinical decision making and sharing with patients all the data they need in real-time and it can be done because oklahoma proved it can be done. we need to think about how to build that i.t. backbone so that doctors can actually participate in the 21st century. let me tell you what's going to happen if we don't.

these little practices which are still the core of our nation especially in primary care are not going to be able to compete. macra puts 4% to 9% within three years of total medicare revenue at risk and it's total zero sum. you'll lose if you're at the bottom of this pile. they cannot win because they cannot make the ehrs to tell them to generate the data to tell them how to do it better. we have to do this for them. it can be done cheaper. it will have to be an infrastructure kind of investment. i'll stop. >> thank you. len's talk reminds us all that in washington we have a different standard of measurement. so if that was five minutes, well -- [ laughter ] >> bill clinton time. [ laughter ] >> clay, take it away. >> first i want to say thank you

so much for the opportunity to be here today and to speak. i want to echo, i learned a ton this morning from all of the speakers. thank you for those contributions. what i would like to talk about today is the uncertainty here in washington. it has been what we have all been facing since the election and uncertainty about everybody who had a memo written before that, before election day had to rip it up, tear it up and recalculate, recalibrate on every single issue across the health care landscape. so there were a lot of prognostications and a lot of predictions around that. so what we do in washington really well is i'll make some predictions and prognostications even though we may have gotten stuff wrong before, i will try to do that here. what i will try to do is walk through why i think they are sound and put it in data or at least some of the things that may progress. one of the first things, what i would say related to the subject matter of today is that the move

to value is going to continue. as we look at what's going to happen in the next year, 2017, of course it's going to be very busy year across the health care sector here in washington. everybody will be implicated in the discussion. one thing that i think you'll find is the move to value is a bipartisan idea and it will pervade throughout what happens. what i would like to do is walk you through three different settings. congress, the executive and the private sector, about how some of the ideas from the first panel, will they present themselves during the policy debate we are going to have. first we have congress. i think dr. burgess, i worked a lot with him when i was in energy and commerce committee. he did a tremendous job of walking through what you can expect from his committee. that's where i did my work. they will have a full plate. but the predominant -- what we are going to hear and when we

already heard is about repeal and replace. so repeal and replace is going to be -- take all the oxygen out of the room. it will be what everybody is judged against. it will be where all of the activity from the policymaker standpoint is going to be centered. when you look at repeal and replace -- i echo the bipartisan sentiment from dr. burgess was definitely welcome news. i think when you look at repeal and replace one of the questions that gets asked and should be asked is what's involved in that? what are you going to see in that piece of legislation. with repeal and replace and what republicans have been talking about since the passage of the affordable care act is a need to reduce costs for consumers. that has been one of their main arguments that you have heard in every political ad, through every policy debate, in committee to the house floor. reducing cost for consumers. it will be a focal point that

they want to put forward to try to accomplish that. so the better way that dr. burgess talked about this morning includes ideas as well as i would point you to dr. price's legislation on health reform. they both had one key component and that is health savings accounts. health savings accounts is something the republicans have been talking about for a long time in policy circles. and i think that is an idea you heard a lot about really well in the first panel. what they are going to look to do is find ways to foster the continued expansion and continued -- you know, make it easier for folks, whether veterans or others, to continue with health savings accounts. so that will be one important feature. a second part of it -- and you're going to hear a lot about repeal and replace and what's going to be in repeal and replace. i think joe said it really well that a lot of focus has been on, we talk about value, is on medicare. obviously medicaid has a big part of that as well.

i think what you'll see in repeal and replace is there will be a lot of focus on the individual market and what can happen to make that work and what can happen to consumers. there will be a lot of talk obviously too about medicaid and what the future of medicaid will be, and how that will move forward. medicare, it will be part of the debate as part of repeal and replace. it's not likely to be a prominent feature. it may be a smaller part of it. i will walk through that when i talk about the executive branch. medicare is not likely to be a big part of it. that's what you have heard from senator mcconnell, senator alexander, president-elect trump, others, that as much as it's a huge issue on the republican side, it won't be part of it. it will be part of the congressional debate though. what i would say is fiscal year 2018 budget, right now all the

debate is about the 2017 budget. that's what is going to give the reconciliation to begin that process of repeal and replace. there is actually a vote that will happen today that will approve the reconciliation instructions and that process will basically start. so phase two of the process will start. now, with that, the fiscal year 2018, i bring that up because we are into fiscal year 2017 so it's a little odd to pass the budget after you are already in the period so you are already spending the money but that's necessary to move the reconciliation for the republicans. for fiscal year 2018, i talk about the policy debate. they are going to conflate. there is going to be a real sense among the republicans in congress and from the administration to try to find some fiscal order that debates around spending that should have been part of fiscal year 2017, that were part of it, that's why the budget wasn't passed, will now move toward fiscal year 2018 budget and in that budget, as

you look at it, what we are seeing from the federal standpoint is mandatory programs are crowding out discretionary programs. so when you look at the caps that are a central part of any budget from the federal standpoint, the discretionary caps as to what you can spend, whether it's the defense department, for defense, or it's for how much for health care or how much there's going to be, how much more money there's going to be for nih. all of that is centered in these debates. the issue that has been here and will continue to be a problem according to the republicans unless it is solved and speaker ryan talked about this at his town hall last night, is the mandatory programs, medicare, medicaid, are crowding out the rest of the budget. they need to be brought, there needs to be some kind of order brought to that in order for the federal budget to actually work. that will be the policy debate that happens. and i think on the medicaid

side, that will be part of repeal and replace so you see substantive changes that you need to kind of take into cooperate. on the medicare side these budgets are very important for policy debates and for setting the caps. they are not going to change substantive law. they are not going to see -- it a premium support policy were included in that budget it won't be part of law. it doesn't have anything that would directly affect stake holders. it is something to caution and to qualify. but that will be where the congressional debate will center and something to keep into account. note the move to value, the need to reduce cost, to improve quality, that will be something that is talked about as part of these policy discussions. so those topics of the first phase will be part of that as well. now, where will the debate related to value continue or the policy questions continue? the executive branch is

definitely something that is front and center on their plate that they need to contemplate and think about. so with respect to that, while some -- and republicans would want to move forward with medicare reform it's not likely to happen because there's enough on the plate and there's a political sense they can't take that on as well. that said, on the executive branch, and the power that's there may present opportunities for them to test certain ideas and continue to test certain ideas that have already started, whether it's the bundled payment, the acos, others. that's where the question will come for dr. price and for others that are situated there as to what they want to do and how they want to move forward with cmmi as an example. so with that, i think the relationship of cmmi, how it will move forward, the past year you have seen basically the name recognition of cmmi and the understanding of cmmi has changed dramatically.

i think from a congressional standpoint and from a republican standpoint. while it was doing a lot of work in moving forward a great deal, there wasn't a lot of focus except for folks like dr. burgess and others who are really attuned to those issues. so that is a place where the name recognition has gone higher and it's created some concern among folks about what its future is. you know, it's my thought and i'll walk through why is that cmmi does and will play a large role in a new administration. it is for several factors. the first is macra. karen and i had an opportunity to work on it when we were on the hill and see it get enacted. for macra it's a bipartisan piece of legislation as dr. burgess walked through. it is a key factor here in that both sides of the aisle want to see it succeed. both parties want to be right here. they will take steps whether

it's working together on letters to cms or working with cms, others, to ensure it works. so they will want to make sure cms continues with that. as dr. burgess articulated, he will have hearings in his subcommittee, there will be hearings in other places to make sure macra continues. but for macra to continue and for the -- one of the key components of the quality payment program, it's the mips and advanced apms. for the advanced apms to work you need the programs, you need the models from cmmi. so you need those there so you can qualify for the bonus payments. if changes that will be seen, if there are any kind of changes to those programs or there were a discontinuation, that would cause a lot of problems not only with -- it will cause a lot of problems with stake holders across the country who view that as a very attractive place for them to be, because why? they are not going to get the negative adjustments. they can continue the investment and the move to value and can

move to a place where quality is important and they can move to a place how they want to practice. so that is one place as the executive branch, as dr. price and others, take their positions, they are going to have to consider. the second piece to this whole, this is something congress will have to deal with as well as the executive branch, is that cbo, congressional budget office, believes the cmmi actually saves, is going to save the fiscal, federal government, a great deal of money. i point you to the testimony in front of the house budget committee back in september, where they testified. in that testimony they outlined and really lay out why they think it's going to happen. it's around the process. so it's around the process that cmmi utilizes to put forward these demonstration programs and they believe that process is a really good process. it's not necessarily what has been picked thus far. it's around the process that's been utilized to move forward

these quickly and to get them out to test, to see if they actually work or not. under cbo's estimation, the next ten years, they are going to save $34 billion under cmmi and in the out years, probably a great deal more. so that's something that the executive branch and congress will have to consider as well. and the final piece to this, i think an important piece, is that because there's not going to be a substantial medicare reform likely in this congress, the question is where do those ideas come forward, how can republicans move and look at conservative ideas in medicare and how can they test their own ideas. well, you have the apparatus already set up. so that's where you can see different, whether it's a premium support model or other models being put forward under the executive branch. you can see that in medicare, you can see it in medicaid. it also has c.h.i.p. you can do it under c.h.i.p. there's other ways to test this out. when it's your power, when it's your ability, your car to drive, that makes it a little less

likely you want to get rid of it. so that's just something to consider as well. then finally i will move quickly to the private sector. sector. i think with republicans and democrats as well, they want to hear about what's happening in the private sector. they want to hear about the success stories that we heard about on the first panel and that private sector leadership and that data they can share are incredibly important for them to be aware of as they're moving forward. one opportunity that i think is there is around -- with some of the executive authority, they have the ability, because they're operating these public programs and because of what's in the aca, to actually wave certain requirements. they can wave whether it's a quickback statute or stark or other pieces that may make these

molds or demonstrations harding to implement. as you look at these private sector opportunities and the belief how can they foster it, they'll be looking to that, that's one question i would pose and i know was asked earlier too by the audience is what can be done to basically foster an environment to move these forward in the private sector and what can be done to reduce those burdens. this is something that congress has indicated they're interested in. there was a hearing that was held where they were asking these very questions and i think that's an opportunity for folks outside of these public programs to move forward, to continue to show that leadership and show that innovation so the health care system can move forward in a good way.

>> thanks. dr. burgess raised a couple of questions, which is probably a good thing you didn't answer them, does policy drive innovation or does innovation drive policy or does innovation drive in spite of policy or independent of policy. i think that's probably the better way to think about it. there are an awful lot of people who seem to think that all great ideas stem from the expert minds in washington who are insulated from much of the real world and i think -- i think that's a real problem when it mz comes to setg policy because in the end federal policy will drive an awful lot of what goes on. the first panel at least one of these speakers, several of speakers i think, pointed out

that there's a tendency for federal policy to want things to be uniform across. medicaid there's even a pressure to be uniform in the medicate program and that's a real problem and one of the lessons we can take from the private sector is that uniformity doesn't generally work unless accidentally you can find two situations that are fairly similar. with that, karen, take it away. >> thanks for the invitation today. i'm going to do a litany of items because i want to make sure there's time left over. what we do want uniform is we want high-quality care uniformly. how that's done in local areas could differ, but i think with the opportunity with telehealth and the opportunity to spread information quickly exhib, ther opportunity to think that we

used to think that high quality care only happened in certain parts of the country, there's an opportunity to make sure that we can get that across the country. i do think we would probably agree on that. i do want to pick up a little bit on macra and the idea of bringing in the private sector. this was the physician payment bill that passed several years ago and for several years prior to that there were a number of hearings done by both on the house and on the senate side that brought in the private sector. employers, physicians, providers, health plans, and said what are you doing? how are you working with your physicians to ensure high-quality care in a way that also is fiscally prud dent and there were lots of letters and discussions that went on. sometimes while legislation can take a while to happen, that can be a good thing because it allows for that type of discussion to occur and i think that's in part the reason why that bill was so bipartisan and had a lot of support by the physician community and the

provider community and others is because they were so much a part of it. and i think that's important. let me point to another example of that that's happening more recently and that's an effort on the senate side in the senate finance committee that's been working on a chronic care bill, particularly for the medicare program, the chronically ill are the most expensive segment of that population and trying to get a handle on making sure that those individuals have high-quality care and in a way that can also look at the cost of that is very important. so senators hatch and widen and senators warner and isaacson come together and led the finance committee and had again a lot of discussions with outside groups about what they were doing with the chronically ill and put together a white paper and introduced legislation at the end of last year. bipartisan legislation that was introduced to look at ways to

improve the care that the chronically ill receive. i think that's going to be an effort that's going to continue because while there can be disagreements on one issue, oftentimes as clay and i and others know, there's discussions that are going on where people agree on other issues. i think chronic care is one of those areas that we should watch out for. the panel before talked about quality and the need for quality measures. i was pleased that in the physician macra legislation there was money put in there, $15 million a year for five years for quality measurement development. the measures have to be public. so identifying and was mentioned before getting good outcomes measures and getting measures so we don't need hundreds of them but can get to be a subset to

identify what's high quality care is important and i would argue that's almost a governmental role of saying quality matters to everyone in this country and government has a responsibility to help fund those measures rather than put them on physician groups or provider groups or health plans, et cetera. lin lynn mentioned quality alignment. i think there's a role for the government to work with the private sector and some of those efforts are ongoing right now with voluntary efforts that are occurring between the medicare agencies and some other health care plans but everyone would agree and we took lots of meetings where that was the case. where providers came in and said how am i expected to do this when i have different payers and yet i'm expected to do all of these different quality measures. in the midst of everything else that's happening right now, lynn

mentioned about the health i.t. area. in 2008 or 9 the government did put funding into encouraging and incentivizin incentivizing. hospitals took some of the money and put in a lot of health information technology. put they a lot more money of their own and physicians also put them. so you'll go into a lot of physicians' offices and you'll see kpurcomputers. how do we utilize that to improve care? i think that this administration as we look forward has to continue to build upon that and see how we can utilize the private/public sector role to take information and make it not just technology, but into

information. to build upon that it is the data piece and getting feedback data. macra -- part of the reason why people view it so favorably is because they've tried to address these issues. talking about from the medicare perspective making sure the medicare agencies give feedback to the physicians so the physicians can see what's going on for what they're doing, but when their patient gets into is a hospital. what about post-acute care? it's by far not perfect and i would say one of the issues is that the government and the medicare agencies don't have probably the systems they really need in place to efficiently turn around feedback data, but there's a recognition that needs to be done and in the midst of everything else that's being done these are areas that probably need to be looked at. when we look at value, the other thing that we've been seeing as these alternative payment moldes

is we're learning more and what we're starting to see is that socioeconomic status makes a difference. while providers can do certain things, sometimes the conditions of their patients, the environments and where their patients live and whether they have a family caregiver around them or transportation or good nutritious care around them effects how much health care they need. so as we start to look at policies, we need to look at issues that we haven't looked at before. things like more risk adjustment, et cetera. then finally, i think on my list, is that when we talk about the private sector, we probably do need to look at the anti-kickback rules that were set up in a different era where we were trying to say if anyone

talks to anyone else, they're trying to influence them to get a kickback for the care. we're in a different world now where we're trying to encourage collaboration, encourage coordination and that's an important law that needs to get done. now, i'll just finish up with saying one thing. i was asked to be here because of my background working with the senate finance committee. i'm now the chief public policy officer for the association of american medical colleges and i can't el take 30 seconds to say as when i hear about the private sector and look at reference pricing and giving more transparency about the price of providers, as we do that, again we cannot look at those issues in a silo. we have to look across the board in terms of all of the health care that occurs. so if you look at the major academic medical centers in this country, they're a subset of the population, but they do all of the physician education and that costs money. they are the places where

there's standby capacity and if there's a next ebola crisis occurring, they have to be ready to be able to do that. that costs money. and historically medicare has paid a share of those costs. not all of them. to be honest, the private sector has probably picked up some of that. to the extent we're going to get more transparency about how much it costs to provide care, we're going to have an honest discussion about how those other costs that benefit everyone are going to be taken care of. i encourage us that we have to look across the board on all of those issues. >> okay. that should be easy to handle. some irony, i don't want to admit how old i am either, but i do remember in the early stages of my career back in the dark ages, that we were talking about

care coordination and that's the same era that the kickback rules were put in which meant that once again washington policy makers did not understand that things are connected and that's one of our biggest problems. we don't understand the connections and of course it's -- many of these things are hard to see until you do something and then realize that you may have a problem and then the issue is are we able to then admit that it doesn't work any more? i think that's going to be a real challenge for the foreseeable future. please take it away. >> thanks, joe. it's great to be here with all of you. maybe what i'll try to do is draw from that earlier panel we had from the large employers because i think part of our task here is to say what lessons can the public policy committee learn from what the large employers are doing and then step back and talk about the more boarder context of my views

on my two bits on what conservatives and republicans in congress can do on health reform. the first is the discussion of account based reimbursement. health savings accounts, fargo did a great job of how they're seeing quite a bit of satisfaction, improvement, et cetera and one of the most promising aspects of the new reform environment we're in is i hope we can broaden the utilization of those efforts. we've been living in this era for about 50 years now where the central dogma of health care economics was handed to us on stone tablets by ken aerowho said that the laws of economics were suspended when you talk about health care. i think what large employers are

relearning is that the laws of economics are not magically suspended when we talk about health care. that the laws of economics apply to every good and service transmitted in the economy. if you give patients more control over the health care dollars that are being spent on their behalf, you have a more patient-centered health care system. that shouldn't be surprising but sometimes we struggle to appreciate these basic lessons in health care. more agency for patients, for consumer is better. the second point i'd make that i draw from the discussion was the value of longer term relationships between payers and patients, this was a missed opportunity with the aca where there's an enrollment period every year which means if you're the insurance company enrolling that patient for a year, a lot of the long-term preventative work that you might want to do, you're not sure you're going to capture the value of that work

down the road. we heard about the high price of hepatitis c drugs and we should pay that high price, but that insurance company didn't capture the value of that because 20 years down the road they're on another plan. one thing we can learn from switzerland is if you a five year insurance contract rather than a one year insurance contract than an insurer says if i invest in prevention, i'm going to yield those savings down the road and that can translate to lower premiums for that enrollee. the more we can move to longer term relationships and have insurance contracts that reflect that, i think that's going to be a significant value driver that a lot of us aren't talking about in the policy world. the third thing i'm going to

mention is price. 20 years ago there was a great piece written it's called the price of stupid. we all talk about utilization and say you know we've just got to reform delivery and tweak this and that so people don't go to the hospital 20 times for this, that's all great and we should do that work, but one thing we should understand is that we all complain about the high cost of u.s. health care, but utilization is not the driver of the high cost of u.s. health care. to take one common metric of health care utilization, which is the average length of stay in a hospital, we're one to two days below the average for an average stay in a hospital. we're better than our typical european or canadian or australian peers as getting people out of the hospital. the problem is that the average day in the hospital in the united states costed five times as much as the average day in the hospital somewhere else and that's not because we're doing

five times as much stuff, it's because the mri costs six times as much or the drugs cost 50% as much. it's the prices that are driving high cost in the united states, much more than utilization. we should do what we can to make sure we're not doing inappropriate care, of course, but if we don't tackle prices we're not going to lower costs. i think that the experiment that cal pers did with reference price in orthopedics i think is incredibly important because it showed that you had a lot of providers that said we have to charge $40,000 for replacement because that's our underlying cost. we'll go broke. we'll close. they said sorry we're not going to pay you $40,000, we're going to pay you x and if you don't take x the patient will go somewhere else, magically the providers said that's a great price. that's awesome. there's an enormous amount of

fat in the system based on prices that people are charging and this distortion was created by the employer tax exclusion and the medicare system. the more we can move away from that and give payers more flexibility and latitude in pricing, particularly in reference pricing, i think that's important. i want to thank joe because yef et and i were classmates 30 years ago so you've given me the opportunity to run into her after all this time. she's probably going to kill me now. let's draw back and say what does this mean for the health reform environment. i want to double down on something and that's the importance of bipartisanship in the discussion. i'm concerned that a lot of republicans while they've criticized the aca for being

passed on a party vote are either resigned or eager to do the same thing in reverse as opposed to trying to come up with a durable health reform that has the support of at least 60 senators. i think that can be done. to give my think tank a plug, it was built from the ground up to be the kind of plan that can achieve the objectives of both democrats and republicans. it's designed to cover more people than the aca, improve health care outcomes for the poor by reforming medicaid and reduce spending, taxation and regulations and costs by utilizing some of the techniques that we talked about. it doesn't have to be exactly like that, but that general set of principals, let's try to achieve the government expansion and marry that with less government and more krocost

control. that can be done. i want to encourage republicans to that and i think that's how you're going to get to 60 votes for any replacement for aca. if we don't do it then the result of this new environment is not going to be satisfactory to anyone. what you're only going to be able to do is take the tax credits that the aca was spending and maybe spend them in a slightly different way but unless you can change the other regulations that are not subject to the reconciliation process you are not going to get to a patient centered health care system. >> thank you. that's a great way to end the formal remarks because it leaves one with the sense of despair. one of the big issues of course is how do you make that straddle from a system that in many ways hasn't worked to a system that

might work? and i think that's going to be one of the big challenges for -- not just republicans, but for democrats and even more importantly than the health sector and for patients and consume consumers. there's a lot of talk, especially in the press, that this is somehow just a political issue. and that's wrong. it is true that a lot of middle class people have no idea how the aca may or may not have effected them. they have no clue whatsoever, but they also don't know what they pay in premiums generally either. it doesn't mean they're not being effected. as we go along i think we're going to see both because of the pressure for a kind of price transparency that probably isn't useful, but also the reality that employers, which is where most people get their health insurance, employers won't be able to conceal the fact that they're taking -- they're taking

the money out of wage raises and putting them into the health sector within i think we're going to see some problem there no matter what washington does over the next year or two. there's so many issues here that i could personally take issue with, but why don't we see if other people have complaints to make before i start ranting and raving. >> let me -- since i talked about reference pricing and karen did as well, let me make one point about this issue of how reference pricing effects academic medical centers. i went to medical school. i appreciate that medical schools have costs that are different from a community hospital. it doesn't seem to me that the right way to subject is a dies that is to make everybody pay for medical centers. >> i think that's a conversation

worth having. you need with these type of system to see have the stability over time so that the direct subsidy would be stable over time. i think it's a discussion worth having. i don't want to turn that into that type of discussion, but let me just add that we talked about value based purchasing and alternative payment models, we have seen over the last five years that there has been a slowing in the growth of health care spending and some people say is it the recession? is it really a change in how we're providing health care? we've seen it in the medicare program as well and those people for the most part are retired. it's not saying we're going to hold back on our care. i think we've seen some positive signs about the ability of providers to come together and actually try to work on bending the actually cost curve. so because what i worry about is that sometimes the easy decision for the federal government is to

shift the cost, reduce the federal government spending curve, but the costs move over to the states or move over to bi b ben fish ben area. >> if you spend less money then that means that hospitals will get paid less, doctors will get paid less. >> not necessarily. if you cut out the middleman and reduce the -- >> wait a minute. this isn't economics. this is accounting. >> not at all. what are hospitals and physicians spending a lot of money on? it's not merely revenues, it's also income. so if you're spending -- if you

get it and you're big for a lot, but you're also spend ag lot on compliance and regulatory costs and other things, then you're actual income is lower. yes, you can spend less money, but if you actually stream line the system so that the cost in caring for patients in terms of billing, compliance, if you can reduce those costs, you can end up with more savings in the end and a system that stakeholders appreciate more. >> certainly if you could reduce administrative costs to that extent, i would agree with you. the issue goes back to will we ever really divorce ourselves from fee for service payment. basically all payment systems have a fee for service base because you have to start somewhere. and so i'm a big fan of

capation, but below capation the doctor has to be paid and what's the basis for that. the big hmos don't like to talk about how they pay their individual practitioners, but it's highly likely there is a volume basis at least in part, there is some kind of a performance measure that isn't just volume based. it's a very murky system and there's also probably a salary component, a base of payment for practi practitioners. it's not clear how this miracle will occur. >> joe, there's plenty of ways you can get to the miracle, but let's be clear. i agree with you if we didn't have fee for service we'd have to invent it. we have to account for what's going on, but you can do that without having 1,500 different payers have very different ways of paying for roughly the same codes.

what we've got to do is -- i'm back to alignment. that's my thinking for the day. what if we agreed that all of the payers would have the same set of quality metrics by which they're going to judge the individual providers? yes, you can pay different levels and yes you might have different forms of incentives and reward, but as long as the metrics are the same and as long as the provider has clear incentives that are applicable across all payers. i'll remind everybody of claims adjustment algorithms. a lot of that stuff -- 20 cents for the hospital to get paid, that is all about having all these different payers with different rules about how to get a claim accepted. what if we had standardized way to do that? you know we do, we just don't have the courage to enforce

those standards in a way that would achieve the efishes. it is achievable. we just have to have a more targeted curve. >> this is where health care i.t. can play a role. you don't have to have one size fits all standards if technologyists can play a role for providers and payers. that is restricted by anti-kickback laws. that's a whole area of work where it's not very sexy, but where we need to spend more time so that whoever we want to put in that bucket can do the work to be able to interface and create a system where everyone can work together and take those -- take those costs out of the system. >> let's be clear, we don't want to turn this over to epic and say good luck, because the fundamental problem here is that

no one is focused on getting the clin clinician all the data they need. >> they're legally barred from doing that because there's certain types of information -- they're barred from doing that if they make money doing it. >> the biggest problem is somehow and we can talk about how if there's enough licker in this building they own the data and that's wrong. we've got to fix that. then we can fix everything else. >> economists -- >> that's your point of view. >> exactly. >> when you talked about the fee for service basis and that's always the structure, when you look at macra that's a representation of trying to move

away from it when you look at the quality payment program because -- >> that's really great. >> just meaning with mipps, that's where everybody is situated now and we're trying to move into alternative payment models, but that's where the ideas from this morning's panel are trying to be represented in private programs in the public/private alignment. >> okay. we want to get into an extensive discussion of alternative payments. we'll get some questions from the floor. this has to do with a fundamental issue that several people alluded to, which is the short-term view that health financing and health policy takes basically on everything, it's somewhat ironic.

the medicare program ought to take a long term view because with the baby boomers they're stuck with them for 20 years or more, but yet the policy is or ented to one year. if there is broad thinking, but where it really matters is year by year. that's a problem. it wasn't emphasized in the employer panel, but you would think that the large employers would have a longer term view point, but i think they're trapped in the mechanics of short one year contracts with health insurers. clearly the big employers recognize that their workforce, at least the highly skilled part of their workforce they want to hold on to. that's also a long term relationship and yet all of the financial relationships have been to date really more focused on the short-term than the long

term because it's so hard to capture what was the result of whatever you did upfront as a health investment, how did that really effect health and how did that effect cost even past the first year. it's really hard to know. i just wanted to make that observation as something we all need to work on. >> that's why i made the point about long term insurance contracts. >> right. >> i think a lot of people have been thinking about long term insurance contracts for a long time and the reason we don't have them is because insurers don't want them. let's think about what the deal is. insurers want the freedom to observe you turned out to be sicker than i thought and patients want the freedom to observe i don't like the way they're treating me. so we do have a tension between the absolutely efficiencies of longer term commitments and the reality of both choice and protection from risk. let's remember the providers, god bless them, are just

learning how to do risk. we've been overpaying them for quite some time because price is the thing. we have been overpaying for quite some time. i'm not sure i'm going to be pessimi pessimistic about the fact that the providers in the world don't want to go to a multi year risk contract. i think we should acknowledge the good stuff that going on there. >> the only question is how many decades into the future and i think part of that does have to do with government policy, and medicare is the big payer. if medicare doesn't push against its own comfort levels, which are far closer to the body than i think any employer -- employers are willing to take chances because there's money at stake, that they -- >> let's talk about risk and why

medicare's focus is so short. you know as well as i do it's because of the people we elect and the fact this ey have to wo a lot about getting elected quickly. if you're a two-year congressman you can't be talking about 20 years. you have to talk about what can i do today. you go back to this chronic care model. it's long term thinking. it's uniformed by evidence. you got to encourage the congressmen to think longer term. how do you do that? you tell me. long term contracts? >> i'm sure there's some kind of a pharmaceutical -- >> long term contracts aren't for everybody, but i think having the option of long term contracts in a way that the federal policy inhibits against them is the point. >> medicare is pushing the risk to the provider or to the plan and it's moving the idea that's

where -- it's trying to do that. >> right. i think having organized health plans really helps this effort. so it may be more -- it may be more optimistic about this movement in major interactions. >> speaking of learning while you're doing, think about how medicare advantage today in my view is much stronger than it was 20 years ago precisely because so many americans have had experience with managed plans and managed care is good in many ways. that's going to be true across the board in these private sector initiatives on teaching consumers how to be smarter consumers. my mother was not a smart consumer. i loved her very much. she died in 2004. she did whatever her primary care doctor told her to do.

but my child does not think that way. so fundamentally it's about learning behavior that can help us be better consumers. >> okay. so with that i agree. with that are there questions from the audience? let's see. raise your hand. there's a lady here. >> thank you. meg with the national quality forum. you mentioned the importance of alignment, but i'm sure you understood how wed people are to their quality measures, how you're shoes are good, but my shoes are better mentality. how do we overcome this challenge. >> that's your job, isn't it? >> we're trying, but we've got some pushback here. >> i would encourage the following historical metaphor. con stan teen when he took over

the empire had a problem and the problem was christianity which he decided to make the religion of the empire was split between those who thought jesus was a man and those who thought jesus was a god. he said to them i don't really care if jesus is god or man, but you all ain't leaving until you decide. so what happened? it turned out he solved the problem. you got to have a deadline. you got to have a sword and you got to have a very clear instruction. if my opinion, just for what it's worth, you could get the relevant players in a room -- probably -- you want cms to do it. cms can't dictate it. but what the sword might be is you all have six months. i don't care, but if you don't agree we're gonna do it our way.

i guarantee you they will pay attention to getting that fixed, but you got to have the sword and the deadline. just a suggestion. >> one of the things that has bothered me about this concern about hundreds of measures, on the one hand everybody's right about that. that's too many measures. if you expect everybody to report on them, but one of the issues is that some measures are actually appropriate in some circumstances. so it's a much more complicated world as you well know than i think is often portrayed. it's really difficult. >> we sent you out there without the sword and we're very grateful for what you do, but you can't really make them do it on time unless you have the sword. so you have to combine the sword. you don't want cms dictating before the private sector has a chance to work it out. if you do that a lot of examples in history would suggest that's a feasible alternative.

>> next question. there's somebody back there. >> good morning. i'm with health care dynamics international. this has been an amazing panel. one of the questions i want to ask, we have the opportunity of working across the country trying to do the transformation of clinical practices and we're seeing the challenges with the small practices. clearly the data, you're exactly right. they cannot get the data. they're almost held hostage by their own data. i appreciate your comment about the social determinatives because many clinicens are trapped by the challenges that their patients -- that the diseases and the social -- health care is far more than health. so my question to you is what

are some solutions that you as policy makers and analyzing this around this ehr, that's one of the biggest barriers across the system, but particularly with a small rural docs are facing. that's one question around ehr how do we get around this. two, what are some of your thoughts around risk adjusted payments because as we move through acos. there's the option of cherry picking. how do we manage those. those two big issues, ehr and risk adjustment payments, particularly with a focus on the small rural docs. thank you. >> i'd love to make a macro point. there was a copy of the wall

street journal in front of my hotel door because the hotel had in their database that i like having the wall street journal in the morning. there needed to be no regulation from the federal government to rekwiequire my hotel to deliver wall street journal to my room. they did it because they had an economic incentive to provide high-quality services to me so i keep going to that hotel. in the rest of the economy, i think it's always useful when it comes to health care is how does the rest of the economy doing. the rest of the economy there needs to be no regulations around mandating people to use digital data because it's in the economic incentives to be as digitized as possible and as economically efficient as possible. it's only in health care where we have to mandate it because the incentives are so driven away from the patient relative

to other sectors of the economy. the more we can reform the health care system broadly so the patient is in control of the health care dollars, i think a lot of the stuff will -- so long as the federal government gets out of the way, but at least doesn't actively try to sabotage it will get better. >> look at what's happening in the real world where it's working. go back to tulsa, oklahoma, where this engineer undergrad m.d. professional figured out using banking colleagues how to extract the data from the individual rural practices, small practices, in such a way that the doc doesn't have to do anything. they finish the exam. close the record. the data flows straight that night, takes all the patients from that doc, gives them back a profile. you have three diabetics, you

have five with heart conditions and three of them coming in tomorrow haven't been here in three years. that comes back to them in a dashboard in the morning. you walk in and there it is every single day. how do they do that? they do it through software that is imminently achievable. it can be written by my graduate students, but they have essentially penetrated the wall that prevents this from happening in most of the country. why? because the vendors were given too much power by the federal rules. some people in congress wouldn't let them impose rules that might have been more productive. let's fix it and it's fixable and you can find examples where it's working. >> in the 21st century cures act there's a significant amount of work that will push to the office of international

coordinator because there's concern among folks around the country, but they are trying to push for it. so that's something i think you'll see. i agree on the consumer. the consumer is really the key to this and the more the consumer -- i think the ar, the consumers are demanding this type of information as folks care for their parents or care for their kids and are dealing with these records issues, i think they are going to be what pushes us forward. but i would say the providers are ek i can't wiqually as frus. they want this to work. they want to be able to share it and do it in a way that makes sense. it's a very complicated with a ton of information to share with a lot of privacy concerns around it. it is different from what you see in other parts of the economy. >> there are solutions. >> just to your other point, we continue the same as on the quality side on risk adjustment

that we need to get this more fin esed. as people live longer risk adjustment is going to get increasingly important. >> and increasingly difficult to do. another question? anybody else? okay. go ahead. >> thanks for your presentation. i think that common sense is the price and the cost depends on the consumer to say how much you want to pay or whether you can afford it. i think this is totally true. you can see the drug may be more useful than you go see a doctor who you know is not going to give you anything and maybe refer to another doctor, another hospital and everything and eventually it is a disaster.

i wonder if the information from all those providers can give the consumers information like treatment, everything is supposed to be maybe in regulation and there are supposed to give the consumers or patients and their family, but that's not true. you have the right to complain, but complain in part of the process. are we having a real mechanism to better procedures or complaints or have a record of a complaint result in resolution if we can have all this information available and we can see which officials are doing right, which are doing wrong and which is totally a disservice. if we can move this direction so we can have a better choice of providers and we know whether we

are really in trouble in terms of health or in terms of financial situation. >> so that's a really good question. it boils down to getting consumers -- we could call them patients and their families -- to better understand both their condition, what the ochptions a for treatment and what the options are for providers, what the aftermath of the treatment might be and of course cost and one of the problems with the -- i think with the transparency push in washington is that they want to talk about list prices all the time when in fact what the average person really wants to know is what's it going to cost me out of pocket? it is true that for a lot of purposes policy purposes you really do want to also know what the actual transaction price is. but for the average patient they

tend to focus on dollars out of pocket and even they are ultimately paying the rest of it, we need to address those issues too. >> well, there are tools to do everything you asked for, which is quite reasonable. i would say the difficulty we have right now, the difference between where we want to be and where we are is that we put a pretty big burden on the patient to ask all the relevant parties all the relevant questions about themselves and in some cases it's really the laws and regulations that prevent this stuff from flowing as easily as it should, but i would just observe that burden on the person to ask the question is part and parcel of our philosophical attraction to the notion of individual patient choice. so it's hard to push it unless t the patients ask for it.

they can generate the relevant clinical data for a particular patient in that physician's office, but not necessarily every physician you've seen in the last three years and e.r. you may have been for an emergency or whatever. so getting patient control and access to the totality of your records we need a system that enables you to access that every morning or however often you want to go to a doc. it's feasible and there in technical terms, but not in legal and administrative terms. >> very good. one more question. >> thank you all for the panel and discussion. several of us have alluded to market forces and of course today we haven't come back to it yet and this consumerism discussion opens up this issue as well whether some of you believe individual consumers will counter the large dominate forces in consolidated health systems and health plans which

are in fact to the point about price setting which are driving higher prices in a lot of situations. our employer friends often find themselves victims to prices that they don't have the power to negotiate down. what do you foresee as the policy options in the next few years to address the effect of consolidation on price that would bring all of u.s. pricing into more alignment with international norms. >> it's a great chapter. there's a chapter that addresses this problem of hospital consolidation. unfortunately a lot of federal policy like the aca and macra are facilitating and encouraging consolidation because of the compliance and regulations you can only get to that point with economies of scale. so that's a huge problem. i think there's a couple of

things you can do to improve hospital or improve provider competition. the first is we can do something at the state level where there are a certificate of need laws and other regulations that prohibit new providers from entering the system and same goes for physician-owned hospitals and the anti-kickback side of not wanting physician-owned hospital ur. i think have to go give more to litigate on an anti-trust bases. if unitcomcast and time warner e want to merge, but if it's the local hospitals in cleveland or the cleveland clinic is buying up, that's too small, even though it's an anti-trust problem according to all the metrics economically, it's too

small to get involved. i think we need to do more to draw resources to federal agencies to attack that. i think the last thing and something -- this is sort of more out of the box idea is that you could conceive of a system in which there was an automatic trigger. instead of relying on doj and ftc litigation, you can have a situation where provider concentration in a certain locality exceeded a threshold of concentration, if it exceeds a certain threshold where you're at a mon oppositely level you trigger a rate regulation. what you're saying is if you want to stay independent and compete with each other, do that. if you think through merging you can have economies of scale lower cost do that. if you're merging to get market power and jack up prices, we're

not going to let you do that. >> okay. one of the issues has to do with willingness to pay as well. i think this is where the employers play a really critical role. employers represent their work forces in not just health care, but in general in terms of total compensation. so i think if you were to ask the average employee if we could give you $10 more would you like to spend it on health care, the answer would be no, almost certainly. so the ability to resist i think is very important. ultimately the problem we're talking about is a problem of good economic times.

and we can't complain about good economic times, but the reality is it's very easy to say we'll pay it because we don't feel enough pressure to push back. we may be headed in that direction, not from the standpoint of a negative economy, but from the standpoint of really the lack of balance or the misbalance between health care and everything else, i think we have gotten to the point where we may be at the tipping point in which case employers really have a job to do. we're counting on you because we in washington would really rather have somebody else do the work for us. >> could i make one suggestion on the employer front and that's particularly struck me from the multi state employers, find a way to share what you know about price and cost differentials across this country. because the deal is medicare dictates prices.

they don't pay variable prices. geographic adjusters. you all pay all these things, but that's not part of the database that triggers the doj and ftc. economists discover it by random chance, but you know it every single day. figure out a way to share that. there's got to be a way. just show up and have breakfast. >> okay. well good. we've expired our time. please join me in thanking not only this panel, but the entire group of people.

sunday night on afterwards, radio talk show show hugh hewitt talks about his book the fourth way. he's interviewed by s.e. copp. >> what should the gop do to avoid sitting on their power and not make the most of this opportunity which could be over in two years. >> the democrats thought they had a long time. they thought they had super majority so they did the stimulus, $850 million and they did obama and dodd/frank. all of that will be gone in two years. it will be swept away. there be no trace of the obama presidency. the $850 billion you can't find. >> sunday night on afterwards. cspan, where history unfolds daily. in 1979 cspan was created as a