they have in place? this is not about having a single bullet. this is about being very comprehensive in how you think about care. when we think about the community, we do things that are unusual for health insurance company. we were the major advocate for smoking cessation in hour state. we have beat tobacco, we took that money and plowed that back into taking the smoking rates down. we also do things like complete streets, where we advocate for sidewalks, bike paths, safe crossing guards, things that a health company would think about as opposed to perhaps an insurance company. :

>> and back to the employer who is delivering that care. so it absolutely has a return, and it's absolutely critical. minnesota has a 17% smoking rate. the country has a 22% smoking rate. blue cross blue shield of minnesota has a 10.9% smoking rate. we are dedicated to this. we know it works. there is a return on the bottom line. when we look at excess risk in

the system, if you go to this next slide, it tells you that if you are talking about somebody with normal risk profile, it's at $2200. it goes on for each of the risk profile elements that come up to that particular patient's profile. so it's critical that these preventive situations are dealt with on a preventive basis and that we get out and make a change in the way that care is being deliberate. i next want to touch on innovation. innovation inside of minnesota has been one of the hallmark features of that community. certainly with the retail clinics coming out of their, with consumer directed health care coming out of minnesota. lots of things have been launched there and have invaluable. our new payment model was going to be one of those things as well, but we have recently announced that blue cross blue shield of minnesota that we're going to be paying for ongoing care. on line care is honoring the

physicians time. a physician talk to you on the phone, watching through a situation, they get paid nothing for that. they are paid when you show up at the office. so when we look at us, we are going to be paying for that on line interaction. we have a partnership with american well it it will be an ideal setting to a webcam exchange with a physician, but we think this has a world of potential there if you think about situations like you have a chronic nasal infection, you know exactly how you're going to be treated. you go twice a year. every time it's the same thing. deposition tells you they've been into the office because that's where they get paid for sinew. if they tell you over the phone and send the prescription and they don't get paid. on line you have the interaction on line it takes 10 minutes. you never show up in their office. they spend their time on something more important. you spend your time on something more important. your employer is happy. there's a win here for lots of

interactions that happen in the system. for everything, it's not that it absolutely can help take some of the expense out of the system. so this is just a quick screenshot of what that looks like. we're actually talking about a video transmission from the patient and the physician. we think it has a lot of applications for the rural parts of our state. and about being an role minnesota and being able to have an interaction with somebody at mayo on the phone line or somebody at the fairview health system. there's lots of opportunity here for that to take off. in summary, we have been tackling cost. we have been looking at improving the care through collaboration. we see ourselves as a health company. i know i went through this quickly, but we are committed and passionate about what we are doing there. and the last thing i will leave you with is a couple of comments for this process here in washington, d.c.. payment reform and medicare, absolutely critical. that's where we should be

spending our time, energy and effort. individual mandate in exchange for guaranteed issue, we are absolutely onboard with that. medical malpractice reform should be a bigger part of this discussion. defensive medicine happens because the malpractice situation we have in our country your leadership on end-of-life care, this is a place where that discussion can happen. advance directives is a minimum part of the discussion but there is so much expense there and it's not something that's been getting a lot of attention. guidelines and certainly quality requirements are an absolute role of the federal government. i'll leave you with minnesota has been a leader, is a leader, looks to be a leader in the quality of care via delivered in this country. this is too big an issue to be a partisan political issue. this is a doubt delivery quality of care for every single american and we are committed to. thank you. [applause]

>> thank you, pat. it's great to see that even though minnesota is so far ahead they continue to work so hard to improve their delivery model. now i'd like to introduce mark mcclellan who i'm sure is also well known to all of you. he is the director of the ingle brooks center at brookings where he draws on his public-sector experience having led both cms and fda. of course he also brings his background as a physician and an economist to that role. mark most recently has been playing a key role in the development of the dolby girt daschle plan, and important bipartisan agreement on health care reform. markle described some of the multi-payer initiatives that he's involved in that also can serve as a model for health care reform. >> thanks, nancy. it's great to be here this morning with all of you. how are we doing on slides? coming up. okay.

like i said, this is a very distinguished panel. i'm so glad people are taking time to be here and that we are seeing so much discussion around payment reform and improving health care works as part of health care reform. i am going to talk about that, as nancy mentioned, focusing on things like accountable care and multi-stakeholder approaches to doing this. that it is very refreshing to see how much and emphasis there is on getting these kinds of ideas into legislation. this is something i think can be very bipartisan. i see a lot of congressional staff. i know you're all working hard to actually improves a benefit, improve care and is paid for. and that's really hard. nancy mentioned the efforts that we've been providing technical support for at brookings by a book called made up of former majority leaders in the u.s. senate so senator dole, senator daschle, senator baker, senator george mitchell is working with is also.

enough that a new job and is doing middle east peace and i am looking forward to asking which one is more difficult. but in that effort there was a major set of proposals related to health care delivery form which fits with a lot of the discussion that we've had here today, and this is not the right presentation, sorry. let me see if i can talk while we are getting the right one of there. it should be identified for nihcm, but the points are pretty basic. what i want to emphasize is that as part of bipartisan health care reform there's a lot of emphasis on getting better information through using health it to support decision-making, through developing better evidence on what works for particular patients and what kinds of policy work best for decision-making. those are important policy steps that in themselves are not going to be enough. they are tools, they are enablers but they are not going to be enough. to all of this that you have been hearing about today on

reforming payments to providers and moving towards paying for what we really want, better health, lower costs, as opposed to fee-for-service is also extremely important. third key element is consumer and involving patients through benefit reforms. we've talked some about that as well. i've heard about that in the last presentation. you can think a lot of the reforms are being considered on coverage fitting into this goal as well. insurance market reforms are making sure everyone has access to a range of choices of health plans, the competition among health plan is based on treating each patient better, lower cost that are out, not by selecting healthier individuals. we talked about the insurance market reforms and we need to get there. tax reforms. things like having to health insurance, exclusion from employer-provided coverage. maybe not the first thing that people would like to do. is a limit on the government but it is another step towards making consumers, making people

more conscious about their health care decision. so a big focus on delivery and bipartisan health care reform and all of those are elements of this comprehensive bipartisan policy center proposal which i encourage you to take a look at. there are some lessons now moving more towards correcting my piece of this discussion about payment reform and what can work. there are some lessons from examples that are taking place around the country. some of what you are a heard about today about effective ways reform payments and to promote these kinds of delivery system reform. one is to put greater accountability on to quality and cost. so instead of paying for more services, more intensity, there's another point on your. to increasing value and that does mean more responsibility for providers, or patients on getting better results. you heard about that from some of your other speakers as well. there have been a lot of

discussions about whether this is really going to save money, whether this kind of accountability and payment reform can really save money. i want to come back to that. what some of the proposals are doing to get the support of the congressional budget office, that they really are likely to lead to savings is building in some other kind of traditional approaches to saving money and medicare and other public programs by reducing update rates, by giving providers somewhat smaller payment increases from year to year. but giving them an opportunity to not have to deal with that just any traditional way, despite dealing with a lower payment rate per service by increasing volume or seeing more patients, things that don't really do anything to improve health care. moving another way forward to get to those achievable, at least savings that many people think are achievable in bending the curve on health care cost. again, very important part to make sure that consumers can get involved and we have a very diverse health care systems of these reforms need to be able to

work with a wide range of practice settings ranging from some other pre-advanced integrates systems that you just heard about from patrick to solo practitioners working on their own and rural america. this slide talks about different, a way of maybe putting some of these different kind of payment reforms proposals together. we were working on this, not only in alphabet soup but a whole range of different kinds of ideas. all of which have the same goal of getting better quality and avoiding unnecessary costs. and i want to highlight again getting to accountability is the key part of this so there are some proposals out there that really are about supporting better performance, and probably will have an impact. things like paying for reporting. something medicare does not. many private payers do not. that gives us better information, gives providers better information on opportunities to improve care, focus his efforts and can lead to improved specific aspects of care.

payment for better coordination services. paying for things we don't pay for now to help people stay healthy and get better care, like medical homes where we don't have any payments now for answering e-mails or using records to track a patient and how well they are doing and filling their prescription and providing those kind of medical home services. you can go further to actually pay for better performance in some dimension. the so-called pay for performance or p. for p. elements that have been demonstrated and medicare in the private sector do show an impact not just reporting. paying for when you get better compliance with diabetes medications for better results and other specific aspects of care. the challenge with these though is that there are so many dimensions of important dates so many dimensions of important quality care even if you get improvement in some specific area it still can be hard to have an impact on overall cost and overall health outcome for a population. so in many of these

demonstrations will we have seen it you have an impact on a specific aspect of quality of care that are measured, but maybe less an impact on overall cost, additional payments you make for improved performance offset some of the savings that might occur because you got improved performance. that's more of an emphasis on trying to bring cost, reducing unnecessary costs directly into these performance incentives. a lot of effort is underway now to implement episode payments where there is a payment based on a particular procedure like a bypass operation, you know, everything is included with a hostile care, the physician services or maybe a case based payment for diabetes and all these might be adjusted for the severity of illness of the patient. the idea is you get paid the same amount or maybe more if you deliver better quality of care in this episode. those payments take those kind of measures and those kind of payment reforms can be very important in getting the better

quality. the challenges that one way of improving health and reducing costs is to avoid many of these episodes in the first place. maybe by avoiding the bypass operation, or reducing the level of complexity of diabetes or preventing it in the first place, it might be a better way to get the better health and lower cost. if you just focus on episode not going to incorporate that. very important element of getting to higher value in health care. so some efforts are focusing more directly on paying for higher value. i'm going to spend a few minutes talking about accountable care organizations and accountability for getting this goal met, getting better outcomes for a population of patient, better health for population of patients at a lower overall cost. and that can be done through a shared savings, so this can be added into current payment systems without radical change to give providers an opportunity to share in the savings that they create when they take steps. they currently are reimbursed or not enough or are being reimbursed exactly for the right

patient. whatever it takes to get better outcomes and reduced the average cost of the patients they are treating, should provide better support. it should be channeled back into better support for those providers. and even further along this senator, i does moving in the section to be distinguish what he is doing in massachusetts have capitated payments. very important difference is there but the basic idea is putting more weight on an overall goal of meeting our cost target while improving quality and putting less weight on the traditional ways of paying, such as fee-for-service. in the extreme you put no weight on fee-for-service and all the weight on capitated payment that's adjusted for quality and for severity of illness of the patient. for a long string but definiteldefinitely where a lot of organizations, a lot of payment reforms are aiming. now accountable care organizations as a concept we've been working on. by the way, i should play in the headers on the slide so you can see it. this is a joint, reflection and

joint work by us at engelbert at brookings and the dartmouth institute for clinical services, or for health policy and clinical practice. collaborative effort. the idea behind accountable care organizations is that we want to support providers that are organized in a way that they can manage the whole continuum of care. the whole set of care for patients. maybe not very formal organization at least having accountability, have the payments be on the result or a population of payments. not for a specific service or even a specific episode but for a population of patients. this requires the care organizations to be large enough to support comprehensive measurement of performance, and provide a critical mass for the kinds of targets support services that can benefit particular patients within this population. and there also needs to be enough organizations in these accountable care organizations to be able to plan ahead, be

able to take steps that aren't going to actually improve care and reduce cost. lots of different ways that an acl could format a lot of these are big considered an legislation right now. what should the requirements be. my own view is that it's probably best to provide some flexibility here given that there are lots of different practice settings in which these kinds of accountable care steps may occur. he might have an organization that is very integrated between primary care providers, especially providers and hospitals. on the other hand, these kind of support or better results for population of patients with a lower cost could occur at a regional level, could occur with a loose or virtual relationship or informal relationship between providers that might be spread out more geographically. maybe including a hospital, maybe not. it's important to consider that there are other elements that get brought in when you think about changing payments that focus on better outcomes and lower costs. mental health services, home health services, other elements of the overall delivery of care.

and even things that are traditional health care like community based services and wellness programs that may be the most cost-effective way for some people to get better health outcomes at a lower cost, things that are outside of traditional medical care here and only by having payments that focus on medical and support better health outcome at a lower cost. you would provide incentive. you really bring those effectively as well. the basic idea in accountable care is sharing savings from getting better outcomes and lower cost, so this is a graph that just illustrates that it is possible to project forward what cost might have been in the absence of one of these reforms. the better data we have the better statistical method, the better actuarial methods of the better we can do this. and the name for a benchmark target below what spending would have been overall, and to the extent that benchmark is met or exceeded, that provides the shared savings, the additional payments that can go back to the

providers that have taken the steps to actually get better outcomes and bringing costs down at the same time. so this slide provides a bit more detail on how accountable care can be implemented, via start with providers and payers to change the way that they are paying for care away from typically a fee-for-service approach. the accountable care providers that are working together identify who they are, and in the payer can identify who is actually getting care from those providers, who they are accountable for, the patients they are accountable for based on actual patterns of care. it doesn't require any active in roman steps. not taking benefits away from medicare beneficiaries or private plan beneficiaries. and those providers and been responsible for held accountable for the overall cost for the patient, both services they deliver and other services they receive. there's an incentive to either create a virtual or a real connection between the other providers involved in delivering care. the benchmark can be calculated

based on projections about spending, enter into a contract that divides all those potential savings, creates the opportunity for shared savings. and in the accountable care organization now has a mechanism to make ends meet while still taking steps like answering e-mails and using health i.t. effectively, using nurse practitioners, allied health are fragile, it will programs, whatever it takes with her beneficiaries to get better health outcomes and lower cost. this is part of most of the health care reform proposals that are being considered right now. again, focuses on accountability for quality and cost across diverse practice organizational and market settings. and it's designed to be compatible with other reforms, things like paying for health i.t. or paying for health care coronation, bundled payments, things that are being considered to help move in this direction of getting to what we really want, accountability and payment based on better outcomes and

lower costs. this can be done through multi-stakeholder collaboration as well. there are a number of these going on around the country. i will mention it briefly in just a second, but the idea is as patrick was saying there are some things that are better to collaborate on and other things to compete on. to the extent it's possible to get multiple stakeholders to commit to the same kind of quality, meaningful quality measures that providers believe in and therefore that patients can believe in and that payers believe that help them get better value for their spending, multistate come collaboration can help support accountable care activity. and having consistent quality measures and recording requirements can also mean more accurate performance measurements because the more patients are involved, because more copperheads a picture of the care being delivered by providers can be developed. and that also means in areas where there can be competition, so if blue cross plan and

medicare and the state are all participating in this effort, they can all implement payment reforms that would reinforce each other rather than pushing and pulling providers and lots of different directions. they each have their own different kind of quality initiatives but it all adds up to a lot of noise and confusion from the standpoint of health care provider. some of these can be reasonably based as well, and there are some good examples including from minnesota about how to make progress on these kinds of issues. we've been working with a number of these around the country, a number of these multiple stakeholder reform efforts, not by means of all of them and very important things are happening in minnesota as you already heard about in massachusetts, that doesn't mean it's not critical. but just to give you an example, north carolina, there's a program that started with kind of a medical home concept in the medicaid program that's now been extended to the state employees program, that blue cross of north caroline is participating

in, more ways to get medicare participation in the program. as well, the quality measures for these different kind of population aren't exactly the same but the goal is, to get improvements and outcomes for patients while getting reductions in overall costs of care. these are not being implemented in radical and suddenly. you are not going to suddenly be moving away from fee-for-service payment that providers have always used. they are being implemented through incremental steps like providing some up front payments for medical homes and fair core nations, but the transition intended to move payment toward paying for better results and making sure that the steps are leading to better outcomes for patients and lower overall costs of care. a number of these activities around the country. and there's a lot of discussion earlier about the importance of medicare taking steps to produce me in these efforts. while i was at cms we started a demonstration program based on this concept for primarily integrated group practices

called the physician group practice demonstration, where a number of physicians, integrated with an anti-pa participate in a deal like this with a medicare beneficiaries are they still get paid a traditional medicare fee-for-service payment, but in addition to that date started reporting on a set of meaningful quality performance measures for the patient population. the whole set of patients who were touched by their care, including a set of preventive measures, including a set of evidence -based process and specialty outcome and patient experience made for the chronic diseases that are out for most medicare cost. and i think i medicare started tracking the overall spending for patients in these programs. the deal was that they could document improvements in a number of these dimensions of important patient quality of care, and medicare saw slowed down and the growth trend while they could get back some of those savings. at this point, i think the latest results are that just about all of them have

significantly improved quality, and about half have been able to get cost spending trends down by more than two percentage point per year. so pretty significant, especially adding up over time and the saving seemed to be getting larger and more substantial as time goes on, and more steps along these lines can be implemented and reinforced by the payment system reform. key element here, getting multiple stakeholders involved. having a process, a trusted process in place that brings key payers and providers, the public sector to the table, having a capacity to measure performance, both in terms of quality and cost of care. and that's getting easy with all the investors that are coming to health i.t., and the definition of meaningful use of health i.t. is being discussed now, and put a big emphasis on getting demonstrated impact on performance measures and on quality of care. having some abilities to compare these benchmark trends to impact over time, so either having a control group or having a

benchmark prediction that can be tracked against actual performance of this accountable care collaboration, having a savings threshold above which savings shared. and then again having a quality and efficient component as well. so these kind of steps are being done now. they are being considered in legislation related to medicare that would get medicare i think the much-needed ability to get important quality and cost measures quickly for their beneficiary so that the impact of reforms like these can be evaluated much more quickly and can be potentially an important part of achieving meaningful health care reform. thank you all very much. [applause] >> thank you, mark, for sharing your perspectives. now it's my pleasure to introduce uwe reinhardt as we turn our attention from finance and cost management to

increasing access. and there is really no one better to speak about this than uwe reinhardt. he is an internationally known expert, and i'm sure known to all of you here in this room. he is well regarded for his humor, also for his keen insights and his ability, his keen insight and his ability to communicate these very important issues around access. >> thank you very much, nancy. first of all, i want to add my thanks to bob reischauer's remarks to you. these meetings take a lot of intellectual activity, is it important, someone has to frame it, and then invite the people who would present. and that's only half of it, and then someone has to figure out the logistics, get everyone on line, get the lovely room, get

c-span. and what is remarkable about this, if you had to purchase all of this from a regular consulting firm, you would be talking big, big bucks. but most of that is provided sort of free or at or below cost. so the american people should sometimes think these washington outfits that lay on these things, to help reform the policymakers but also for the media and the public. so i do believe that requires stating from time to time. i also want to express my gratitude as an american citizen to the chinese government. [laughter] >> because we are beginning this, we began the session, which bob is a great master of buzz kills. it's like getting as the fiscal situation. and ended by reminding us that we