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in our remarks from karen igagni, president of health insurance plans that represents insurance groups and that and cigna. at a speech to the detroit economic club this week to said that the congress is health care proposals would do little to help cut the rising cost of health care. her remarks are about an hour. >> organization that sits firmly at the center of the nation's health reform debate. we have 1300 members that provide americans with their mental, health, dental coverage, long-term insurance plans disability benefits. in the organization is active in all 50 states and the boy is active in washington.

the represents every large insurer, many of the small ones, bill allen of the alliance plan is iman for board members and is here today, welcome bill. we were formed in 2003 from the merger of american association of health plans and health insurance association of america. you may remember from its clinton era harry and louise commercials relevant today. an earlier in her career karen worked on capitol hill and for the afl-cio. she joined aahp in 1993 and has turned many accolades for her leadership. washington magazine named her one of three top guns of all the trade association heads in washington. in new york times wrote, in a

city teeming with health care lobbyists, karen igagni is concerned -- considered one of the most effective. and she blends a detailed knowledge of health policy with an intuitive feel for politics. fortune magazine described her association's political program as worthy of a presidential election bid. we think that's a compliment. [laughter] no wonder that modern healthcare magazine ranks karen among the most powerful people in the field. in recent years she has been before congress on matters ranging from medicare to homeland security to patient protection into the all important issues of access and affordability. she's a prophet -- prolific advocate author of more than 90 commentaries and publications ranging from the new york daily news to the new england journal of medicine.

she has been on all national network newscasts and every influential cable policy program. while health care is currently before the senate, we are fortunate that karen has broken away from the bauble to provide us with her perspective. no subject is more consuming, norm working pusan. please give karen a warm detroit economic club of welcome. [applause] >> thank you all. thank you. is just terrific to be here, it's great to get out of the bubble. i want to thank john for that very kind introduction and i also want to say something about the students who are here. i was so impressed by your thoughtful questions, your courage in asking bam, and i hope i gave you in that brief

time we had to gather some insights into how to think about policy issues but i want to encourage all of you to thinkç about carriers and public policy in washington and we need people like all of you. so thank you so very much for coming here and really working hard. it's great to see such industry, it's great to see such enthusiasm and all of you and your teachers deserve a great deal of credit and to the detroit economic club for sponsoring such a marvelous education initiative. i also would like to thank the health plan community that has come out today. so many of my friends, in number of you that i haven't been able to me personally but i know by phone. we have some of the conference calls and e-mail scum i'm sure you think that woman in the sinning in other e-mail, but it's so lovely that you all came and a mean so much and i want to say thank you. i also reflected ended a little

research and bill was very helpful in all of this as well. about the detroit economic club and what i'd like to say to all of you as i begin in, is really striking the two look back at the speakers you have and the forums that you have encouraged for 75 years. you have the detroit economic club have encouraged discussions that look beyond the conventional wisdom in the immediate horizon. i hope to contribute to such a discussion today with regard to health care reform and frankly this is why i wanted to, because of the record that the club has been giving people an opportunity to get out of that bubble as john said and to really engage in the issues and look beyond the here and now. first however i'd also like to recognize to women whom i met when we came to detroit. we were here last summer, summer 2008. nikki dobie, who is sitting there in the red, and cheryl

goolsbee. we came to detroit as part of a national outrage effort to listen to the concerns of working families and small businesses and patients who are worried about whether they could afford health care or might be denied access to eds. we met in the key in her capacity as chief of staff ofç the second ebenezer church, they hosted us for our discussion and we are very grateful for that charlene owns w.e.b. productions and employs three people. she shared with us her story is as a small-business person and we thank her for that. nikki and charlie and exemplify the millions of hard-working people here at detroit and across the nation who are struggling to provide or keep health care coverage. all of us know the stories, we know the people. listening to them and listening to the concerns that they shared in their experiences reminded us of how important health reform

is and how important it is that health reform provides peace of mind along with affordable coverage and quality of health care. our outreach campaign convinced us that the united states had arrived at a crossroads in the health reform debate. on the measure of whether we succeed now to accomplish what hasn't been accomplished for a century of false starts is whether -- not whether a bill gets passed but, in fact, of whether a generally provides that health security. and i was reminded by that, i know i'm italian and i use my hands and move my head, it's bad for microphone coverage, i get that and i will try to be more focused on the might as well as the words, but we were reminded by that this morning in the questions the students asked so i think as we think about health security what does it mean, what is the standard, where is the bar? in our view there are three issues and three objectives we have to fit.

first, without a doubur we have to bring all americans into the system. going without medical coverage is a medical and financial time, for our citizens and for our country. we have to move forward, we have to address that issue. second, we have to ensure there is affordability of coverage so that nobody is left out of the system if they change their jobs, lose their coverage, if they have a pre-existing condition or they get divorced. all of us make life changes and we need to be protected that we will and now we will have health security. lastly to ensure that the investments and expanded coverage is matched by a commitment to improve quality and reduce costs. if we accomplish these goals it will define our nation and, in fact, it will define our error. if we don't do winnie's to be done to address cost and instead settle for passing inadequate legislation, simply to attach a

health reform label to something, we will have made promises that we can't keep. deficits will increase, medicare will remain financially unstable, government subsidies will be inadequate to protect families and employers will find it more difficult to provide coverage. a year ago with these goals in mind. that we face an opportunity of generation. we had a new administration committed to the issue. we had a national consensus that the time was right, now was the time for reform. we have a leading sticklers an agreement the reform was necessary and feasible. in an economy in which the burden of health care costs reminded us every day of the urgent need for immediate action. but unless than 12 months we have gone from a perfect opportunity for a comprehensive reform to an opportunity seemingly lost on the issue of cost containment.

and to expand access without constraining costs is not sustainable in the american people have laid in on this question. in fact, the polls show that millions of americans are worried that the pending legislation doesn't do enough to bring costs under control. not that long ago as 2009 began, costs were as center stage. indeed, the congressional budget office projected that under the current system health care costs will increase by 6.2 percent each year over the next 10 years. as all of us know, that's far faster than any projection for the economic growth, the general economic growth of our country. you don't have to be an economist to understand the consequences of that. if the gap between health care cost increases in economic growth continues it will continue to exert downward pressure on workers' wages, and

more stress to already strained family budgets and business payrolls, and crowd out other important investments that our nation and urgently needs to make in energy, in jobs, infrastructure, and education. last spring the president appropriately challenged all the stakeholders to put aside their differences and make reform work. our industry responded. the men and women in this room from the health plan community were at the head of that line and we already been working for three years to come to the table when fruition. we developed a proposal to reform the insurance markets and made pre-existing conditions a thing of the past. the we also worked very hard to develop a plan that would accomplish that by putting us on a path to universal kyra to appear in our industry is also laying the groundwork to simplify and streamline health care administration and

paperwork. and i know each individual as a patient sitting. front of me will appreciate that. with the guidance of hospitals and physicians and other stakeholders we been developing operating standards that will achieve progress comparable to what the banking industry accomplished in converting to the atm technology that made it possible for us to put our atm card into any machine in the world and that cash. that's what we have done in creating the operating rules. the technological challenges in health care are complicated certainly but the advantages in accuracy and simplicity and simplification for physicians particularly will be similar. and the most import results of this effort we've undertaken it will be, in fact, to assure a physicians and hospitals that primarily clinicians' they can spend more time with patients and not worry about conflicting standards for paper work here,

unfortunately the cost-containment discussion in washington has been largely sidetracked. the bills currently before congress don't include a comprehensive it systemwide plan to bend the cost curve. in td as far as cost containment is concerned is as though almost as though the house is on higher in washington is paying a couple water to the scene. today our health care system has an unworkable and unsustainable cost structure. although the fact is widely recognized by health care experts, and the american people, it hasn't received anything close to of the kind of attention and we need to give it in washington. even worse the current legislation will actually benefit cost curve up by encouraging people to wait until they get sick to get insurance, add new taxes on health care coverage, which puts more of a burden on families and businesses, and imposing new medicare cuts that ultimately will get passed on to families

and employers with private coverage. so how did this happen? at the short answer is the issue of cost has been completely overshadowed, not just in congress but also in the media by a debate on whether health care reform should include a government-run plan. that single question became the focus of months of congressional statements, public opinion polls and sunday morning talk shows. as a result, a genuine cost debate never occurred and the government-run plan became the litmus test for reform. what followed was unpredictable. a substantive discussion about health care reform and was narrowed to ideological debates and then a focus on health plan profits and administrative costs. i want to present those stated to you today. the data, the facts show that health plans represent 44% of

total national health expenditures, according to fortune magazine are sector earned profits of 2.2% in 2008. breaking it behind all of the other large health care stakeholders. now as the seven approaches its final weeks of debate is imperative that the nation return to the important discussion about costs and the other 96 percent of expenditures. it's true that pentecost purvis has become a phrase which by now they have the aura of a cliche. but if we just do enough to satisfy the scoring requirements of cbo the congressional budget office, calling a day but not yet to enough to make health care to the affordable and sustainable for the decades ahead than most of the other reforms will prove unsustainable. in fact, the entire system will be unsustainable. the good news is it is time still to get right.

the barrier which is tall and wide is the perception that the politics of washington inevitably make it impossible to take on health care costs in a comprehensive fashion. for example, the bills before congress settled for a timid pilot programs rather than requiring a major challenges or changes. creates incentives that only applied to medicare rather than across the board and it establishes a new oversight body but severely limits the scope of review. at best the approaches miss the opportunity to focus on of the forces that drive up health care costs for the 200 million people with private coverage as well as for medicare and medicaid. at worst the pending legislation actually creates incentives for costs to accelerate. for example, health care suppliers and providers already increasing costs to compensate both for actual an anticipated cost reductions in medicare and

medicaid. we can see that in what's happening now in 2009. massachusetts proves to be a cautionary tale. on the one hand, in three years ago they introduced sweeping health care reforms and today marvelously 97% of massachusetts residents have health care coverage, that's a major step forward. it's a landmark achievement. it's a model for the nation in terms of access but expanding access is only one element of comprehensive health reform. health care costs in massachusetts are already among the highest in the nation and are continuing to climb rapidly. which puts enormous pressure on families, employers and taxpayers. this situation exists in massachusetts because while rising to the challenge on access they avoided confronting the it tough choices associated with bringingç down the rising cost of medical care. if this brings us to the basic

question, what is cost containment so hard? first, consider the mixed incentives that drive the american health care. our system rewards doing more, more tests, more madison, where specialists. whether or not it improves the result. in our system is further driven in burdened by a malpractice liability system that threatens to punish a clinician in for failing to do everything imaginable. bursas what he or she believes is the right thing. it then there are in these related factors. there's no systemic process to identify and remove ineffective or dangerous practices from our system, there is no systematic process to reward the best practices and consensus on what constitutes best practice, and then we pay 50 to 60 percent more in unit costs then every other industrialized nation from medicine, technology and professional services.

these problems are part of a culture of health care delivery that's been building up for decades. changing it will require more than just adjusting incentives, it will require setting tangible goals that we can manage and we can measure. today i wouldxd like to offer fe solutions that can promote health security, allow us to hit that mark for all americans come and help set the country on a sound economic course. first, set a national goal with respect to expectations about reducing costs and measure progress. as anyone of you who are running your business as in your operations whether public or private would do. it's imperative for congress to set a goal, to bend the health care cost curve. for example, if we reduce projected growth by 1.5 percentage points per year of it would produce an estimated

$2 trillion in systemwide savings. now, that doesn't perhaps sound like a great deal when we are thinking of looking ahead to spending 37 trillion over the next decade, but to till lohan is more than the cost, in fact, moving forward with health reform just to scoppetta for all of you and give some perspective. this would reduce future growth to instill a robust 4.7% the same goal suggested by the president's council of economic advisers during the summer. it doesn't have to be the absolute goal. what matters is having a goal that's meaningful and measurable. and having a conversation in washington and throughout the country about whether that goal should be. and when it should begin in how to measure it. the legislation pending in the senate would establish a new commission to review medicare spending. that's an important start but it won't provide a comprehensive oversight needed because it

would focus only on medicare expenditures. at the same time it would also exempt hospitals, physicians and other key services from review. that makes no sense. if we need to have a comprehensive clear objective committed to real savings and monetary and evaluate how we're doing. to achieve results. this process should look at all spending categories and shine a spotlight on areas that are not providing high value, high quality care. it would give the american people the assurance that the cost containment and quality improvements are being assessed continually and can go hand-in-hand with the access expansion. essentially congress needs to answer the question, how do we know the savings will materialize? this will require a accountability, across the entire health care system. so that families, businesses and taxpayers will know that the health care cost problem will be

brought under control. in the absence of such a clear strategy and clear objectives, health care reform is likely to be a risky bet. a bed that timid pilot programs, maverick spending commissions and that's part from examining the bulk of medicare expenditures and a tax on high-value health plans will be sufficient to to markedly constraining and contain costs over the next decade. second recommendation: build on the pilots and incentives in the senate legislation with a comprehensive plan to introduce health care delivery reforms across the entire system. if we agree that we need a comprehensive systematic process to ensure that costs are brought under control, the coverage becomes the remains affordable for all of us in the country then that means looking closely and continually add all of the areas that make our health system on affordable.

that's a tall order, to address all of these issues which involve comprehensive and looked as systemwide administrative costs, the incidence of inappropriate dangerous and unnecessary care, are relative high unit costs for drugs, devices and professional services, and are relatively low productivity measured by outcomes. inadequate attention being given to prevention, wellness, the importance of it, and how to encourage more of it, and chronic care management and trading payment systems that now do not reward in value but reward volume. we have to transition in. and to address all of these issues we are going to need a maltase stakeholder efforts -- no stakeholder can do it alone, government can do alone, now one industry can do it alone. we all have to be called upon to work together. we need to bring together doctors and hospitals along with

patience, employers and health plans and manufacturers to ask an address -- and that's the key, ask an address the hard questions. what practices yoga the best outcome. of what is best practice. how do we define and measure it and how do we operational is it? what steps will we have a hospital for emissions, web strategy is would encourage coordinated care and how can we implement these changes quickly across public and private programs. we need to jump-start a transformation of the entire delivery system with objective of shifting the focus from counting what is done and come across the seas and procedures coming to rewording the incentivizing best practices and rewarding value. this would it free clinicians from having to cope with conflicting standards and put ensure that they can focus on providing state-of-the-art care. third, reforming the legal

system to protect patients and allow doctors and hospitals to do it they want to do which is delivered as practiced medicine and. by reforming the malpractice system we can change the incentives that force providers to order tests to protect themselves from lawsuits, rather than doing what they believe is the right thing. this is one of the largest barriers to achieving that goal standard of evidence based medicine. at the same time that we need to ensure that a new system adequately protect patients and their families. there are precedents for achieving this balance and we ought to get on with the job as part of reform in a dressing this issue. fourth, and powering patients and their doctors to make the most informed healthcare decisions. the unfortunate reality which all of us know today is that patients are not a always getting the right health care treatment. in fact, according to the rand corporation, patients are

receiving the most effective medical care about 55 percent of the time. moreover researchers at dartmouth university and other parts of the country have documented that the wide variation in practices that exist. a geographic -- geography is deafening in our country and patience with the same condition did drastically different treatments depending upon where they go for care. moving to prioritize the evidence, prior to rise the research with the right incentives and information will improve the quality of care that patients receive. it to accomplish that goal our nation needs to make a significant investment in improving research on the effectiveness of drugs, devices, their peace and technologies. the current legislation makes it a very important down payment on this subject of. but we need to do more. patients and their physicians have a right to known not only what treatments work best but which treatments are

cost-effective. the entire health care system needs a major dose of transparency. too often in patients are making health care decisions in the dark without access to information about hospitals and doctors provide the best care, the cost of treatment and the effectiveness of various approaches. focusing on the transparency agenda will make the system not only more effective but allowed patients and doctors to make right decisions and help put our health care system on a more sustainable path. last, avoiding reforms that increased cost. policymakers need to avoid potential traps in the current proposals that will actually lead to increased costs and let me give a couple examples. experience in the states has shown interest market reforms while very important and we are strongly committed to them but the experience in the states shows that they need to be.

with an effective coverage requirement if they're going to work and not provide a rate shock for those currently with coverage. unfortunately the current senate proposal provides a very powerful incentive for people to wait until they get sick to purchase coverage. this will penalize current policyholders with higher cost. the current proposal also imposes technical rules that will significantly raise the cost of coverage for millions of young families in more than 40 states and increase the likelihood because of that cost increase that they may choose to stay out of the system until they are sick. the proposal also in as new taxes and fees that are raised the cost of coverage for individuals, families and employers across the country. that's the opposite of what health reform is supposed to accomplish. in conclusion, we believe these issues can and must be

addressed. the key for the nation is to make a commitment to reducing the high rate of growth in health care costs and to make a commitment to bend the cost curve. as everyone here knows, and as the detroit economic club has often discussed, our country has played a high price for avoiding tough decisions in other areas of the economy. the devastating housing and financial crises should serve as a stark lesson in. if reform fails to address the unsustainable cost drivers and health care, we may be laying the groundwork for the nation's next crisis. one that will impact every american. we can't afford that outcome, but we can instill in now change direction in and inc. cost containment. sustainable health care reform is still within reach. the nation can provide affordable coverage to all americans, but to get their all

of us with a stake in the health careç system and that's each ad every one of us need to heed the call to a higher national purpose that trump's political expediency. .. your remarks underscore the complexity of this issue, and we

can probably better understand how it is that these pieces of legislation to grow to a thousand pages, 2,000 pages. god bless you for reading every word. we have a lot of questions, some of them quite fundamental. let me begin with this one -- let me begin with this one. there's a basic hypothesis on health care reform the health care is a bright. is that ahip's you? >> we think all americans should have coverage and we are working very hard to -- all of the proposals we have advanced begins with a proposition we have to get everybody covered. >> ahip opposes the current legislative proposals. what are the ramifications if no bill is passed in the same system is in place ten, 15 years on the road? >> this is a very important

question. in our view we can't -- we can't afford as a country not to do health care reform. at the same time, we can't afford not to have those three pillars of getting everybody covered, proving the quality, and reducing the rate of growth and health care costs intertwined as objectives. our concern is while the conversation has focused on one, the conversation on three has been crowded out and one could say the conversation on to to some degree has been crowded out and we think it's important to real link the three. >> karen, is it your practical expectation that congress will reach a compromise agreement next year? >> i think there is a great deal of effort now on the part of members of congress to get closure on the legislation, move forward, and as a country we need to achieve the objective of

getting everybody covered. but at the same time, if we don't bend the cost curve we all -- all signs point to the fact the system not only will be workable but won't be sustainable. and if looking at massachusetts-based fantastic job of getting everyone in it is inappropriate cautionary tale to include the cost discussion which is the hardest part of all this in this discussion so that we can do it half in tandem. and that's an issue that concerns families and that concerns employers and the various stakeholders, and we ought to be called upon to work together to do more to advance the objectives. but i do believe that because to had been such an intense focus on the one issue, the singular question whether there should or shouldn't be a public auction this whole issue of cost containment is put aside. so although it's difficult

conversations that should have been held about how to do this and how to do this correctly got swept aside. now we need to go back to them if we are going to have a bill that can be sustained, and i think that's what the american people want. we are looking at provisions in the legislation that because of lack of cost containment they are forced to impose new taxes, new fees'. they are looking at aggressive medicare cuts. we need to focus on sustaining medicare and get costs down. we need to do more for working families than what has been able to be accomplished because of the lack of cost containment. if we contain cost we can do more for working families in terms of subsidies to ensure they will be able to afford the system so that is how it all works together i believe. >> there are folks who believe the public option is a central component to cost containment. what's your view on that? >> i think if you ask any hospital or physician in the

audience and you ask them the question can you live on medicare rates, which is the proposal that was advanced early in the year and then was medicare rates plus ten, generally people in the provider community quite appropriately will say absolutely no. the only reason we can maintain our service in medicare now and the numbers of physicians participating in medicare beginning to go down, and the only reason we can maintain or service and medicaid and a number of physicians are no longer taking medicaid patients is because we shift the underfunding burden to the private sector. so unless we stop passing this hot potato, we are never going to be able to get the system under control. so employers are focused on this issue of cost shifting. there's two kinds of cost shifting if you allow me for a moment. because you talked about, john, fundamentals. when we talk about cost

shifting, number one what is uncompensated care, people going to the emergency room because they don't have coverage and getting covered, the cost gets spread across the system for everyone who has coverage we pay for that. that goes away if we get everybody in. that problem is largely solved. for some hospitals that are disproportionate share hospitals who rely on almost exclusively public programs there's still additional burdens we have to be attentive to. the cost shifting i'm talking about is the current underfunding of medicare and medicaid which from the perspective how much a family is paying, that specific item is even larger in terms of the burdens on families and uncompensated care burdens we pay an additional $1,000 for uncompensated care, 1500 for the underfunding of medicare and medicaid. if we build another program on an underfunded budget is in the question is how much will be

left in the private sector to pick up the slack or will there be additional liabilities added to the federal budget, it will go on one of either pleases. so again it is a question of how we stop passing the hot potato and do what needs to be done in terms of bringing that cost curve down. >> karen, one of our high school students has asked this question. in my research i have discovered that you are the voice of insurance companies, the public perception of insurance companies not that high. how can you persuade the public to believe that your choice for the country's health care is the best choice and what steps are you taking to gain the public trust? >> first of all it was a lovely young woman who asked me this question. i won't embarrass her by asking her to stand or raise her hand, but i was struck by both the frankness of the question and her ability to get right to the heart of the matter and for our

health plan colleagues i am going to answer this in the same spirit of frankness and candor that she asked the question. we need to do more. we need, in our proposals for guarantee issue getting everybody in, taking preexisting conditions out of the system so no one has to worry and people have peace of mind, not reading the to health status, we recognize we have the high bar. we've also been frank and have done our homework about how have states feared who have tried to accomplish these objectives by maintaining a voluntary system and not getting everyone and. and what we found across the country is if you don't get everybody in, than those systems, those promises are very hard to keep because it means people in the system in a voluntary system will pay more. so that is why we have come to the public with a proposal that is very aggressive. we didn't wait for anyone else to tell us to do it. we hear the american people, we

heard them here in detroit and heard them throughout the country back in the summer of 2008 and they asked what are you going to do. we are prepared to not only canada but guarantee and be subject to federal rules and regulations that will be implemented at the state level that people can expect the system will work. they can get in, they'll build fallout. it will be fair and equitable. we want transparent rules. we are prepared to meet them and we want to be very clear that we intend to be open to public scrutiny to make sure that happens. so we understand the high bar. we need to hear from colleagues here and across the country speaking for themselves about what we stand for and why we agree with the american people that we have to get everybody in

and nobody falls out and the need peace of mind and assurance. that's why answer the question. we need to talk more about our values, about our value proposition about what people can count on and that we are not sending an message to the american people trust us, we intend to be subject to rules that will be transparent so people can count on the fact that they will be adhered to. >> karen, use said the stakeholders in this debate need to reach beyond their special-interest and reach for national purpose. and i wonder what compromises might be generated from ahip in order to reach that goal. >> several. first, again i think it was a very important contribution that we offered at more than a year ago now actually in shoring up

the concept of reform. we indicated to the public very, very actively that we intended to be for this. in addition, as i hope people blame from my remarks, we've been working for more than three years on a massive administrative simplification initiative. we understand that health plans can collaborate together to work on back-office functions so that physicians and hospitals don't have to deal with different eligibility standards, different requirements for checking on a plane and without getting too technical, to make sure this whole process is a simplified and organized. now, we didn't come into the system thinking that we were going to talk about a voluntary effort. and doing all of that background work, which has now taken more than five years because the technology had to be there and work had to be done at a robust level to make sure we were hitting the mark for doctors and

hospitals we didn't come into this discussion with the idea that we would propose a voluntary effort. we are supporting a legislative requirement that this get done so we are committed to it. we intend -- we have been supporting it. we intend to comply and are excited. in addition we have another series of projects going where we have now started and we are moving on a state-by-state basis checking and making sure we are testing the technology about six, seven weeks ago and ohio we introduced a portal for physicians essentially one pipe through which all the physicians can communicate with all the health plans in the state and no longer have all of these individuals individual office of folks doing claims payment for physicians. and it's been very enthusiastically received by the medical society. we are partnering with them and

a number of specialty societies. we will be introducing this concept, testing a different technology in new jersey beginning in a very short period of time and then we will be moving around the country. we want to make sure we have the technology right. we are doing a number of things in health care disparities and a number of things in the area of quality improvement so we intend not only to be held to those objectives. we intend to meet those objectives and you will be hearing more from us on additional things we will be doing. and i think the opportunity now weighs four the entire stakeholder community to talk about how each of us can play our part in getting health care costs under control. but it is as you imply in your question is a tall order because folks are not normally called to work together but we need to work together to spend dramatic progress in the area of working together on quality improvement measurement, which we are making

great strides across the street culture community working together. so capturing that idea and bringing it systemwide just to to the areas of wide variation and practice power and getting the special societies that consumers, employers, health plans, hospitals, the government, manufacturers together to say how do we address this issue of health care variation and what are the most appropriate things to do. i am not talking about a cookbook medicine or anything. i don't want anybody leading to those conclusions but what is best practice and how can we encourage it and how can we encourage you to get there. that's the opportunity. you can only do that however not sector by sector but in a multi stickler process. that is another example. >> a number of the stakeholders have reached agreement with the obama administration and made some kind of endorsement of course.

you've been a side of that. or their discussions that involve ahip that would involve an endorsement and do you feel like there is constructive path to follow? >> here is what we have done so far. culbert community -- no obstacle for community has volunteered the pledged to support such dramatic change and which market or operations work. we came to the floor and supported insurance market reform number one to read and we still support that. we made a very clear. i talked about administrative simplification. we support that. and we are committed to it. we support the concept of medicare advantage, which is the private part of the medicare program playing a role in health care reform. but not at the same -- lot at the level we are seeing in the bill where we know it would make it impossible for seniors who are relying on this program in the future to have it available

to them. so we are looking at now in the health reform arena we are looking at administrative changes simplifications which we support. we are looking at insurance market reform, which we support. we are looking at significant medicare advantage cuts. we support the concept of making the contribution and making sure that we are contributing to the sustainability of medicare. but michigan is a great place to have this conversation on medicare advantage. back in the 1997 period there were changes made in medicare reimbursements for medicare advantage that virtually ensured there would be no access to medicare advantage here in michigan. in 2000 a bipartisan group of members stepped up and put more resources back into the program. and indeed, the floor in michigan is higher than it is in

100%. substantially higher because it is a relatively low medicare payment rate. so when you hear stories and discussions about medicare payments, medicare advantage payments being at a fairly high level, michigan is one of those states because of the legislation that resources were put back to recognize the underfunding that occurs in medicare. and michigan is one of the states that stands to lose medicare as and hedge participation because of the draconian nature of the cutbacks that are proposed both in the house and the senate. so we offered in terms of offering a very aggressive path but sustainable path to make sure we were taking responsibility to participate in the cost containment discussions but not so much that would take choices a week. so i'm glad you asked that

question. in addition we are looking at $67 billion in tax increases over 18 year period. that amounts to 6.7 billion per year starting next year. every health plan here in this audience will tell you that people have already had their policies for 2010. it would either involve opening up of policies or it would involve a double taxation for ten and 11. and let me scale this for you. in 2010 the obligation of the senate bill is 6.7 per year. the total profits according to "fortune magazine" or 8.2. you can't have 6.7 compared to 8.2 and have any rational the associated. so yes, we need to contribute and pay our fair share. there's also an additional $25 billion that is added over ten years so it mixed 67 plus 25 is 92. and then we have tax on

high-cost health plans for the and employers that have been fortunate enough to promise benefits that are comprehensive. so all of those bring the numbers will over the 200 billion-dollar arena and we are 4% of health care expenditures. so the scale is wrong. we are ready to contribute. we have been contributing, but looking at all of those, the confluence of factors plus the fact that the legislation now has incentives for people young and healthy to stay out of the system, and that will mean massive cost increases for people who have coverage. we are very concerned about what we are looking at now. do i think that there are strategies to address each and every one of these problems? yes i do. >> the last question comb ingalls to extremely complicated public policies. do you see that there is a place for a proper place for abortion

and the health reform debate? >> i think this is one of the most contentious political issues that we have. and i think that members of commerce have to decide how they are going to handle that. we thought that in washington the issue was settled when the aid amendment was decided a number of years ago and there are many people now talking about similar kinds of approaches. i think that our job as a health plan community is not to make those political decisions or answer those questions. and what weo