>> or finding a way so native americans can participate in some of the same facilities and practitioners that the rest of the american population can. >> the only adage that politics will kill good policy is something we all have to be aware of. and avoid. the fact is, from my perspective, i commend the president because i think this is something that had to be done for the last 25 or 30 years. i mean, you cannot have this country spend 16% of its gross domestic product on healthcare

and then the baby boom generation comes and it's 25 to 30. it's not sustainable. he addressed the problem. the senate bill, if that's all that happens, is a quantum leap forward for this country in the healthcare debate. i think it's a good idea. now, is it everything that i think that i would like to see in it? no. do i think it's the answer to all the problems? no. after this passes, i think we will finally acknowledge the role healthcare plays in this country both economically, socially and morally. for the citizens of this state. and i think that's what it's about. >> can i ask the other three of you that same question, have a lightning round here. if you were a house member standing on the floor of the house this friday or saturday and you've got your choice to vote up on the senate bill or down on the senate bill, how do you vote? [laughter] >> well, i won't be there. [applause]

>> i think, as i said earlier, we got to find some common ground. and there is common ground. that the governors association meeting a few weeks ago, after we had a good discussion for an hour or so, governor granholm listed off, what, eight or 10 issues on just about what everybody agreed. so i think there is that opportunity and until and unless we get to the point where we can embrace it, i'm not sure it's the right step. and i guess i'm not sure whether it's going to contain the costs as much as we need to in order to make our economy viable for the future. [inaudible] >> i don't think be i'd be for it. >> i'd be for it it. ted is right. you have to move this ball forward. right, wrong, or indifference. i've never got a perfect bill. i never got a bill exactly the way i wanted it.

we don't come back every year to work on the legislative process because usually we want to make something better. either we improve on it and we made a mistake and we have to improve on it. you need to praise this president and this administration for sticking with it. we could have easily -- and he could have easily fold his hand. listen, american people, i've given it the best shot i've possibly can. i've expended more political capital on this one issue than any president or any group of presidents. and i'm willing to continue to expend everything i've got to move the ball forward. for that you've got to give them credit and let's try to make this -- bring us all in and make this work and maybe we can convince jim to help us. [laughter] [applause] >> okay. we have one more. >> you and i could write it. >> i would join joe in saying i commend the president for sticking with a project but that

doesn't mean they earn my vote and let me share why. what we've done is we've put together a plan here in which they have given us short time relief at the state level. they've increased the number of individuals who will be on the medicaid which long term shifts the costs onto to everybody else. and it is a hidden cost which is not being identified. so from my perspective, i would say -- i'd give him an a for effort but i disagree that the concepts that are found within this bill will be sustainable long term and i do not find the cost limiting or the reductions in costs, the economizing in the bill that it should have. and so from my perspective, i would say, no, because long term we can't affordle bill. -- afford the bill. >> i think we've now identified who's democrat and who's republican. [laughter] >> i'd say you guys looks like the house of representatives. you brought up native americans.

there's another enormous population here that's going to be entirely left out of this bill, which is illegal immigrants. what's going to happen with them? they're going to keep showing up at the emergency rooms presumably? >> oh, i think that raises another question, karen. we need immigration reform. we've got a challenge in our state, every state does, and i honestly believe a couple of years ago when pat leahy and george bush had exactly the same proposal on the table that we'd get it through but we didn't. i think there has to be a recognition of respect for our laws. but also an opportunity for these folks who were parts of our community to have a path to legal immigration. so the congress really needs to confront that and solve that as well. >> like you say, our states at least the first state in the nation so we have not seen a big influx that other states have seen.

but janet napolitano was one of our colleagues and now she's at homeland security and has leading this fight for a long time. a lot of the border states have been leading it. and out west i know they have more of a concern. and we just need to work -- get a policy that this country can adopt. >> look, they're here because they're looking for work. and they're taking jobs in many cases that americans -- people born here in this country simply are not interested in. there's a reason that they're coming here and that's because they think they have an opportunity to go to work and they send money back to families. that will be here until such time as we have a plan, a national plan, that recognizes that those individuals will try to get in here into the country. in terms of the healthcare, it's very true. our healthcare facilities will always respond to somebody who is in need. does it mean that the county picks it up as indigent care? does it mean at some stages the federal government steps in once again we're going to take care

of them because they are not from this country. today it get passed on to everybody else. >> you know, i come at this a little different. i always look -- i see a child and i say if the child needs healthcare, are you telling me that as a people that we're going to tell them, well, if you can't prove your citizenship, you don't get healthcare? we're not going to treat you. we're not going to do that. i don't think anybody would want to do that. and i think the same thing with their parents. it is an immigration reform issue. but i don't think that these two should be joined together the way they have been because i think it's pitting us one against the other. and the fact that they're here, we're going to have to treat them and i just can't imagine in oregon that if a child comes to the emergency unit, somebody says no to them. we're going to do it and that's it. >> but that's the problem, though. that they're showing up at the emergency room. do you see the political will in any of your states to -- or is

there even the flexibility in this bill to do something besides sit there at the emergency room? >> well, the free collins. >> most of us have free collins in our states and things of this sort that we support and we use federal dollars to support as well. we should encourage that but again it comes back to the legality of, you know, they know they won't turn them away in an emergency room but a clinic could and each of our policies could be adopted accordingly. >> speaking of clinics, how do you see -- how do you see that working out and how do you see your state? >> it's working very well. and we have this federal qualified health centers in many parts of our state. we're increasing the number and they provide that safety net for

folks who don't have coverage or who can't be seen under other circumstances. so it seems to work for us. >> you have three states here who have less than 2 million people. sort of he's over the 2 million mark so you're basically looking at four states that are pretty rural and this is a primary delivery for us, most of us in our rural areas is how do we deliver healthcare. >> you know, one of the things that oregon is looking at is what we refer to as integrated health centers. and joe talked about preventive care but what it really is it's integrating mental and physical health. it's integrating all the issues around. every aspect of healthcare that you can have so that we can direct people to them and put providers into those situations which would provide this broad system of healthcare, which i

think is actually what clinics and they try to treat them all. i think what you have to recognize is you have to intergrate physical and mental health if you're ever going to be successful in providing a healthcare system for this country and that's what we're trying to do. >> dental care has been a big thing in all of us, you know. if you look at the delivery of medicaid for adults, they don't get dental care unless it's pain and suffering. you have to really justify that. so we tried to expand on that, too, because that's all part of the wellness and preventive care. and that's an expensive part of it but it's such a needed part and our clinics are a place where we can disperse that. >> there was a survey, i is a you a couple years ago that asked lower income americans what their greatest health concern was and it was oral health because it's not only a matter of potentially pain but

self-esteem, employablity and so it's also an important part of the well-being of our constituents. >> we did have a problem with dentist who are participating in our medicaid program. in part because as they say they can take so many but then after that they've got to be able to fill in the rest of their schedule with people that pay the full or a closer percentage to the full rate. and we discovered that simply by increasing the rates that we would reimburse for dental services we had a larger number of dentist. as a matter of fact, most of the dentist in south dakota participate to some extent one way or the other in serving the medicaid population. once again it was underpricing the product that was being delivered in terms of the medicaid cost. >> well, we just have a few minutes. so i just wanted to ask each of you sort of really quickly, what if this bill doesn't pass?

what's the first -- the first thing on your to-do list? >> well, that's why we're having this summit right now. we didn't know whether we would have a bill passed or likely to pass or not passing at all. but states, as we've suggested are the laboratories of democracy. that's where innovative ideas begin. where reform efforts are initiated to improve the lives of people we serve. and the goal of nga that we share those experiences and share those ideas and continue to reform the way we deliver care as we already are in many states across the country. so if there's no federal bill passed, my commitment to proving the health outcomes for the people in vermont will be just as strong as it was before this debate began. and i'm going to keep doing everything i can to do it within the resources that we have available. >> i believe exactly what jim has said. it's our responsibility to reach

out and the compassion that we have and keeping our population base healthy. i have the four women with me today who's responsible on delivering healthcare in virginia. and you noticed, gentlemen, women. the women i believe truly take a compassionate role. i really believe this. they don't look at just the bottom line and the dollars and cents but basically how do they keep their children, nieces and nephews. and i think if you listen to them and you say, now, okay, we have to do it in a responsible manner, how do we keep them engaged? we've got to move forward. and we really -- as states we can't sit back and wait for the federal government. i don't want the federal government to be my provider. i want them to be my partner. and i tell all my counties in my state, i don't intend to be your provider but i'll be the best partner but you got to meet me halfway. as the nga it's what we always said. we want to be a partner with the federal government. and we think, you know, we're on that front line and whatever you

pass, we've got to -- we have to implement. we can't wait 5 or 10 years for a smoothing and see if we're able to afford it or not. we're going to tell you by next june 30th if we can afford it. the end of the fiscal year. we're planning and we'll be planning what we learn today and the engagement we have in all these and i want to thank personally every one of you all for coming and bringing your expertise. i know our delegation is looking forward to interacting with you and learning how we can do better in my state of west virginia. but also make this country stronger but so we're prepared to move forward. >> there are 49 states representative here. there are 49 different idea of groups here that have put together their plans and have tried different theories about how to reduce the costs or thousand provide more coverage for less money. unique and individual ways of making an improvement in the healthcare delivery system on a state-by-state basis.

we come into a place like this and it's an opportunity to learn. find out which waivers have been granted and how they've worked, what modifications to the existing medicaid programs are available right now that we're not utilizing within our state. finding out which new approaches in terms of using the national association of insurance commissioners model legislation and who's modified it, who's changed it. who's taken different approaches and allowing for a more competitive individualized market? the risk pools that are out there, we just -- we just -- we just increased the limit of liability on our risk pool for uninsurable individuals from 1 million to $2 million and we actually used the same guidelines that we used for our state employees plan. we used the same managers for both. those types of things -- we're going to find out from other states that are here which ones work and which ones don't? you know, the vast majority of americans have a plan for healthcare. it's not perfect. it's a matter now of how do we

make it better? where can we improve and make it sustainable for the long term? the real challenge in the future, as you have more and more of us getting odor and living longer and yet at the same time you have younger people that we truly -- we recognize that you've got to build a quality education. the challenge will be are states going to be spending their money on educating their children? are they going to be spending it on taking care of people who have no place left to go for their healthcare needs? >> you know, some form of healthcare doesn't pass, it will be a lost opportunity for us as a country the fact is for oregon nothing will change what i've told you that we're talking about the oregon health authority. i actually believe oregon has a very aggressive program and we have had as i said for over 20 years for healthcare. i think this is probably

somewhat inconsistent because in my calculations of the benefit to us of the senate version it's about $5 billion over the next 10 years, from 2010 to 2020 that oregon would receive. now, would i like that? you better believe i would. and i think a lot of us would like that aspect that of healthcare reform. personally, i believe that there is enough money in our healthcare system that we could provide healthcare a quality healthcare program for all of our citizens. it's a distribution issue, an allocation of how we do it. and i think that's what oregon is moving forward on is trying to find that mix of where, in fact, we could take the dollars we have and fill it up with the past and provide other quality healthcare for other citizens of oregon >> i think what ted is saying -- everyone keeps thinking every time you talk it's more money, more money. i've come to where some my state money won't help the problem.

it will help cure it once you have the plan to help fix it and that's what we're looking for is that plan that really fixes the problem that we have, that we've identified without throwing more money into it. and i think that's the push-back from the american people. who's enough enough? how much more do you want out of my hide? can't you work with what you've got? i've got to live with what i've got. and i'm even making due with less. can't you do the same? that might be the push-back that you're seeing if anything. and they're saying if we're spending more money than anyone in the world and we're ranked 37th in wellness, don't you think you've done something wrong? >> and the broader context is 12, 13, $14 trillion of debt that we're passing on to the next generation. and how much more can we -- can we spend and borrow? will this really contain costs as i think has to be a major objective of reform? i think that's weighing on a lot of americans as well.

>> well, i think we're coming to the end of our time here. but i want to thank all of you. this has been extraordinarily enlightening for me certainly. and also to wish you luck. you got your work cut out for you. thank you very much. >> thank you very, very much. [applause] >> our coverage of the national governors association healthcare summit continues with remarks from health department directors in several states. this portion is about an hour and a half. >> and, no, it's not a typo, there is no break on your agenda. [laughter] >> we're tough. >> that's right. >> we're tough. well, if anyone needs a health break, i'm sure you'll take it. but we'll keep moving right along. a lot of territory to cover over the next couple days. and we want to keep it going. i want to thank matt and andrea for their update.

it sounds like the crystal balls in washington remain a little cloudy for the time being. but we're going to take a look now at what states will face on an implementation basis if federal reform does pass and the title of this panel is "nag reforms with or without federal legislation." as we discussed over the last couple of hours, states will be responsible for significant strategic planning, for changes for structure and programmic expansions so we want to take at this session at the current state environment and now and how that shapes the pathway forward in both state and federal reforms. our panelists have extensive experience with state-level reforms. and they've been very successful in deciding where to sit. [laughter] [inaudible] >> that's good. that's good. i'm not sure where i'm going to sit but that's another matter.

[laughter] >> but they've begun to think about how issues will be confronted in implementing federal reforms. i'm going to be comoderating this with my colleague from south dakota, governor rounds. and we have a new nga policy on egalitarian approaches to panels. you'll see there are no biographical sketches in the booklet because we're all experiments here and we're working hard to implement healthcare reform in our states and so we've dispensed with all of the detailed introductions. but we're honored to have the executive director of the national governors association, and the secretary of the california of human services agency and the executive director of the colorado healthcare policy and financing agency and the director of the

maine. that's maine with an e. we're glad you're here and we might start, mike to have our panelists offer some thoughts on implementation of healthcare reform. and we can -- who would like to go first? ray? >> sure. well, i think one of the things we found out when we helped states on implementing the recovery package is that you have very, very little money. and second of all, actually the state capacity, just the number of senior people and people with expertise is actually down quite a bit basically because of budget cuts and so on over the last two or three years. so that's going to be a major problem going forward. we found it in the recovery package, for example, although they provided a lot more money

for auditors at the federal level. we found that the normal auditors at the state level had contracted quite a bit. i would also argue that one of the big things is that there's probably four or five agencies here that are going to have to publish rules and regulations that may take five months, six months, seven months. and we've together play a pretty major role in that to, as governor manchin said, to try to maintain the flexibility there is in the current law. >> i'll weigh in. first off, i think many of the people in this room are really excited and enthusiastic, if not panicked. [laughter] >> about both the opportunity to move forward on reforms that many of us have dedicated the better part of our careers to advancing.

and at the same time doing so in an environment that is incredibly challenges. -- challenging. i thought our governor colleagues, our bosses this morning, were far more decorous and understated than i certainly am feeling as an agency secretary. just speaking for myself, i'm experiencing just tremendous cogniti cognitive feeling that we're feeling deep cuts in medicaid or we call it medi-cal in california. that we have significant expansion of this program. my boss believes medicaid is an appropriate and foundation upon which to build. but we -- as we move forward with planning, we have to take into account today, not what's going to happen in 2014 but how do we support and sustain this program so that it can be a responsible foundation upon which to build.

so i'm just extremely concerned that this program is very fragile if not unraveling and yet we're looking to build upon it and it underscores the importance of there being continued, i think, not just a six-month extension of our type of assistance but really broader bridge support to help states transition responsibly to 2014. the other area where i'm feeling some cognitive feeling is this disconnect of the requirements that states are going to be assuming for implementation of reform and the reality of our technical administrative and fiscal capacity to implement that ray just touched on. again, i think we're understating it. we have 37 governors who are up for re-election this year. think about that. 37 governors. and my guess is a lot of folks in this room will not be sitting in this room a year from now. and so we have -- some may be pleased by that. some may be getting a little misty. [laughter]

>> but we all in this room have a responsibility to, number one, lay a responsible foundation for planning. and number two, to be mindful of the importance of work force development and secession planning. and my final note nga has played a very important role. our healthcare foundation partners will play -- have and will continue to play a very important role but we as states need to be of one voice in terms of underscoring the importance of the federal government stepping up and being a very full partner with the states in providing the resources to ensure that we will be able to responsibly undertake the implementation that is poised to be asked of us. and i'm concerned that implementation is much an after-thought as -- is more of an after-thought than something that's been integrated to the policy development. and that's what keeps me awake at night. >> let me follow the nation state of california. from maine, obviously, it's a very different situation. >> we refer to it as the boutique state of the northeast.

[laughter] >> however -- >> actually, i don't. richard one of my colleagues from the governors does. >> let me talk to the luck of the irish let me bring a little irish optimism here. we passed healthcare reform in 2003, a very comprehensive health reform bill building on medicaid like you and like all the rest of the states we too are struggling with the sort of cognitive feeling of cutting the program and cutting our initiatives and it has been successful in those initiatives. as difficult as passing it was as we see in washington, it's easy compared to washington. i think the processes to implement the energy and the staff -- kim's points are absolutely correct. and i would encourage the federal government to work more collaboratively with the states because much of this bill is the architecture. there's not a great deal of detail. so the regulatory -- and the

states, therefore, will be at some disadvantaged to move quickly until there's more guidance from the federal government. and that process of how the federal government implements this in partnerships with the state is really quite critical because we can't wait for the long regulatory process to unfold, surprise us, comment, the usual process, i think, won't work here. >> i think you're absolutely right. in addition to the list that andrea laid out about the types of staff we need to be looking for, the talent we need to bring, probably every single state agency that will be touched with some responsibility for implementation in our state it's half of them. half of them will have one role or another. we need to start thinking about responding and helping to draft rules and regulations. i mean, the law is just the first step. it's the framework as you said. the real rubber meets the road is how the rules and regs are written and we want to be very engaged.

we did this with schip. when the chip program was passed, the states were right at the table with the federal government at the beginning writing the rules, writing the guidelines, writing the expectations and we need to be strong partners in that as well. you know, we obviously support this mark foley colorado we're not one of the leader states in reform like vermont and massachusetts and oregon. but i would consider us to be the next generation. so we pass the healthcare affordibility act last year. it took us is year just to plan for the bill. it will be really a four-year implementation and that's just to cover 100,000 more people in our states. so if you think about the implications of the next phase and in the larger states, it's huge. the amount of work we have to do. we had briefed the governor during the holidays in anticipation of this kind of conversation.

and we joked that we actually need like an ubercoordinator, an uberproject manager who can coordinate all these efforts across state agencies because in the end, it isn't just about coverage. it's can we build a better healthcare service delivery system in our states? can we actually see improvements in health status and outcomes 5 and 10 years from now? and we can't do that if each state agency just does their little part and it's not woven together. >> that's a great idea of transitions. what are states doing structurally setting up special positions or agencies or cabinet teams or -- what's the structural approach to implementation? >> for us it's theoretical. i mean, these are conversations we've begun to have.

do you have a central overall project manager that lives in the governor's policy office? do you assign one state agency? to take the lead but then bring, you know, this cabinet idea together? but, you know, frankly, we were ready to move ahead with this around the holidays and then we pulled back and said we can't do a whole lot more until we know exactly what we're going to be handed from washington. >> yeah, we had a similar experience. we assembled the leadership team in the administration. we spent quite a bit of time last year in terms of the policy analysis, the fiscal analysis. digging more deeply into program elements, a number of which that are very similar to what california spent a year plus endeavoring to do in 2007. but come january we hit the pause button and felt it was an appropriate -- a more appropriate investment of our scarce planning resources to be targeting near term priorities

both on the budget side as well as we have a significant medicaid waiver renewal effort underway. i think it's a fair question for -- people in positions like ours in terms of what is the proper balance of interest? how much time should we be dedicating and scarce resources to planning for something that we have yet to see. we need the law. we've noted the regulations as well. and then we got a lot of work to do in terms of figuring out how to organize and structure ourselves to really delve more deeply into the specifics of the legislation and how a states going to move forward. in terms of secession planning, i am really worried about it. i'm worried in terms of the senior leadership. the majority of us will be moving on and moving to other things. in terms of the people who do the real work, i'm sure some of the people who are -- >> did you catch that, jim? [laughter] >> no. >> she's right. >> i have a very healthy regard

for what i do and the people like tony douglas our medicare director and his team and what they do. and one of the observations i make is that our state medicaid department has been doing a really good job surveying as a career or as a capacity development field team for the consulting firms that are hiring. and we are seeing a huge exodus of some of our super smarty pants folks who are critical to implementing our work on a day-to-day basis much less undertaking the reform of the magnitude and complexity contemplated. so i think states and governors have some very hard questions to ask in terms of hiring, recruitment, retention, salary, being competitive with the private sector and doing so at a time when we're also talking to our governors about how to fund hundreds of thousands of more dollars and cuts to medicaid programs and that's where the federal government has a very important role along with the states, of course, and also our foundation partners. >> main structure again

fortunately we passed reforms that we have a structure that may be informative to other states. my office the governor's office of health policy and finance is charged as one of its tasks to ensure consistency in policy, health policy across state agencies. we meet biweekly with the cabinet offices and the bureau of insurance to make sure we stay on the same page and deal with issues collaboratively. good structure seems to work efficiently. we also created an advisory council that's responsible for state planning and payment reform. that group, which represents 20 of the key stakeholders including five bipartisan legislators will take on the responsibility of planning for health reform in a very public process that will be well attended by all the stakeholders across the state. we've created a separate state agency that is an exchange like function that now operates the healthcare tax credit for the displaced workers federally as well as our own subsidy program. and i think all of those infrastructures will make sense and make it significantly easier

for us to take on this task though i would point out we in the executive branch need to be very thoughtful and mindful about the legislative branch is concerned here as well in the legislature has created some of its own task force and where will their policy delineation must be legislator and how do the two bodies work collaboratively and carefully particularly at a time where they will be transitioning to new leadership. >> one thing if i could just jump in for a second. our state, south dakota, is 800,000 people. 1.1 billion in general funds. that's our whole budget. but this year we had an increase in our general fund proposal that i offered of about $51 million. $52 million is what i needed to take care of medicaid so my actual budget for everything

else was less. medicaid took 100% plus of what my increase was this year. and yet at the same time, what we're talking about and what you're suggesting is the need right now to literally upscale and to find a way to bring in expertise without any administrative assistance as near as i can tell to implement what might be perhaps the largest single change in terms of what our nation has seen that we're supposed to implementing. i'm going to ask ray to respond to this because it's true -- well, both jim and i are both part of that group that's leaving and there's a lot of other governors that won't be here next year that are here this year. there's got to be of a central place to go to look and to find out how we're going to be dealing with what is right now a framework for regulatory as well as fiscal changes that the states are going to have to deal with? is the nga right now -- is there

a planning process in place in terms of something like this that's going to sit down and say, this is what this really means? this is the way it's got to go? what do you think? >> i would like to make a couple of comments. first, states need to have a czar. i hate to say this. but you need one person at the top plus, i think, you need people for each of the buckets. somebody from medicaid. somebody for exchanges. somebody for insurance reform. and then you may need other people to help with the coordination and so on. but if it's like the recovery act, what we found was every couple months we were bringing those people back in to washington for two full days where we pulled in every single agency that you were dealing with to go over the rules and regulations and so on. so sometimes we would be pulling in medicaid directors. other times it's the people who oversee the entire thing. so we plan and we've had some positive conversations with hhs

of playing that role really of being the coordinating of the group. but it is -- it is a huge effort in the timeline, given the resource restraints. i also might indicate that i heard larry sabato, he's the governor's person, it's the 30 new governors the most since 2000. now, i don't know who are those six that will lose now and then. i won't go there. but that's huge. on top of the fiscal problems. >> well, the other thing i think that can help as kim mentioned there are many other organizations in this town that are focused on helping states. and that's the good news. the bad news is when those organizations compete with one another and, you know, eight

times a day you get a request for surveys or data and they're coming into your state for work and you don't want them to come in to your state or you just had a different organization in your state helping you do work. so it's my understanding that many of those organizations have been in conversation with nga and with one another about having a coordinated effort at least staying in close contact with one another to coordinate their technical assistance and resources to states with the national foundations because i think that's just essential that we spread the wealth here. the foundations resources are more limited today than they were five or six years ago. so we need to make sure we're using their talent and their technical assistance in a really smart way instead of, you know, one state getting tons of help and ten states getting none. >> i think that is so, so right on, joan.

we are fortunate to have really impressive national organizations, nonprofit philanthropic, et cetera, that care deeply about success and have and we believe will continue to invest in supporting state implementation efforts. we have state-specific organizations. in california we have a number of health foupgss. -- foundations and we're foundation our leadership has stepped up in so many ways. i worry, though, that if we're looking to philanthropy to assume what i would submit is really more of a public role instead of an independent sector role then we are destined to be unsuccessful. the magnitude of what states are being asked to do, the resources required to do it responsibly and effectively i think really surpass what we can expect from our foundation partners as valuable as they are. so this is part of my mantra is we have great opportunities to continue to be pressing with our federal colleagues the need for resources as well as tradition. joan had been saying the need

for us to be at the table as part of regulatory implementation development. >> we made the pitch to folks here in washington that based on our experience there ought to be some implementation support of this proposal. because it's a bigger job than we probably anticipate but at least we have the opportunity to think about it in advance and hope they'll be accommodating. and you're right, kim it's at several levels. it's working with the congress now but also the regulatory process at hhs or wherever it might be down the road. we've got a lot of things to think about. do you expect that states will definitely like a strategic plan for implementation? we got a timeline that's in our packets that nga has provided just to give a sense of when things are happening but does it make sense to have a detailed plan for each step along the way and then deploy the resources necessary to get there?

>> well, i think we'll be in big trouble if we don't. but not to sound too whiny here, but it takes people and resources and talent to even do a strategic plan. so that's not something that, you know, i can just spend some saturday doing and whip it out and send it to everybody via email. >> oh, come on, joan. we're counting on you. >> at least in my state and i'm sure in every state, there will be a very strong expectation on the part of stakeholders and legislators and providers and everyone else who has to be at the table to help us with this, that they will be part of that strategic plan. and they will be weighing in and helping us with that plan. so that's what keeps me up at night thinking oh, my gosh, where am i even going to find the resources to get started? and not that we won't get lots of volunteers and help from philanthropy, but that in and of itself takes a skill set and time and resources.

>> but the extraordinary opportunity here is what we have to keep focused on. it's the transition that will be tough? how will we maintain the current program as we move to something new is truly challenging. at the same time, we'll have new opportunities that we want to take advantage of, it high risk pools for those states that unlike maine that has guaranteed issue some of the new funding. governor douglas, about patients in medical homes with 90% federal match in 2010 for the chronically ill. and in this new era of dual eligible innovation, we have the opportunity to make extraordinary changes very quickly. and bring efficiencies to the system very quickly if we get bogged down too much in planning it's got to be facile and less about what's on paper and more about who's at the table moving an agenda forward because i think it will be characterized by very rapid change. >> if i was stepping in right now and i had my group from my

department of social services engaged in this and something has happened and we're going to respond to federal legislation and i said, now, how are you going to keep track of the changes and literally the pragmatic side of dollars in and dollars out, matches in, matches out and so forth, and who's eligible and not eligible during a transition period of time, we just spent $90 million on a new computer system here for social services just in terms of taking care of medicaid services and so forth. do we have systems in place right now that we can plan or that we can use existing software to do a transition? i mean, day-to-day -- i mean, how are we going to do this in this time period -- and i'm looking just because there's a whole lot of people out there wondering the same thing. it's nice to say in theory we're going to make this change but practicing matcally what happens when we go back in and we tell somebody we're going to start taking care of this change.

come on, you've thought about this. so share with me what you think the process is? we make a point why we didn't to some extent why we didn't get the money. well, get money to help build systems and so on, enhance match and we pushed for it all during debate. but the problem got to be if they gave you money to do all the technology that was necessary, you were going to find all these medicaid people who were currently eligible who are not enrolled and would have dramatically increased the entire plane and that's why they ended up stripping it out towards the end. >> the other issue is it seems to me that some standardization that's important. i mean, we're finally going to move in this country a place where you get healthcare not because of what your zip code is but because you get healthcare. and it seems to me we can't lose that goal.

the standardization includes a movement to the modified adjusted gross income standard and stream livening and income eligibility for medicaid so it strikes me that there's some capacity because instead of every state reinventing the wheel and creating its own system as we've always done historically and we are part of the reason for some of the complexity variation cost in the healthcare system because we all do it somewhat differently, there's standard days here and there may well be opportunities for economies of scale to states to band together for nga to take a leadership role and be able to do system design that everybody can take advantage of. but i don't underestimate the enormous challenge of moving information systems there. >> well, i think the answer to your question, governor, is some of us can and some of us can't. and i think to trisha's point, you know, i think there's a difference between giving us flexibility around policy and design and things that we need because our markets are different and our -- the demographics are different

versus being more efficient with administrative consistencies. and i think that's what you're saying. where why do we have 50 different medicaid management information systems in states paying claims, electronically pretty much the same way. we all use the same forms and yet we all have to buy different -- spend tens of millions of dollars on systems. and i think this is where our private sector vendor partners who are in that business can be enormously helpful to us and to cms as we think about where there could be administrative consistencies and still give us the flexibility on the policies. >> but our conversion. we just did the conversion and it was a three-year process, designed to be a three-year process as you know. and are we going to have the same kind of -- same kind of revision again now? i'm asking because to me i think it's a question that we're going to be faced with shortly should

the legislation move as it's currently planned? >> i think it's absolutely the right question. we're close to finishing a requirement of how many years? five years, six years. five years. and so we're going to be poised to implement just as federal reform comes down the pike. and no doubt we're going to have to make some significant -- potentially significant adjustments along the way. i think this is a great example of an issue that we as states need to be engaging with our federal partners on now. 2014 may look very, very far away. but in order to hit that 2014 date, this work has to begin now. and these really complicated systems issues are great examples of issues that we have to be joining the federal government now. >> given the fiscal constraints everyone is facing i don't know if your experience is the same but i'm having more difficult than i hoped to persuade the

legislator to make investments in systems generally because there's so many competing interests in those dollars but it's got to work one way or the other and that's part of the implementation process. i want to come back, joan, to something you mentioned. that is other constituencies. you're certainly right that we got to work with legislators who need to be brought into this process. providers, private sector, public at large to some extent. and i assume there would have to be some involvement with each of these constituencies in the process as we design our plans. and also a communication strategy so that the public knows what's going on. >> yeah, absolutely. i think a communications person that's coordinated well with the governors office and the legislature office's to help manage what these things will take and what the whole plan will be. i think one of the best things

about these bills and what i hope will remain in the final bill are the buried opportunities. trish sort of alluded to this. if you -- we actually had somebody analyzing these for us and looking for every single place in the 2,000-page bills ey aer sort of buried in rams. there. but they have public health grants and things that can -- we can use for population-based health efforts and to improve health status. things we've never had before. big investments in those kinds of areas that i think will bring certain stakeholders to the table that ordinarily might not join in our efforts. but that, too, has to be part of the communication plan. who's going to go after what grants? what populations will they serve? who will manage those and who will track whether those are successful, very important part of our work. >> i think we were a little bit

of the canary in the mine on communication and the importance of it. in our reform we reached a promise that got us great bipartisan support but profoundly reduced the funding available for our program. when we began, therefore, we could serve far fewer of the uninsured than we initially envisioned. yet we were held to that standard by some of the naysayers and failure was pronounced on day one without ever explaining that the promise lessened the dollars. so i think -- and when we look at what i perceived to be a pretty poisonous environment in this discussionfederally, when we think about a four-year ramp-up as we get to work, we ought to expect the people who are opposed to this bill will remain viperus and remain opposed and every step of the way worth saying where's the change? where's -- as we're trying to build. and we ought not to allow ourselves to get on the defensive because the public has to understand what the expectations are. that most of this doesn't happen

until 2014 and what we need to do to get there. it won't be pretty but we need to work together to get there. and i think the communication strategy may be the most important thing to think about in that four-year period. >> i think one of the most important objectives associated with communications is going to be around the individual mandate that is a central component of the federal reforms. and it's really about changing community norms. and we spent quite a bit of time in california during our 2007 debate on trying to emphasize that this is not about being punitive and heavy-handed but really working in partnership with providers, community organizations, philanthropy, nonprofits, and business community. local government. to create a culture of coverage as we called it where access to affordable insurance regardless of income was something that was available and access skwlibl and that isn't going to happen overnight.

that is an investment that requires a number of years. and we're seeing in massachusetts that had a relatively smaller problem to address, frankly. but i think as a nation trying to change community norms so that insurance is expected and valued and available. that's going to require significant communications and community-based outreach engagement and that will require resources that's a dispensable investment. >> we have to assume at least in theory that there's a possibility that there won't be legislation passed and that's one of our key elements of our summit to make sure we share experiences around the country. what will your states do, if there is no federal law, in terms of reform, implementation, strategies, continuing to educate the public about the need for a new way of looking at healthcare delivered?

>> well, we will move forward on our implementation of our healthcare affordibility act using a provider fee to improve reimbursement rates as well as covering another 100,000 low-incomed parents and children and adults without dependent children. but that takes us to 100% of poverty for adults and 250% for kids and pregnant women. and, frankly, i don't think the politics in colorado would lend itself to going very much further up on the income scale without federal support. i think that's about as far as i think the tolerance level is in our state for government-sponsored programs. i could be wrong about that. given the fight we have, i don't think so. so for us to make any progress for all of the people above those levels who don't have employer-based insurance and who need subs diswe would probably

need to look next at a massachusetts-type approach. a connecter exchange in order to find ways to get more insurance to people who don't have it. the big problem is the subs dis. you can't do that without the individual mandate and the subsidies. and in our state, given the tabor and the constitutional constraints around spending and revenue we would at some point have to go to the ballot and ask the taxpayers for more money. >> and maine has virtually all the insurance reforms in place in the federal laws. we've got medicaid coverage of 100% to adults, 200% for children and parents. it's hard to imagine where we go at this point. i think we, too, would need once again to work with our legislature to the individual mandate and share responsibility. but it's very much evidenced with us and it's hard to

envision we could go except potentially backwards. >> we actually tried to move forward in 2007 with a very comprehensive effort that governor schwarzenegger and nunez led. the framework for reform that we endeavor to advance in california is very similar to what's pending here in washington. if this here in d.c. fails, i don't see our state revisiting that comprehensive approach for the foreseeable future just given the nature of our state's fiscal circumstances. we're facing $20 billion budget deficit this year. $20 billion deficits for the foreseeable future. medicaid is our second largest area. our governor -- our public broadly both democratic and republicans running for governor this year have said they're not supportive of tax increases. that puts a tremendous amount of

pressure on health and human services broadly, medicaid specifically. and so in the near term i would see our state in the absence of federal reform and actually even with federal reform, the fiscal necessity being what it is, looking for ways to bend of cost curve within our medicaid program and the context of the waiver that we are working with the federal government in terms of renewing. but really looking at ways to move more of our nearly 7 million people who are in our medicaid program into organized, integrated delivery systems with a particular focus on seniors, with people with disabilities, individuals with significant behavioral as well as physical health needs and the dual eligible health needs. and we hope there's a new opportunity with this new administration to advance some long overdue and much-needed bold innovative integrated strategies with the population with which make up a significant percentage of state medicaid costs we're also trying to

advance more value-based performance strategies, do more for the medically uninsured in terms of testing different approaches, not medically uninsured. medically indigent adults. and finally outside of medicaid, and again those are strategies that we believe make sense regardless of health reform and with health reform would be really foundational, something we could build upon more effectively in california. but outside of the insurance card, we are spending time and continue to place a high priority of prevention and wellness strategies and this has been a high priority of governor schwarzenegger's for many years and something we believe we have opportunities regardless of the federal insurance reform and health reform conversation to advance and that continues to be a priority as well. >> jim, in listening to the discussions here, it reminds me that we've got the folks that are actively engaged in providing the services that are expected of our society today and yet at the same time i can't help but think about the fact

that really the most perfect system out there would be one in which allows us to take individuals who are capable of working and who do not have a disability or a disability which is stopping them from working and allowing them to be back into a work force, whether it's healthcare-provided, which is not at the cost of the taxpayers. and perhaps it's simply something which as we technically saw what is necessary for medicaid and so forth, i'm still convinced the only way we're going to make a healthcare reform system or a healthcare system actually work is one in which actually gets people off of medicaid and government assistance and back into an area where they are actively engaged in working and actively seeking or at least finding a way to help pay for their own healthcare. and as we talk about this, it

comes back to mind how do you take care of those individuals who literally have no place else to go. the folks that are out there right now -- if they could be working, if there's a way they could get them back in the job market again suddenly not only are our resources up higher at the state level but our direct expenses in terms of medicaid start to come back down. ...

>> that really does concern me. the folks that are up here are actively engaged, as you are out there, at delivering the service is trying to figure out how to pay for those services. but somewhere along the line we have to start getting people back off medicaid again and getting them back into a place where they are not part of the recipient side of the services. >> i think the federal reform actually allows much of that, as means reform dead on building a medicaid so more have that foundation. to create a subsidized product in maine is for the small group, individual soap providers. those folks who are a dollar over income for medicaid fall into a high subsidy and they're working in small businesses. and it worked that it works to

subsidize people. they pay something, we pay something for and the employer participates. the challenges can small businesses so state health insurance. but i don't think there's anything inconsistent in the federal bill with the notion of encouraging employer-sponsored coverage. >> let me challenge once. identify the cost drivers that were limiting. looking at the activity that we're talking about and so forth, we talk about cost drivers and things that really add to the cost of health care and so forth. we are actively engaged talking about it for months. the cost drivers that we actually impact, what can we impact? and what to impact either with the federal legislation or with state legislation that actually reduce the costs of health care across the board? >> and are focused specifically on our medicaid program, one of

the reasons why we have a relatively fast-growing program is we have a relatively low penetration of enrolled and organize delivery systems and managed care. particularly seniors and people with disabilities represent the most high need, complex, high-cost set of services. and there in a totally uncoordinated, unintegrated fee-for-service system. so that's an effort the governor and our legislator and ever to advance in terms of bringing the population into organized liberty systems, and slow the growth trend. so that's one of the major drivers in our program. and that's something in partnership with the federal government we think we will be able to secure support to move in that direction. in other areas, however, we hav what's called and home services program to we run a personal source of program that is about a 5 billion-dollar program, about $1.5 billion in state general fund. it's a tablet program. and terms of keeping people out of nursing homes but it's one of

the fastest growing programs. and in environments such as we been in, you probably read a bit in the news about the fiscal challenges out on the west coast, it is a fair question for the governor and legislature to step back and say what can we afford to do, what can we afford not to do? and they reach an agreement and said would not going to eliminate but we want to targeted to those individuals who have the highest paid, what most of risk of institutionalization. tough policy decision but a response want an environment of multibillion-dollar budget deficits. the federal courts have stepped in and said you can't do it. the u.s. d.o.j. has stepped in and said we agree, you can't do it. and so what the federal courts are doing, and i trust at least your turns are watching what's going on in the ninth district, is the federal courts are effectively coming in and joining every budget reduction california has ever been. these are tough budget cuts, consequential to both providers

and beneficiaries. but reflective of the reality as we heard our governor this morning, we can't spend money you don't have. gatherers have to balance budgets. the federal courts are basically saying to california, uganda lemonade and optional benefits such as this in home supportive services program. we had to eliminate nine optional benefited the courts upheld that. so you can eliminate the benefit entirely, but you can't target it. to a smaller group of people. so somehow low income vulnerable populations are going to be less disadvantaged by a narrowing of a benefit and eliminating. so that's an example where the state has tried to address some of the cost drivers. yes, driven by fiscal necessity is the responsible thing to do and the federal courts have stepped and said you can do. i think that's why we are junior-college this morning talk about states need not only financing for the medicaid expansion, they need flexibility to live within the budgeted amount of money. right now we don't have that flexibility and that's part of california's budget crisis. >> we've got to also remember

there's something very unique about health care. most industries offset their increased costs through technology, investment and capital, so one. it lower costs and offsets the price of their inputs. health care is quite the opposite. it's probably one of the few industries where technology is generally cost increasing because people demand higher level services then they go up in terms of higher the cost. it's probably education and health care, are the two industries in america where productivity changes negative. and i don't know how you get at that, because as soon as you bring on new technology everybody wants to use it. they assume that higher technology is a higher surface. it's very difficult or providers to sort that through. same problem you have, hospitals compete different types of technology and so on. other than regulating it, which is a place i think most of us

don't really want to go, it's hard to get at that. >> one of the things we haven't talked about, back to your question about where there is waste in the system, and i think there is waste and money to be saved on both administrative efficiencies and utilization is where is the personal responsibility of the consumer? the example, whether it's in medicaid, we do have some authority over, over these rules and utilization. so we can say no, we won't pay for an ultrasound every single month for a healthy pregnant person because it's unnecessary and it's wasting money. but private insurance plans do it all the time. and yet, and people might say, well, okay, that's fine. they can afford it. it doesn't affect everyone else's costs. but once you add all of that type of thing together in terms of both consumer behavior and a provider behavior, it does begin to impact the cost in the

overall system. and at some point we just have to bite the bullet and say no, we have to ask people to change their behavior and did some things up. especially when there's plenty of evidence that it's not necessary. or in fact it might even be harmful. high cost imaging is another example where a lot of states have really become much more aggressive in their prior authorization and utilization management of expensive things that we cannot find value in them. >> and if we look at the, i think a big picture, governor come was the notion of where are the cost drivers and what does this bill do about it. i don't think we can forget uninsured people are cost drivers. they're really inefficient. in taking care of the uninsured is terribly important. the system of complexity that we created by how we pay for it is a cost driver. and i'm very encouraged by the shared savings provisions that come into effect very quickly in medicare with providers working

with providers to share savings, to create a common care organizations that like it we piggyback with medicare and those providers and really great very much more efficient health care delivery systems? finally i think the insurance regulation and medical loss ratio, we've had luck with medical loss ratio. we've seen in the first year of a medical loss ratio and a smoker, one company returned $6.6 billion. in maine israel dollars. it may not be all we wanted to be but as you all talk is when it's an incremental kind of approach to get this faced up and fully implemented. >> we've had medical loss ratio's in our state for a number of years and they seem to work. we've also done the polling concepts where the ratio is between your most expensive rules and year least expensive pools have to maintain a relationship. and in doing so it stops what we call a company markets, moves people and are healthy and as they get sick or they leave or else they check the rates up into people can't afford to pay them anymore and then they are

dumped on the market again. i think those types of reforms should be included in any type of a national program. >> we've talked a lot about a number of topics here. as i mentioned at the outset you are all extras. so i would like to invite folks in our audience to go to a microphone, ask some questions, or will you in on the discussion. we certainly would welcome your thoughts and experiences and ideas on how we implement whatever might ultimately pass in the congress, or how we move forward on implementing our own state-based reforms. so feel free to chime in. or not. [laughter] >> at a minimum disk issue an opportunity stand up, get some exercise. >> i have a question relating to if health care reform doesn't pass, and that made his ability really goes away, how many states would you guess would start cutting back on medicaid

eligibility? >> if it doesn't pass? >> if there is no requirement, given the fiscal straits that states are in can you foresee states increasing the ranks of the uninsured? >> i will stay from california's perspective. again, we have some a difficult decisions been driven by our fiscal reality, not by a policy since ability that contribute to the publicly uninsured is a good thing. the governor has put on the table the prospect of rolling back eligibility expansions that our state legislature previous governor and acted earlier this decade during the dotcom boom when revenues were going gangbusters and we expanded coverage to 100%, a hundred and 30 plus% were disabled, reflected in important social policy objective in terms of covering more low-income disadvantaged populations.

when that expansion occurred the first couple of years, it was a very expensive. it now covers 1.2 million individuals, about $2.4 billion. california's revenues earlier in this governors administration was well in excess of $100 million that we're now at about $82 billion. it's a good example of an expansion that occurred when we had resources, the resources are gone. it regrettably is something that has been on the table, the stimulus, and the requirements are precluded from moving forward. i think it's a very difficult policy vote for republicans and democrats, frankly. but it is the kind of proposal that has to be on the table when you are in such deep fiscal restraint as our state is. so long answer to your question, yeah, i think states like ours would have to consider rolling back eligibility and contribute to a very dire situation. we have roughly 20 percent of our population has already ensured him lying on an

increasingly fragile if not unraveling safety net the. >> unfortunate with the outlook in general for states, because we've done a fair amount of work on this. you've got to remember that the biggest impact on states is one, two and three years after the recession has been declared over, and that's primarily because your big loss and income tax revenues. i think governor douglas just came in again, under your most pessimistic vote, is in the cycle. were probably haven't peaked in terms of where were going it. in a medicaid explosion was very, very late in the cycle. then going into what's known as a jobless recovery. most of your revenues are going to come back at the 2008 level until 2013 or 2014, and in most of you have robbed every trust fund that you have. so you're going to have to go back and pay those back. and so when you add all this

together, the whole decade looks pretty bad, but i think unfortunately it's not just california that in that situation. that's more the average state. so without federal reform, i think you going to continue to cover reimbursement rates were you think you can maintain access and beyond that, it's probably going to be eligibili eligibility. because what i've seen in state so far is with the exception of education, they've now got everything else. and there big time cutting higher ed, i would expect higher to come down from 10 percent to 5 percent of the average state budget in the next five or six years. so there's nowhere else to go. >> your numbers, i know, cover your governor with the context of no reform. but just to put a point, if there is reform, that we work with the federal government to

develop a responsible transitional funding strategy. because those kinds of numbers that national association of state budget officers put out a reporter this year, i think i should over the course of the 2010, 11 and 12 bit of time this was a 200 billion-dollar to militant state budget gaps, 80, 90 billion of which has already been addressed at 130 plus billion remains. again, education is effectively protected. many states have taken taxes off the table. medicaid even without those constraints is the second largest general fund expenditures. it's just not sustainable. these programs, medicaid cannot be sustained responsibly during this transitional time without continued federal support. >> i have to suggest this. your question, coming back here again, was with the reform or without the reform. without the reform, the states right now am i think there's why, for states that are bouncing their budget or have a

structurally correct budget. all of the states our challenge right now, and the biggest driver has been medicaid. because you have more people that are not working and their children are involved. in our case, 68 percent of the entries are medicaid population was for kids. 11% was were disabled adults in the last year. these are services that i think government feels a very strong responsibility for providing. we want to provide them. and yet at the same time as we see this moving forward, we're not balancing our budget know. it's going to get worse before it gets better for most of the states. we were looking at our revenues and they're starting to bottom out right now and we're hopeful and optimistic they will start to move back up. my fear was what do i do if this reform effort does pass? because i see increase costs for our state in this reform effort. and so regardless of which way this goes, i know what my costs

are right now. but if the reform effort does pass in its current form, then i see an increase in cost in the short term, not a huge increase, but i see a significant increase once i taken the reality of the provider inflation over a larger and larger segment that's covered by medicaid. and that does scare me because i can't see the way in which i can pay that bill without additional federal assistance. and i don't know where they're going to get it to pay its. >> i want to make sure i heard that question correctly. were more likely to look at curtailing our program if it does pass because we cover everyone up to 300 percent of poverty now, for her present in some of our pharmacy programs. and with the so-called woodwork effect and more folks come into the system were going to be an kind of a jam. a lot of fiscal implications all around. >> kim, you mentioned important of engaging the public, and the context of the individual

mandate. trish, you and understate what talked about the political environment that this is going to take place in. you have all been through very public processes of dealing with health system change in your state. and i wonder if you could give us some lessons about successful are maybe less successful ways to engage the public in these very difficult issues. >> i'd say what i said earlier. which is i really believe it's going to be more successful if it happens on a bipartisan basis. we went through several reform initiatives in vermont and 2005. iv does reform bill and tax increases that wasn't wasn't instructed in the way i thought would work for our state. but then the next year we came back. we all worked together. legislature, the other party and my administration and came out with a bill that had everything i one or they wanted. we are proud of our accomplishments. we are the healthy state in

america. twice and role according to the health foundation survey. we've got very low uninsured right now. it is working, but i really don't think it would work if it weren't on a bipartisan basis. and to be perfectly honest, that's what concerns me about what we're seeing happening in washington now. >> i think for us, it's never too early to start having those conversations. and today's wrote everything has to be very transparent. so your meetings have to be open and have to post everything on the web, and you have to be, put everything out on the table. in our world this is where our local health foundations have been enormously helpful, to be the facilitators or to provide the funding to bring outside entities to come in and help with the actual process. so it doesn't look like a government driven for partisan driven or one branch of government driven effort to you

really do have to bring everybody to the table. our provider organizations have been great partners with us, both medical society, the physicians and hospitals. but it helps a lot to have an outside person facilitating this process and helping you think it through and keeping it objective. but you can't start early enough, has been my experience. >> and i think whether the unfortunate, i agree, sad situation. but if we get legislation, i think what's incumbent upon us is it is the law of the land, and can we find ways and leaders, like you, governor, to say it is the law the land, let's bring both parties together. if we didn't pass a bipartisan, let's implement bipartisan. that's an enormous responsible for the states, the governors to find a way to do that, to move quickly to get us there. i also think community forms, educating people.

because there has been such the coverage has been so much about the politics and the fight and who is where, and so little of it is about the substance. i don't think most of understate it does go into effect until 2014. i don't think most people understand what's in it for them. i don't think most people understand what kinds of problems it solves. so if we couple bipartisan, public activity with all the stakeholders and providers, legislative and executive branch folks, consumer advocates together, and have community forums to educate people so that there's just an opportunity to take a deep breath, understand what the bill is and isn't, and how we take what it is and make it as best as it can be. >> it's the town halls that occurred throughout the country last summer are any indication, it gives us all a very sober sense of the communications challenges that all states will experience. and i can't speak for other states, but it's my observation

at least in california where legislature and governor pass laws, especially big complicated laws, they just move on to the next one. and it's up to people like us to figure out how to implement. and rarely does government and my judgment, in my observation, making investment in outreach to the community, and to purposefully engage a diversity of community interest to help them understand what government did and why, what it means, what it doesn't mean to try to knock down some of the missed industry. california do this in the late '80s around welfare. and it's an important investment of time and effort. especially an issue of this complexity and import. and in 2007 we did have the benefit of some great support from our health foundations to test different strategies for bringing the public into this incredibly conversation -- complicated conversation around health reform, to understand the

different pieces, to understand the trade is, what it meant for them, what it didn't mean for the. and i think similar efforts will need to be undertaken if, in fact, the federal bill is enacted. >> we did early in our reform with the help of the main access foundation and a group called america speaks in which people randomly selected. citizens were randomly selected to come on a saturday all across the state, they were connected by all kinds of great technology. ever ask him and walked away a seat. there was a book they had to read before you ever walked to a sense of tough choices. and it was an extraordinary activity. it was independent. it was nonpartisan. it was factual. people, real folks engage in conversations. share with each other across the state what the foundings were. the press covered it. i think he did an enormous amount to educate people about what the cost drivers and health care work and educate us to the conclusion that none of us want to make tough choices. >> we did an american speaks in

california as well. we have 7-ton balls, 4000 plus individuals from around the state. it was a really robust thoughtful conversation and it was a good, one of the takeaways was that when you engage people, provide them information, facilitate objectively across exchange of information, people move from rod judgment to informed, uninformed opinions to informed judgment. and that is a hugely time-consuming and resource intensive. but it's the kind of effort i think we're going to need to undertake. the difference in california's our media didn't cover it. >> that's what it's nice to be a small state. [laughter] >> but we did a background briefing paper for the meeting with all the stakeholders who, it's fair to say, were poor a set of each other in understanding it. it probably took longer to draft that book to a point of where of consensus. than to organize.

but it was terribly, terribly productive. >> dr. paul jeers is here. he is a recovering state official. he did such a great job as for bonds commissioner of health. now he is the executive director of the association of state and territorial health officers. paul, thanks for being with us. >> we keep touching on issues cost drivers and in many ways i think the problem with the costs of this country is revenue. that the entire system is maximizing revenue. unnecessary tests, unnecessary procedures, unnecessary medications. and yet it is politically almost unacceptable to address that. and i want to ask you, what is the role, if there is will, of state government in looking at all these unnecessary procedures? and we thought were individual responsibility, but this whole system is designed that way. and i want -- wonder if congress look at evidence-based medicine and how that should guide us. and my guy that came a statement

you can look at that but you can't use it to determine payment. war when the u.s. services task force came out with some recommendations recently it was a political nightmare when they were talking about the cost effectiveness, the actual harm done from access to procedures. so is that something we can address, or do we continue in this fee for system, keep driving the cost of? >> let me just make a point. i would argue we don't have any choice but to take that on. because there's also another scenario that nobody wants to talk about. and that's that we create a new subsidies for another populati population, but actually accelerated these for a time period. because we got to look at both levels of government, federal and state. the only real programs that are out of control our health care. even social security is only going up about 4%, but cbo is projecting medicare and medicaid is like seven or 8%.

and given what the federal deficit is now, we're going to hit a point, i heard one of the rating committee say they toyed for the first time downgrading u.s. debt today. so it seems to me we've got to be careful that there isn't this other scenario. and really begin to focus on the delivery system. that's what's got to change. and it's got to change now. because of this whole thing, cuba, could unravel at some point in the future. if we don't get a handle on. federal government can only go into debt so much. and if it does unravel people don't come to the window and accept our debt, we economists don't have to deal with that problem. >> i think it is the role of government to take that on. and i think, i absolutely agree. fee for service is not just an inefficient way of delivering

services from a financial point of view. it's not good care for people. it's not good quality to have your 65, 70 year old mother seen five different doctors and on 12 prescription and going to any clinic she can find in florida. and no one is talking to one another. that's just bad care. and it's not because the providers are bad. it's because they don't have a way to courtney with one another and to do the best job they can possibly do. so i think it is the role of government to be the convener and to be the place to start and to force that conversation. i mean, we talk about carrots and sticks and we joke in colorado that we don't to beat you with a stick, but were happy to beat you with a carrot. by facts the mac so if you don't want to go the full blown regulatory route and a government intervention route, then you have to bring the players to the table.

we can't say to hospitals we're going to put all these initiatives in place to reduce emergency room visits and inappropriate hospitalizations and readmissions and impact the revenue if we don't, at the same time, change the way we pay them so that we pay them better to do the things they do well and the things they are doing right while we're taking money out of their system when they are doing things we don't want them to do. so you have to do all this at the same time. and i completely agree, service delivery reform, changing expectations on the part of consumers and providers is the only way we're going to move the dial on the money. and it's all about the money. >> and it may be that another federal partner needs to work with us and as a federal trade commission. think about different mechanisms of organizing services. it really flies in the face of traditional antitrust thinking. and i think as we move to an accountable care organizations what is the role of the ftc,

what is the role of antitrust and had we moved there in a careful way? >> and final piece, i would offer goes back to the question about communications. what strategies can we design and employ to bring the public more fully into this conversation about moving to more of an evidence-based health care future. as you know, paul, the outcry after the task force recommendations came out, was a pretty stunning. and in my mind, just really underscored yes, it's critical we develop the evidence-based, yes to advance what we know to be effective, but we got to bring the public into this conversation about how the organization delivery of specific services is going to be influenced about what evidence as to what works and what doesn't. >> as you know, paul, because you taught me this, both of our expenditures are in managing chronic illness. and that's got to be a key focus of our reform efforts. that's why we believe so strongly in screen for those chronic diseases in our medical

home community health game strategy, if caring for people, at my state of the state message earlier this year, i don't know if you do the same thing, mike, but governors like presence often like to recognize people in the gallery. and rather than some athlete or other distinguished citizen, i had a young lady who has been involved in a medical home pilot project for several years now as an example of how these reform efforts can really work. she was out of work, not managing her chronic disease, not getting very good about herself. and we got her into a medical home, and her team started working with a. now she is back to work. her illness is under control. she has a great outlook on life, and i want to put a face on the kinds of reforms that we put in place in vermont to show that it really can make a difference.

so i think we need to do all of what we've been saying here, and you're absolutely right, that in the end, a revenue driven system is going to continue to cause a tremendous fiscal and economic stress and less we get that under control. >> i think there's one more item that probably has to be discussed would talk about cost containment or at least the cost drivers involved in the health care. most consumers, when they go to a doctor, they are not in a position to negotiate a price because they needed service at that time. if your child is ill you don't want to say how much is going to cause me to see the doctor for the time. we've relied in the past on health care management organizations and health insurance companies manage their organizations and so forth, to put ago she was those prices are for people that finance is in the need for those types of services. but there's another discussion out there, a large part of our population is saying me make my

point choices, i will negotiate my own, i will take actual program and so forth. but i will do my own negotiating. there perhaps is room for both in a reform effort. but it most certainly to be able to provide a place where individuals can go and get trusted advice, and recognize that there is a service being provided for a fee being paid, as far as helping to share that if you have a 70 year old grandmother who is wondering which direction do i go and which prescriptions am i going, who takes the time to sit down and to look at everything and you say this is right or not? at the state level, at state level, we have contracted with an organization for our high risk pool. and anybody who comes into our high risk pool has direct contact with a person that helps them, and that looks at their long-term needs.

whether it be diabetes, would it be heart disease and so forth. and the idea is not to restrict service. the idea is to use someone who clearly understands how the system works, and to make it work as efficiently as possible for a person that really doesn't have the expertise to make those decisions. and i think there's room for both in a reform system, but you've got to bring the health care providers and and experts that could have the best interests of the citizenry expect all those technology as radon is driving a lot of because, on the the other hand i think information technology can work to reduce it. i mention one example earlier, my wife just -- and i wave her? we just with an experienced and got three prescription for the same drug, from three different positions, plus of the samples that she took away from the emergency room. and if that were all on a

medical electronic record summer, presumably, each succeeding physician would have known that and not prescribed a duplicative script. so i think there are opportunities to reduce cost through technology as well. >> this is one of the weight states learn from one another, whether it is the right way to use technology, whether it's the models for case management, care corporation like you mentioned, whether it's an accountable care. a lot of us are replicating the pioneer state to try accountable care framework support service delivery. people forget that we all talk to one another quite often. the medicaid directors get together regularly. they learn from one another. they talk to each other, and are trying all of these experiments. and it's great stuff, and it will improve things, but it still is only to get a so far in terms of the coverage issue.

i mean, we can be the drivers, i think, of the change in the service delivery and payment reform, but there's only so far we can go uncovering more of the uninsured without additional revenue sources. >> any other questions or thoughts? >> thank you very much. to put a number on what paul shared with us, one of my hats is chairing our health care commission and alaska, and we've had academic experts talk with a group there. and it's consistent with my past experience sharing technologies i wish and good for one of the health care systems that's been held up as ideal for the country, that about 30 percent of the dollars we spend in health care is not really supported by the evidence. and when we think of 30 percent of the 16 or 17 percent of our

gdp, potentially being available, there's a lot of potential there. another elephant in the room that i think we have to have the political will to deal with, and i would ask for comments on that, is priced. i live in a state where price is particularly high, but comparing workman's comp reimbursement rates, our neighbors, our neighbors to ear workman's comp a state hundred some dollars for a knee arthroscopy. we pay over 4000 in our state. it's an issue that we need to take on. and the third, getting to governor brown's concept, where are we going to find the money. we spent 3% or less of our health care dollars on public health areas. and i've got enough greater and i've been around enough, long enough that i have known the kids that got polio and got into iron lungs.

that had measles and a terrible complications of that. almost all of our states have backed off, for example, from our universal vaccine program. but there are things we can do in the public health realm that other countries that spend half of our percent of gdp and half of our dollars, and result in lower infant mortality rates that we have. so we are all forced to look at where can we make cuts, and we have to do that. but there are some areas where investments can have a payoff. all of those take a lot of political will and so i am asking. and paul mentioned evidence-based medicine prize, public health investments, i'll take political will where we have a lot of players with lobbyists, hospital physician groups that will be pushing against it. but i'd be interested in some comments. appreciate that. thank you. >> i will take the price

question. i think we're one of about a dozen states now that are running a piece of legislation this year to great and all. claims database. because until you have the transparency and you require players to do that information, you can get a handle on that. and you know, what a provider charges is somewhat irrelevant because they can just make up that number. and and to we understand fully, you know, why doesn't insurance company pay hospital a one price for the very same procedure and a different price than they pay hospital be, or wifi different insurance companies pay hospital a different reimburses for the same procedure. we don't understand that until we get a handle on that and can then use those data for payment reform so that we know what value looks like and we pay providers for the fact that we are looking for. but we can do that now and

serving not in colorado. because we just don't have that information. >> we do. we avoid the earliest all-payer claims database. and you can put in your interest plan and compare most procedures, most common procedures across payer and across facility. the next step with that kind of data in forms citizens is one piece of the but the bigger piece is sort of the payers saying this information transparent begin to be held accountable. on the potential it gives us to tear benefits and to look at efficiency and effectiveness and to bring in our quality measures as well. so that you can then reward quality, efficient providers with payment reform. and i think we've got a foundational step, but it's not an easy task to take on. >> let me take the public health piece of your question. we found in our comprehensive reform conversation back in 2007

as i touched on earlier, all of the attention, all of the political focus and the energy and effort was around the insurance card. who gets a card, who doesn't get a card? once the card cover, what does it cover? how are we going to finance the card, et cetera, et cetera. and that's just were all the political energy and folks and attention was. governor schwarzenegger was totally engaged in that but also plays a very, very high proton prevention on strategies recognizing that yes, coverage matters, delivered system reform matters. but population-based public health matters as well. and actually we need to wait and see if we ultimately see a final federal bill and what's in it. but there has go to bed and recognition that provincial and willis is a critical piece to bringing down the growth and the cost of personal health and improving health outcomes. and so we're encouraged by what we think is in there in the resources that could become available to states to focus on more populations, specific

strategies, particularly as it relates to obesity and overweight. and providing resources to support communities, where we can engage business community, education, health care, government, et cetera, to support unities where healthy choices are more available and safer both on the potential site and physical fitness site. >> you mentioned that a lot of folks are cutting back on the prevention side, and i know that it's an area of discussion. we still do the hpv vaccine for the girls. we started 11 to 18, and the we offer that on a voluntary basis, we now offer it to 12 year olds and so forth which i think is their important. we still have a free vaccine program for all children for influenza after the age of, i believe, it's 19 right now. and then this last time we went into our universities as well. those have been positive i think. i will not cut back on those. there was also a discussion

about how do we figure out the bags and so forth and the cost involved for doctors and hospitals. we've established a web-based program in south dakota were hospitals a status with a surgical procedures are and so forth, what the costs are and people can go in and compare the. i'm not sure there's been a lot of people accessing that. i think more people look at our state website to find how much the governor makes than they do about anything else. but we do know this. insurance companies use to pay based upon what they would consider to be, they take a list of all what the doctors would you pay for a particular procedure and they would pay based upon what the process i was. like they may pay at 95, at the 95th percentile, which is not 95 percent of the prize, but what 95 percent of the doctors charge. or the 90th percentile which is what and 90 percent of the doctors charge. that is what they would pay on. but people figure out pretty quick that based upon that, it meant that everybody need to start charging more in order to drive up the price that

insurance companies would pay based on. and that would drive up the prices in terms of premiums to the next up on it became, many of you remember the resource relative value scale for payments based upon what the least expensive of prose to taking in a surgical beach teacher was to give an intro to do something, then you paid what and in turn would do. now i think most of the companies base it on what medicare is reimbursing. in the upper midwest we have the lowest reimbursement rates for medicare of any place in the country. and yet, our value that we are receiving is pretty doggone good. and so part of what i think we have to start talking about is, is there an acceptable about you, is there an acceptable way to talk about not so much how many services are being provided, the quantity, but the quality. and, you know, is there a way to reimburse physicians and facilities on an acceptable

method that recognizes the successes and the amount of work that's been done, recognizing that the better the facilities are going to take on some of the more difficult tasks involved in some of the more serious illnesses as well. i don't how we do that but there are folks in this room that can figure it out. >> i suspect over the next 24 or so hours they will. and the summit will continue. we've come to the end of our time for this panel, but i think we've had a great discussion about implementation of the federal bill, that may be coming our way soon, or ideas that we can continue in the absence of one as we try to improve health outcomes and the overall health of the people of our great state. let's thank our panel. [applause] >> you may all rise now. stretch your legs that if you want aouple of circles around the room.

[inaudible conversations] >> the house budget committee yesterday laid the groundwork for a possible final vote on health care legislation later in the week.

the committee passed what's called a reconciliation bill which may allow the house to pass the senate version of the health care bill while preserving the ability to make some changes to the legislation without subjecting it to a senate filibuster. here's a look at and our portion of the meeting. >> if everyone will take his or her seat will begin the meeting for the day. >> the budget committee meeting today in a ministerial role. but it's part of a larger process of the deciding how we share the cost of being sick and our society. our task is to vote on reporting the recommendations submitted to the committee under the reconciliation instructions and a current budget resolution for the year, fiscal year 2010. our role in this process stems from the reconciliation

directives in section 202 of the budget resolution dealing with health care reform and higher education. our committee's main contribution to the process was to require that the spending and revenue changes made for health care reform and education reform not just the deficit neutral but actually improve the deficit. the present subscribe to the principal and so have the house and senate. the budget act assigns us, our committee, the role packaging the reconciliation bills and transmitting them to the house vote without substantive change. the rules committee has the authority to make substantive changes and the board of reconciliation rules bills as amended to the floor. i will briefly describe our purpose and to make an opening statement limited to 10 minutes followed by an opening statement limited to 10 minutes by the ranking member, mr. brian. without objection, other members wishing to make a statement may have it included in the record at this point. after opening statements the

committee will take up a motion to report to the house. the recommendation sent to us by the authorizing committees and response to the reconciliation instructions that i have decided. after its passage will move to consideration of a maximum of 10 motions on each side, all nonbinding, subject to our mandate which is to finish before midnight tonight. or turned into puppets. these motions request the chairman of the committee go to the rules committee and ask that certain members be made in order. i will outline the process in greater detail when i come to the point. i would remind all members that the chair is authorized to declare a recess and time based on the agreement we made in our organization earlier this year. now i am on the 10:00. the budget act calls for this committee to combine the legislative language said to us in october the response of reconciliation we structured that were included in the budget resolution for last year.

passed last year. and then report the product to the house by way of the rules committee. the budget act bars us from a mini the bill. we are told to assemble and reported or file substantive change. in response to the reconciliation instructions and last year's budget resolution, we have received and we have before us, legislative let which sent to us in october from the ways and means committee and from education and labor dealing not only with health care reform but also of higher education. by the budget committee cannot amend the language that the authorizing committees have sent us, the house of representatives can embed and intends to do so that any reconciliation package that the house passes and since to the senate is going to look very different from what is before the committee today. we are taking the next up in a long arduous process to resolve the debate on health care reform. critics may suggest that the process is moving too fast and congress has been considering how to reform health care system and expand coverage for more than one year.

during this congress the house held nearly 100 hours of hearings and heard from 181 witnesses, democrats and republicans. during the market of the three house committee of jurisdiction over health care considered 239 a minutes from democrats and republicans, and accepted 121 commitments, including some republican amendments. it's hard to understand how anyone can claim that this bill is being rushed around through the house. in view of those facts. by most measures we have bar none the best medical system in the world but it's also by a wide margin the world's most expensive system. it's not really accessible to millions of americans. each member here has tales to tell about what is wrong, what is right and what needs to be fixed. the reviews express today are likely to be kaleidoscopic. but no one will dispute that one, health care is increased fully unaffordable, especially for those who would like insurance and rising cost ones.

not only in household and business budget, but in the federal budget as well. high premiums are putting health insurance out of reach for more and more americans and even those who have insurance have no ironclad guarantee of protection. annual and lifetime caps can leave the sick with astronomical bills, bills that could wipe a family out. even if they had insurance that is if they have insurance that may not have the coverage they need. the final text of the reconciliation bill that the house will consider now is not before us but it is clear the health care provisions will uphold principle of the majority of people i think support and a majority of this congress should be able to support and agree upon. for starters, we need insurance underwriting reform that restrictions would the denial of preexisting conditions are raising or due to raising renewal premiums what insurance is needed most active the insured suffers and major illness. second, we need a far more competitive marketplace for

insurance. where consumers benefit from choice and competition. third, we need affordability credits to individuals and small businesses so they can afford insurance offered in the free marketplace is. fourth we need to strengthen medicare by closing the donut holes, so-called, by lma overtimes to medicare advantage and we need payment reforms that encourage doctors and hospitals and other providers to stretch quality of care over quantity of care. all these and more, all of these the same or a dress in the competence of the coming before the house. everybody's own perspective on what reform is needed, but let me state facts are my own state to make my point. according to statistics provided by the human services in my state, south carolina to the 764,000 residents currently lack health insurance, 290,000 residents would be able to get affordable coverage and health insurance exchange that we're proposing in this bill.

127,000 seniors would have their brand name drug costs and the part they hole cut in half. 49,300 small businesses would be held by a small business tax credit to make premiums more affordable. they make up about three quarters of all businesses in south carolina but only 40% are able to offer health care coverage. we will also hear today the reconciliation was not intended for this purpose. reconciliation has been just 22 times in prior years and on 20 of those occasions republicans were in the majority and at least one house or in the white house. in 2001 and republican colleagues use reconciliation to pass massive tax cuts and worsen the bottom line on the budget by $1,350,000,000,000 over 10 years. in 2003, the second round of tax cuts using reconciliation at its $350 billion to the deficit. by contrast, the clinton administration use reconciliation in 1993, the deficit was reduced of a

$496 billion over five years. in reconciliation was used in a balanced budget act of 1970 -- 97 and it was used to create just, children's health insurance, medpac for oversight and medicare advantage. what we do today lies well within those present. all of my remarks on health care reform but before closing i should add that the legislative taxi forced to they also include higher education, student loans, pell grant provisions and if the house passes the higher education provisions of the reconciliation bill, it will take a player this week, it will result in a landmark investment and higher education making higher education more affordable and more accessible. in doing so without adding to the deficit. a productive economy requires demands education is successful, affordable and of good quality and higher education provision being considered today will help us advance that cause. so today the budget committee

meets to perform the important but limited role envisioned for the committee under the budget act. and take your next up would be in the process of bringing to fruitful conclusion our work on these vital issues. i now turn to the ranking member, mr. ryan, and recognize him for 10 minutes for his opening statement. mr. ryan? >> thank you, mr. chairman. before discussing health care reconciliation, i want to begin by thanking you for continuing this committee's tradition for allowing a full and fair debate and giving the minority opportunity offer motions and commit to modify this reconciliation bill that you've always been a gentleman and i want to simply say at the beginning of this process thank you for continuing to be one. today in this committee, we begin what might be the final chapter of this health care debacle of my friends in the majority claim that what we're doing here is simply paving the way to fix a mildly flawed senate bill. they argue it is a simple frequently used procedure to move legislation through the senate. that's not what's happening here, and we all know it.

this is, in fact, an extraordinary and unprecedented abuse of the budget reconciliation process. reconciliation has never been used, never, to push through a 1 trillion-dollar expansion of government, and to seize control of one-sixth of the u.s. economy. no one has ever employed the process to leverage such a vast social change based upon a token $1 billion in savings. while we are facing a one and a half trillion dollar budget deficit alone this year. and doing it on a deliberate, purely partyline vote. the only bipartisanship in this procedure is in the opposition to it. never before has the house committee process been so grossly exploited. that thousands of pages of legislation reported by the committees of jurisdiction are irrelevant. even before we vote on them, we will report these provisions right here as the process

requires, and then they will all be stripped out, discarded, tossed on the ash heap, and in the real legislation will get written under the cover of the rules committee. in other words, we are right to creating a legislative trojan horse in which a handful of people, hidden from public view, will reshape how all americans receive and pay for their health care. and then it will be rushed to the floor. and members will be forced to vote on to beat another artificial political deadline. we've also learned that the house might try to pass this 2700 page senate bill and sent to the present without actually voting on it. it appears that you are going to deem passage of the senate bill in the rule. last week, and a stunning and revealing statement, speaker pelosi said, and quote, we have to pass the bill so that you can find out what's in it, and quote. this is the bondage transgressive at the resident

promised? the arrogance, the paternalism, the condescension to the american people is just breathtaking. this is not just a simple tics are built either. this is the linchpin for health care. it's the vehicle for the backroom deal that will buy the votes so the house can pass the senate care health care bill, which been supposedly will be amended by this bill. to put it another way, if this process fails, the whole health care house of cards collapses. of course, the real reason we're all sitting here in this room is because of one man. scott brown. we are here because scott brown won his election and got elected the united states senate, said there by the people of massachusetts. governing here today. we are greasing the skids for an abuse of the budget procedure intended to control the size of government, not expand it. but the sta