>> coming up next, a world economic forum about economic growth and then new ideas about financing health care, and charlie cook gives an overview of the 2012 political landscape. at the world economic forum, world secretary general joins to talk about how sustainable development can lead to economic growth. the panelists discuss the role of businesses and the advancements being made in development and the environment. microsoft co-founder and wal-mart founder debate in this one hour event. >> okay. well, welcome, everybody.

our subject this morning is can the state of development drive growth? how? what are the strategies? what do we know that works? what do we know that doesn't work? to kick off this panel secretary ban ki-moon, and then we'll go down the panel for everybody and open it for discussion. secretary general. >> good morning, everyone. i thank heads of state and government for participating as panelists. ladies and gentlemen, for most of the last century, economic growth was fueled by what was a certain force.

the abun dunce of -- abundance of natural resources. we found our way to prosperity. we lived in consumption without consequences. those days are gone. in the 21st century, supplies are running short and climate change is also showing us that the old model is more than obsolete. it has reppedderred it -- rendered it extremely dangerous. what kind of model is a recipe? it is a global suicide pact. what do we do in this current challenging situation? how can we create growth in a resource constrained environment? how do we lift billions of

people from poverty while protecting the ecosystems that support climate? how do we regain the balance? all of this requires rethinking. sometimes out of box thinking. this meeting of the mighty and the powerful represented by some key countries of presidents. it may sound strange to speak of revolution, but that is what we need at this time. we need a revolution, it's revolutionary thinking and revolutionary action. a free market revolution for global stainability. it is easy to mark the word sustainable development, but to make it happen, we have to be prepared to make major changes in our lifetimes and our light,

we have to connect the dots between climate change and what i might call here wef, water, energy, and food. [applause] i have asked the president halonen to connect those dots as they meet our high level panel on global stainability. in fact, i have to tell you president was here yesterday evening, but because of the situation in africa, he has to leave this morning so he asked to convey his excuse and his regards to all of you. i have asked the high level

panel members to take on the tough questions. how do we organize ourselves economically? how do we manage in connection increasingly scare resources? i have asked them, the high level panel members, to bring us the good visionary recommendations by the end of this december, so that these recommendations can be fed into intergovernmental negotiation process until we have a summer meeting. as we begin our discussions, let me highlight the one resource that is scarriest of all. time. we are running out of time. time to tackle climate change. time to achieve sustainable resilient green economy, green

growth, time to generate a clean energy revolution. the sustainable development agenda is the fourth agenda for the 21st century. to get there, we need your participation and your initiatives. we need you to step up, spark innovation, lead by action, lead by example, invest in renewable energy for those who need them most, your future customers. expand clean energy access no developing countries in your market of tomorrow. join our global u.n. energy pact. embed those clean energy principles into your strategies, your operations, your supply chain. to government leaders sitting

here and as well around the world, send the right signals to build a green economy. together, let us tear down the wars, the wars between the development agenda and the planning agenda between leaders, government, and civil society. global energy and global stability. it is good politics and good for society. what we really talking about is going back to the future. the asian multidivision between themselves and the nature award. they understood how to live in harmony with the world around them. it is time to recover the sense of living harmoniously for our economies and our societies.

i want to go back to some imagine the past, but to reap confidently, constantly into the future with cutting edge technologies, the best of science, and entrepreneurship to build safer, cleaner, greener, and more prosperous energy. there is no time to wait and thank you for your commitment. thank you. [applause] >> secretary general, thank you very much. you know, president in coast costa rica has a saying that i like that there's no planet b, so plan a better work. [laughter] president halonen, bring us up to date as plan a might work. as mentioned, we have taken a

risk for co-sharing this panel where we have a couple members already with us. in order to find a new model or find new ways to show the positive development because we all know we have this modern civility and we need economic growth and that's welcomed, but we need justice, and it should fit also in all the frames. ban ki-moon already told about what we are lacking, the scarce resources, but i would say we have other resources we can use. productivity, of course, but many other things to make this world more harmonious. i think since already 25 years

ago it was said we need this kind of trinity, but the problem has been that through the years, we have noticed these three different items in various ways. we have, of course, the millennium growth, we have -- the basic model is still something which we can expect to cause more kind of a crisis. we have, of course, the globalization and we all agreed, all sides of the society that we need the fair globalization which would create more jobs because luckily the people want and their earnings with a decent

job both in the south and in the north. of course, we have become more and more realizing that there is really only one planet and a place for all of us. of course, food crisis, oil crisis, financial crisis, all this now and then awake us, but now we are working to the to see the elements of this modern trinity together. yes, good economic growth, but in this frame is social justice and also ecological frames. i put a couple things more. for instance concerning the energy, if we are keeping us in the traditional way using the energy or the using these resources of energy, so, yes, we are letting them quite much in the future, and we, of course,

have the side effects. if we are more intuitive, if we can find renewable energy resources and other ways how to be smarter in that so we have lots of possibilities. one thing more, we invest in people. i know coming from a country and we have pretty hard winters, and we know investing in people, education, is one of the good answers not only for their research and quality of life, but it's also reasonable and it has some effect in birthrate and some aspects bill gates will speak about that, but also i would say the gender. if you are looking at this panel, you hardly believe that mr. ban ki-moon has made this

panel, this panel of stainability, we have 50/50 women and men, and i think it would be one of the key answers. thank you. >> thank you very much. [applause] you're coming from the private sector, half the audience is carrying blackberries i'm sure. >> two-thirds. >> two-thirds? what can you tell us from the way you develop your products now that might be applicable and scalable for countries thinking about sustainable development? >> well, i mean, thank you very much and i think there's a little bit we can learn and, of course, you got to do sustainable practices and, you know, it's not only how you make the products and also what goes into it and also how you consume

the infrastructure it works with, but, you know, i'd like to, you know, i think there are bigger questions at hand really, and so i think, you know, to start off, i think it's remarkable that the forum tackled this issue early. i think the people here have done a remarkable number of things and obviously i'm honored to serve on this panel which is being ably chaired with cochair president halonen, but i think we have to ask ourselves bigger questions than just business because if you look at the bruntland report, all the great things business is doing and these very good initiatives and all the great things that the forum is doing, the problem is far worse than it was 20 years ago, and it gets worse by an increasing rate every year. though we do things, i don't

want to come here, a keeper of false positivism, and because i don't think i'm doing any real service to the issue. i agree with the secretary general and president halonen. i think we must be extraordinarily ambitious here. i don't think we can be incremental. george shores and i announced the new institute for economic thinking and our funding into it yesterday. my view is we have to fundamentally rethink economics. you know, you've had waves of economics over the years. you have adam smith who kicked it off and keen at a time when institutions were messing up, and friedman when we were in crisis. i think we're in a crisis now, a crisis of economics. we didn't know how -- we thought

we knew how the markets worked, but we didn't with the crisis so there's gaps in our understanding of economics. there's gaps in the global institutional apparatus. there's -- and also how do we bring in public goods and that's the car thing that this is a difficult thing to do, and we don't know how to bring in public goods into economics. we also, i think one of the things we have to ask ourselves here at this forum is what is the role of the forum in a problem that we know is getting worse at an increasing rate even though we're doing virtuous things. i think this is something, you know, do we redefine the role of fiduciary? my job is private fiduciary, but should i have a public fiduciary

role? >> answer that question. >> well, i think we're in a pretty deep hole, and the measures we have been taking for 20 years have, though they are virtuous and commendable, the problem gets far worse every year, and the only question is can you stop a run away train? you know, my personal thinking, absolutely. i think you should bring in the public fiduciary of the role and rethink economics, and i think you have to be weary of false positivism and realize that tech is an engine that plugs into the framework that you give us. if it's a framework of global conflict, they make technology tools for conflict. if it's an era of consumption and enjoyment, it's consumer tools. if it's scarsty and factoring

better management, technology innovates to that, but it's not an answer into itself no more than markets are answers into themselves. that thinking is a very, very dangerous one, but i think it's a time of tremendous opportunity. i think you not only have to rethink economics. i think you have to rethink your institution. i think you have to think your standards, transparency, measurement frameworks, and you have to remember we've hit times in this world before where there's enormously radical thinking in economics, things like taking away slavery and eradicating smallpox, so we are beings capable of radical rethinking, and anybody who steps back, looks at the issue says we're not dealing with this particularly well. again, the one thing i'm going to say to business, what is their role in this crisis when

you know the good things specific business is doing is virtuous and corporate responsible and sustainable in its own element, and yet, the problem gets far, far worse every year any way you look at the math. >> thank you. president -- [applause] >> thank you. >> you're a steward of one of the world's great tropical forests and one of the world's richest pools of by yo di -- biodiversity. you have been involved with this for a long time. it's an incredible environment. >> yes. that's owl basic policy. we have to increase the weather of the people by helping the economy grow. on the other hand, we have to have the proper environment including protecting our rain forests. what we are doing now is, of

course, we need to have a strong inclusive and sustainable economy group by the conventional wisdom say by having the investment, export, operating of government spending, and also household consumption, but, of course, we need to realize that we should not destroy our environment when food is coming, the energy, and our natural resources. what we are doing now, and it is also our government policy, in terms of protecting our forests, protecting the animal environment, we are continuously

conducting -- we are working hard to combat forest fire, managing wetland that is found in many places in indonesia. we also conducting a national campaign to plant one billion trees annually with a strong belief that 25 years from now, our environment's not only getting back to normal, but we could actually improve the overall situation in the environment. i believe very strongly that we should not contrast between the necessity of achieving economy growth and the obligations to protect the environment, but the

public is defining economic development from the aspect of developing countries. i would like to suggest a few things. >> please. >> first, if we talk about sustainable development in a wider meaning, it means we have to have continuous growth. it means we need stronger economy capacity over the years, that are in development in indonesia. number two, we have to improve the weather of the people. that's why we are committed to achievement. it means less poverty, and we have to ensure that the growth is inclusive. we need equity, growth with equity. that's why we continuously impower our people including financial inclusiveness so the

small and medium enterprises households have good access to microcredit, just to give the opportunity to have a better life, and in times of crisis, we need to think about building social economics. also, factories are economic security. it means people need job security, and also we have to think about human security, how to overcome immuneble diseases for example in developing countries in indonesia, how to manage disasters that happen many times in indonesia, how to combat terrorism, how to have security across the country, and last but not least, how to have a good government and continuously combat corruption. from factors -- two factors. i do believe in order for the

sustainable, we need to have competitiveness. if those, they happen, it means our development would be subgenerating, and all those factors must be connected to our moral obligation to protect the environment, so that's the cornerstone in my view the meaning of sustainable development. >> thank you very much. [applause] >> wal-mart's probably got an economy bigger than several countries here at this meeting. it isn't unfair to ask you this question from a national point of view. what have you learned about how one can marry profitability and stainability? >> sure. well, thank you, tom for the opportunity, and i'm honored to be serving on this panel on this

very, very important topic and pleased to answer the question. i would say first of all in particular related to emerging economies around the world, i think all of us would say that we are pleaseed that there's rising middle class and people all over the world living better and have a desire to live better over decades in the future. i'd also say though that all of us would share with this will also come great challenges. we do know that energy costs i would expect to rise continually over a long period of time. i think we could all expect that food and the command for food will more than double, and with that will come many, many challenges for populations all over the world. the challenges are amist, and it will require business, government, and all involved to be very aggressive in knew innovative ways to address these -- new innovative ways to address

these challenges m i think business does play a very, very critical role. business plays a responsibility, and business should not view this as a conflict of serving shareholders because in my mind there's not a debate or a conflict here of doing what's right for business and also doing what's right for the world in the future. the two will be necessarily going hand in hand. i'd like to start a few things specific about wail-mart -- wal-mart. i think there's a number of areas to spend time on. for example, last week, we had an announcement in washington, d.c. with first lady michelle obama related to health and wellness and specifically around food, and what we see in the united states, but in mature markets and emerging markets tremendous opportunity to create healthier food for our customers

and healthier foods that actually can cost less. customers should not have to decide to create their own decision about buying healthy food versus what they can afford, and affordability of good healthy food is a very important initiative that we're working on. there's a great deal of waste in the food supply chain, food from the farm that never makes it to the table. this is true in markets around the world, and we see that there's tremendous opportunity to reduce waste, create efficiency, and to have healthy food for families all over the world, and there are multiple approaches to doing this, and there should not have to be a conflict and should be able to help address the particular food issue. i'd say that at wal-mart, business leaders like myself and others inside of wal-mart have really taken stainability very, very seriously.

it's now a critical part of our dna, and i'd say it's not just senior leaders. my desire, and i think we're on this journey, is that every associate worldwide would be engaged in participating in creating a more sustainable business and environment. we have over 2 million associates that work for our company all around the world in ma sure and emerging markets. we want every one of our associates to be engaged in this. real estate executive involved in stores should be very conscious of stainability in sighting stores, designing more energy efficiency. our merchandising group works with our suppliers to create sustainable products and eliminate packaging and reduce the waste involved. our store operations, we have over 8,000 store locations, and in every location, we'd like our local management to be involved in recycling and involved in

creating zero waste and create the most official deliverly for products for their customer with energy efficiency. it should be a part of our dna. the reason it's critical is because i think our customers are going to now have an expectation, a demand. one of the things that technology brings is more transparency. i believe in the future, customers will want to know what's the stainability of every product, and we are working with others in the industry what we call a stainability product index that a customer can have available and understand the footprint and knowledge about the background of any product that they purchase and technology will enable that, but it will create even more responsibility for business and i applaud that, and i'd say it's welcome, and it will be a big, big step in development, and business will play a critical role in the future. >> thank you very much.

[applause] >> i visited mexico city ten years ago, and it was incredibly dirty. i came back last year and it was amazingly improved. i know the mission and efforts your country put into this. address this question from mexico's point of view. >> let me start with mexico city in particularment one thing you must do in cities like that with 22 million people living there is establish a set of public policies in order to improve the condition of the air which probably is the concern, and that means to improve the massive transportation systems, change the quality of the gasoline, subsidies to fields, and to establish another kind of intent, for instance, new construction in housing.

however, let me current address my point of view, the issue about sustainable development. the question is how to improve the conditions of the people, how to expand freedom and capacities of the human being without jeopardizing freedom and capacity of the future generations. as the president was saying, the key is to combine economy growth, equality, and, of course, protection, preservation, and restoration of the natural resources and natural capital. the problem is that we spent decades discussing some kind of economic growth and preservations of the natural capital, but now we need to find out how to break this gridlock or how to understand that there is a dilemma, and it is possible to solve this economic growth

and at the same time improve the equality of the societies. it is possible to promote economic growth and at the same time to preserve the nature and environmentally friendly public policies, and the key issue is what are those measures, those public policies that enrich these goals at the same time? my opinion would have tremendous opportunity to do that through all those public policies or measures that meet those measures and grow at the same time. first, we have to promote all those measures that are able to improve energy efficiency. that implies protection of environment, but also profits for business, better income for consumers, so any kind of

measure in enterprise that is able to improve the efficiency of the company, for instance, if you are able to produce the same or even more amount of products, using led energy, you will save money and you will protect the planet. the same with transportation. you can improve the quality and the quantity of massive transportation system in a city with improved quality of people, but also you protect environment. the other sources to use renewable energy sources which is another amazing business opportunity because it is possible to make profits in that seat or to make profits in a company promoting renewable sources of energy, so in my opinion we can split this public policy or measures like in two or three parts, but one is there

are a lot of public policies and measures that actually they have positiveness. long term implies good business. for instance, substitution of appliances of all air-conditioning equipment for a new one that implies saving money for consumers and saving carbon emissions for society. the other is establishing renewable sources of energy in all those countries that have tremendous potential in that. for instance, in the case of mexico we probably have one of the fifth places in order to produce wind energy, so we have tremendous potential, and we can save a lot of money, and we can save a lot of emissions as well. there are other measures that probably have not met positive

net present and value, but very important that those are very important measures in order to save money and save emissions as well. for instance, all the mechanisms established in the instruments that we improved last december, according to that it is possible to establish all the public policies in order to promote the preservations of rain forests and woods, and as with this, for instance, mexico, we establish a system of payment for environmental services. today, we are paying to the poorest rural communities in mexico. we are paying real income transfer under the condition that they could preserve the rain forests and even in connection with -- increase the natural resources they have.

in this way, we are preserving nature, and at the same time improving the quality of the people and fighting poverty. let me tell you, even in several cases it is not only a measure of equality. it is not only an environmental measure. it's also a profitable business because if you promote, for instance, plantations in all those places, it is possible to get very good profits and at the same time to preserve in that world of resources and at the same time improve the income of the poorest people. in brief, we must implement an environmental level public policies in other words to combine these goals, economic growth, equality, and preservation of nature, and at the international field, today, we have new instrument which is the new improvement of the multilateral arena after cankun agreement in order to establish

health for the poorest countries, transfer technology and building capacity for them, to establish the climate green forum which is new, and possible to mobilize a lot of resources for those purposes. we establish and approved to improve forestry and established real commitments in terms of mitigation only to pause and say this under careful protocol, we got commitment, more or less 5% of reductions of emissions coming only with the exception of the united states, and under the copen hagueen agreement, we have reduced emissions by 14% coming from developed and developing countries including the united states and china, so there is a hope. there is a very bold first step in the right direction, but we

need public policies in the countries. we need more political rhythm in the international community. >> thank you very much. [applause] >> bill, you got a chance to look at this from the business side and the foundation side with your work in the field. give us your perspective. >> well, i think the word stainability can mislead us. you know, there's nothing that is staying the same. the world population is going to grow, and it's going to grow around a factor of 1.5. now, if we do the right things for children's health, if we get hvac teams out there, take care of babies in the first 30 days, we can have a huge impact on what the population is, about 10%, and any way you measure that whether it's the local areas where if you don't reduce the population growth, you won't have enough land to grow the

food, have stability, the environment won't be maintained, or if you just globally look at the avoided say co2 2100, those are far more economic than any other thing you could do having to do with the energy system or anything else. >> investment is family planning? >> reproductive health, taking care of babies, and relatively other costs are quite small. i think that's a part that's very exciting because it serves so many purposes, the health of those children, the local conditions as well as the environment in the long run. the -- we want people to use more services. we don't want to sustain the current situation where the bottom two billion use very little energy. that is just the wrong thing,

and so there's going to be more energy use. every year for the next 100 years, more energy will get used, and so what you have to do is look at the ininnovation that says the unit of damage or problem per amount of energy use, that's where you have to have mind blowing breakthrough. that energy factor, and even if you play with it by 20%, we're talking about a need of about a 90% reduction in the current impact then. you're just never going to get by thinking about the amount of energy. somebody looks at a product and says, oh, it uses this much energy. the environmental footprint of that thing better be less in the future because of the innovation. now, innovation gets underfunded. you can't capture the benefits of innovation, and so it's interesting as people get together to talk about these challenges, the amount they talk about the population reduction issues and the amount they talk

about facilitating innovation is low. those are the two dominant factors determining do we need to get to this thing in time. take innovation and food, food for the poorest, it's one of the most underfunded things. green was funded by world banks and a green revolution two has a chance that can double productivity per acre. that's another one of these things where you don't put using land you don't use, help the local farmers, improve nutrition so pretty dramatic improvement to innovation. i think we can be optimistic because if you had this panel say in 1800, you know, and said, let's, you know, people are living 32 years on average, let's sustain 24. if you this this panel in 1970 when the people thought the

population growth was out of control. why is it we're looking at today so much brighter if you look for sustain the than any other time previously? it is because of innovation, and yet we're not maximizing the cooperation, the investment, the tracking of the innovations, particularly those that would help the poorest which came in health and agriculture things. i think we are slightly improving that. i think it is getting on the agenda of people who think about the food or climate issues, but i'm only optimistic because of that one element, not because we'll hold people back in terms of consumption or avoid all population growth. we can minimize that, but it's the impact per person where the opportunity is. >> you know, your point, bill, reminds me that i had several side conversation with a friend

just walking in here, and with other business leaders that certainly one of the key engines of innovation is the american economy, and we have so failed in the energy realm to put in place a clear framework to foster and nurture clean tech innovation. my question to you and all the panelists is this. you know, this has been a bad year for climate as far as the united states is concerned. iclimate change became a four-letter word in politics this year. it was not part of the debate. one party openly mocked it. the other party ran away with it. with the energy climate team, and they've been in a witness protection program basically for the last 15 months. can we get where we need to go at the speed, scope, and scale

we need, and please don't be polite here, without a different approach on this issue by the united states of america? it is very possible given politics we will not have a clean energy bill by the year 2013 at the earliest. who would like to respond to that? please, secretary general. >> why we are discussing very important subject of stainability development. i think this sustainable growth should start from climate change. i said jokingly that this is wef, this is not the world economy forum, but water, energy, and the food. climate changes should be the starting point, entry point of all sustainability growth. without that, i don't think we

will be able to meet all these important pillars. in fact, during last four or five years, international communities while we have been enough frustrated, but at the same time, we have made the progress as we have seen starting and last year and we made good progress. this is reduction of the emissions from the forest and forest degradations. the countries have made it their commitment and how to keep this red cross sustainable by providing some alternate associates. people have to depend life by cutting wood. we have to have certain moratorium. i think that was a good

progress. we made good progress in climate the final thing. as you know, i have established the last year a high level of advisers on climate change of financing led by prime minister of ethiopia. they have provided good, workable recommendations. hundred billion dollars by the year 2020 by the developing countries so that they can conduct and mitigate these very serious consequences, and then we have this climate green forum which has been very passionately initiated. we have funded it now, and we have to make it operational. there's a good agreement in

technology transport in developing countries. these developing countries do not have any capacity. it is not their own making. it's making of the industry to realize the country is starting from the united states and european countries, they have to provide these technology separate so that they can again adapt and mitigate challenges. all these are five areas we have made progress. as we are discussing at this time on sustainable development, there is some questions raised. are we not tackling the climate change? no, we are tackling it. we are tackling it with prior issues that make sustainable growth possible. that is one thing, and i fully agree with what president halonen said.

women empowerment is very much important. i want to add this one. wef, women. when women are empowered, you have greater productivity. the empowerment of women has been largely wasted and ignored. that is why nations have established from january of this year, we have established very ambitious major agencies dealing with the women issues. now, women empowerment means everywhere, in health, education area. when mothers have care and attention on their children, you have educating children and help your chirp. this is a foundation. therefore, let us look at all comprehensive way, broader way, more comprehensive way starting

from climate charge, water, women, energy, and food. now we are suffering from these rising food prices. energy, and many private companies they have invested money on renewable energy, alternative energy sources, and this is encouraging. most countries now trying to develop solar energy, wind energy. this is encouraging, but we have to do more on all comprehensive, but climate change is the entry point. thank you. >> it certainly is the entry point, but i want to go back to my question. would it be -- would we be entering that point at the speed, scope, and scale we need if the united states were more of a leader and not a lagger on this issue? >> we need not to be modest or

-- if we want to be a little bit critical, i think this climate change campaign should be led, must be led by developed countries. this hasn't started from industrial revolution. largely united states and european countries there had to be mobile morally, political responsible. united states has the largest economy and superpower, the superpower of the world should take political leadership and also investing in energy and other areas. president obama has taken this issue very seriously, but i know some difficulties in american domestic politics, but this congressional to the obvious

solution. that should be key and also followed by china, india, russia, major emerging economies. it's not something which you need to wait for others to do something. you have to do your own homework. people waiting, other people should do. there is a certain, you know, psychology games between the united states and european countries and china, india. they ask, you should do it. i think all are on the table. we know each other's positions. i think they should be responsible for the humanity. we have responsibility to keep this world sustainable. about ten days ago i was in

united arab emerites attending the world future energy summit. there i learned powerful wording. what they said is that we have not inherited this planet earth from our ancestors. we have just borrowed temporarily this planet from our younger generations, and we have political moral responsibility to return this planet to our following generations in a more sustainable, hospitable environment. >> thank you. president halonen? >> this is clearly said. after the copenhagen summit when we were disappointed, i said,

come on, friends, with the previous year administration in government, we couldn't agree that better it is or not. now we agreed in that. now we have had some difficulties to see that which kind of steps we can get taken. i agree that everybody also wants there could be the good girl in the class doing the homework and the others could continue their life as they used to do it. the fact is that we have not another planet. we have only this one, and it's not enough if e u.s. and europe would do their work. i don't see any reason why the south should repeat our mistakes because it's not effective and it's not ecological, and it's not even profit l in the future, -- profitable, so you can jump over that, and you will be better, so in that way i think i have been

also very happy that those countries which have a lot of resources in energy, gas, and oil, and so, of course, it's a benefit for them, but they have been more and more now investing in the new realms of energy and renewable energy resources, and i fully also agree efficiency in energy is one of those that if we can be better there so we do all that's good because it costs less, less carbon, and as long as we need it, it's effective. more and more, and i would say i'm pretty optimistic about what's coming to the balance on the economic and ecological side. what i'm more worried is that all these brush fires we have in economics that there's no time to make radical change.

we know that for instance international financial architects have had all of these difficulties. i think professors and many others said many, many years ago that we have this weaknesses, but before we are facing and we are not ready to change happy. this is human. it happies with everybody individual welfare also. we should be better, you do it. some do it, but in the day when you face what has happened, when you have not done this, you are beginning to make all changes needed it and it's concerning. i'm happy for this discussion so far because we have taken already the individual level, the consumer's power, we have taken enterprises. we have taken also the national, the importance of national states because we have to push

them to do everything at the local and national level and also to be more open in the global discussion, so why not? >> thank you. i'm going to open to the floor to questions. we have a lot of people here, and i know they are burning with questions. if you stand up, identify yourself. we have a microphone coming, and direct your question. here in the first row, the lady in red. >> i'm from korea, the chairperson of holdings. two solutions as to action. why take on initiatives for women and young generations? i come from -- >> i didn't get that. >> initiative from u.s. opening up for women and young generation because they have power to share the world and it's unbelievable.

why don't u.n. gives tools and the window to educate these consumers and also let them come to the opinion on how to follow. as a consumer, let them determine, and women care for the future generation. therefore, if we can find solutions, is there initiative for the u.n. for the individual level. let's create a human web to create a million or even 10,000 people every day in a basis which we can really talk about the climate or these issues through shaping the future course. that's what i want to suggest. another suggestion to bill gates. stainability of economy cannot be sustained without peace. look at my home country, i think

truthful -- [inaudible] instead of just going over six party talks, why don't it say peace village, north and south and maybe your foundation can provide education for young kids from north and south come together, learn something. that could be wonderfully needed, and also to create leaders, i want to suggest common peace treaty. that's what we need. >> thank you very much. another question? right here. >> i'm work for cop consumption in brazil. ban ki-moon mentioned the need

for lifestyle change. right now, 16% of humanity consumes 78% of the resources. if that last was driven by the developed countries is given to the whole world, no way we are going to solve if this inability problem, so i like to know from you and the panel, from mr. friedman, how to go about lifestyle change which will be absolutely necessary. >> that's a good question. president cad -- calderon, if everybody adopts an american size lifestyle, do we have any chance? >> well, no. [laughter] the person is right. we need to change this, the way of life, and actually, we have

tremendous effort in order to reeducate, if i can say that, to all society. i was thinking about former questions about this and the united states doing enough for that and the answer is no again because we need the leadership of the united states on this issue. i know that there lot of troubles now, not only american, but a lot of people are thinking how to recover economy, recover income, improve the conditions for their own economy.

even today may be converse of the united states are trying to move now and say there isn't climate change at all and we need to change that. we need to mobilize public opinion and strain again that first there is increased carbon emissions in the world, there is an increased global average temperature, there is a correlation between carbon emissions and global warming is

provoking serious changes with climate and finally, that there are solutions related with reductions of omissions. but in order to do so, we mobilize a lot of resources and mainly we need to change our style of life, and in order to do so we are doing with the secretary general was saying. it is important the effort and leadership of the developed country and i mustn't say the effort and leadership of the most developed country in the world which is the united states. i'm sure that president obama has realized the problem and understand some that he's facing a new congress and political reality. however, it is not enough to a understand the problem. we need to mobilize that society and congress and of course try to find out what could be the

solution. >> i want you to take this up. even with all the best innovation, dewey and can we read what your people in a way that they would want less? that's not all the necessary. reduction by saying to the yolly in india use one camel every two weeks or taking an attrition level but a typical in northern india and say yeah we have to cut back on mess. there is no doubt more food and more energy is only just as appropriate. sure, you can say that the u.s. could cut back by even three but it's a meaningless number compared to the justice of letting people live and type

that -- have the type of communications and freedom that developed countries have. so fortunately that is in the there a solution or be, going to happen. we want people to live better lifestyles, and all of you have to do is make sure the energy that you are using isn't emitting co2 or causing other problems. let me get some more questions but go ahead quickly. >> we can improve with people but the point is we need to do that in a way to use energy. >> you cannot -- you have to make sure the energy you are using doesn't cause a problem. you do not have a just world by telling those people use less energy than the average european. >> it's not a question we are going to ask these people to use

only one campbell. people need electricity but it is possible to use traditional lamps those houses in order to use energy lamps and that is a practical kind of measure we need to take. >> if we can get a few more questions before we have to close i can't see that far. anybody back there this is an awfully shy audience. peter are you out there? where is my friend, peter? [laughter] -. >> my question is for you as a technology still in a clean energy space is been a disappointing period where we've not had national comprehensive

energy legislation was in the press on carbon or even most sort of basic steps are found providing the kind of technological framework jimmy looted to earlier we have a comical lack of consensus in congress. what is your view, and i heard you say 2013 of your earliest, what is your view on what it's congress to get serious in terms of implementing its technological framework that sends a signal to the market about what this clean energy future should look like in energy efficiency and generation. >> it is a good point. both mike and jim to take it up. i think it is going to be a signal from the market or mother nature. it's going to be a spike in oil prices that goes up to $200 a barrel or we get some from mother nature will call the perfect storm to find the end of the debate about climate change that's so big but not so big that it ends the world so that

we can actually still do something about it, but i want to hear from mike and jim at would a more coherent longer-term framework around as you've been so missing mean? >> first of all, i would say that business shouldn't be sitting back waiting for government. business can be leading in this area, and this past year we set our own aggressive a greenhouse gas reduction of objectives, we may get a part of our dna as i said. we start investing in renewable energy and we can sit back and wait in the debate and wait for government leaders, but i think is responsible business leaders that's not productive. i think the government -- >> what response have you gotten from consumers? >> frankly it in up over time to the inappropriate response from consumers. i think in the short term in

particular in the markets consumers are still wondering great deal of personal pressure to get jobs, economies and so i think right now they've got things under mind about their own family and their own livelihood so it's probably not one that isn't getting a great deal of feedback, but in the long term consumers are going to provide the benefits to take responsible action. i think in the future companies will buy from responsible companies and associates will work to companies that have a purpose, and i think that's how business moves in the future and if we sit back and wait for the government, we will not be taking our responsibility seriously. >> what is your take on this? >> you know, the nexus of these issues is unambiguous. it is a linear relationship between gdp per capita and the number of people in the energy consumption, and that's just --

any way you look at the map is going up four or five next 23 years and so you need a dramatic adjustment here and i just think this is the kind of stuff we are going to have to rethink economic and talk about food and the numbers quoted we make about eight times the food we need to feed the world so this is the market breakdown so somehow we are going to have to -- the time i spent on mass everything comes back to political pressure. you know, and devotee here says give me political pressure, give me political capital, that's what i need. and so, business is going to make money. businesses can make money either through an adopted frame three modified from work or through a crisis of a politician in a perfect set of scenarios. business is business. you know, the question is what

role does this want to play? i just don't want false positivism because any way you the map it is we worse and the problem with innovation is innovation is about creating energy, and it's not about avoiding cartons because you're competing against 200 to $300 billion a year of subsidies to the use of carbon has its negative values and so until you rethink economics and factor the public goods, social capital which you brought up and the natural capital, there is no chance. i just think we have to be radically ambitious and there is an enormous opportunity. business is always going to make money. that's what it's here for. i think this comes down to our intellectual capacities and what

is the role of business in this forum in getting the political capital to the leaders to face and make the changes that everybody who's been a short period of time being briefed knows that the math is tough. >> is their anything you want -- >> just to underline your point that we are talking about dealing with climate change, the global warming, with the world is doing now is not enough. we have to double our efforts, accelerate the process, and i would agree that if a lot congress must take the lead but developing countries must do more as well. based on the principal of the common principal, a responsibility, and if we are talking about the planned change

about avoiding the crisis this is important responding to the question of the lifestyle and innovation and technology and of course correct and sound policies practiced by the, that's my point. >> would you like to follow? >> i think the answer is public policy. you were saying we need to reduce and eliminate the substance and study the policies internationally which is very costly in political terms that we must do that. second is pricing carbon because i'm sure business is business, but if the governments are able to establish the right economic incentive you can make business

according to those economic consensus you need to pay more because your technology, suppose you can switch your own technology to produce more efficient or you are going to use energy be you can use the energy coming from and that we can promote so there are measures in which we can win the necessary growth and the necessary consensus of energy in order to make it more competitive most environmental friendly if i can see that. so it is possible in terms of the public policies and international cooperation to do that. of course it is necessary the energy to grow and it is necessary to the conditions of the people you're going to use the more energy than now but also another way. >> as we draw to a close here i

hope we can come back next year or the year after and secretary-general you will be presiding over a different kind of competition. during the cold war we have a space race who could be a first to put a man on the moon and only two countries could compete and only one could win and it's clear to me right now who can convince the most queen technology so that both men and women can stay here on earth, and i would love to see mexico competing against indonesia and indonesia against brazil and russia, china, everybody trying to win that race we would all be better off and hopefully we will come here and be able to say that actually molecule co2 was affected by what we say and do here. thank you very much. [applause]

healthcare industry leaders recently discussed the financing of health care at a forum at the university of miami. panelists and would health insurers, doctors and hospital with administrators. this was part of the university's annual global business forum. it's moderated by donna shalala,

the president of the university of miami and former secretary of health and human services. this is an hour and 20 minutes. >> good afternoon. and welcome to the signature panel session, insuring the future, the financing of health care. ms. hill as an ally of the university of miami where i received my bachelor's degree in 1975 and my m.d. in 1979, i am particularly delighted to be here today. i am also proud to be here as the chief medical officer of diagnostically worldwide and honored, truly honored that quest is a sponsor of the global business forum. for those of you not familiar, we are and 8 billion-dollar company. we have 43,000 employees, we are connected to 150,000 physicians in the country's doing lab orders. we do 550,000 of laboratory tests every night. we touch 150 million people a

year. so chances are, if we haven't stuck you, we have stuck one of your friends. [laughter] but me talk briefly about diagnostics. you see, for the positions in the room you know you do four things when you see a patient. you do history, a physical, you may order an x-ray and you do a diagnostic test. you see, the diagnostic test contributes to 70 to 80% of every single decision that a physician makes. so although we are responsible for only 3% of the cost to the cost of health care, we probably contribute to 80 if not 70% of all the cost of health care in the country. the question i used to get asked a lot is why is quest health care -- cost felker expense of which the panel will address. as i travel a presidential campaign in 04 and actually as a candidate for lieutenant governor traveling all through the 59 of the 62 counties the question was the same in 04 and 06. why does it cost so much and the

same issue is why does it cost so much today. so just briefly before it to the other intro hundred 25% of the cost of health care is paperwork. one-quarter of 1% of all health care is responsible for 20% of the cost to 80% of the cost of health care is used in the last six months of life. prescription drugs have tripled in the last ten years, it costs $15 for every transaction in health care compared to less than 1 penny in banking. the reimbursement system is based on volume of quality. we have a third-party reimbursement system where the consumer is not responsible for the cost of a technology drives at least 50% of the cost. we have a malpractice system that just doesn't work. we have poor quality by many, many measures. and the obesity at the then it is contributing to a huge number of the cost across the country. so with that, it is my pleasure today to introduce pact, first vice president and chief operating officer of the federal reserve bank of ballan tuck read

in this capacity, pat not only oversees the day-to-day operations and administrative matters of the atlanta fed, but he has a direct hand in the development of banking policies. he's also the retial payment product director for the federal reserve system nationwide. he's a fellow kaine who holds a bachelor's degree in management from the university of miami school of business administration. he's also a trustee of the university of miami and serves on the president's council and the university alumni association board. it's with great pleasure i welcome patrick baron hill the global business forum. [applause] >> thank you so much, john. you are such a key part of the hurricane family. we thank you for your involvement and contributions. certainly today, i would be remiss if i did not recognize you and quest diagnostics for your support of this signature panel and for all that you have

been engaged in through this global business forum. i also want to take this opportunity because it is my only opportunity with the microphone to express my gratitude to deanne for everything she's done and express my best wishes to her and bob as the move on to the next sector of their life. i would say that the luncheon speaker made a reference to my generation and he drew the analogy of a pig and a python, and why why didn't particularly like the view from being that pagen i discovered one of my colleagues said there's three things about being in that generation. that is that during a crisis situation if you are taken as hostage you are generally the first to be released. [laughter] secondly, you can take up bad habits without worrying about them telling you. and finally, and finally and relative to this panel, you would begin to get more out of

the health care system than he have to pay into. last year after many months of shall we say spirited debate, we come of this nation got a jury historic health care reform bill passed. as they say, the devil was in the details, and even this document was some 2,000 pages -- 2,700 pages to be exact has left several unanswered questions. but perhaps the primary unanswered question, one that john e. lewd it to is how can we contain health care costs while providing every american with access to high-quality health care? today's panel brings together the perspectives of physicians, hospitals, finance years and insurers to discuss the overarching issue but is so critical to the future of the

nation. and so let me introduce our distinguished panel. let me start with richard clark. richard has served more than 14 years as president and ceo of healthcare financial management association a professional membership association with more than 35,000 members. he is the past chair of the commission on the accreditation of healthcare management education. among his numerous professional activities, dr. clark serves as a faculty member of the university of miami school of business administration. recently launched the m.b.a. program in the health sector management and policy. a very important program for us. his academic degrees include an m.b.a. and management and finance from the university of miami school of business administration. our second panelist is michael tuffin. he is an accomplished strategist with extensive experience in public policy, healthcare and national politics.

as executive vice president of american health insurance plans whose members provide health care, long-term care and dental and disability benefits to more than 200 million americans, he leads a hip's public affairs strategy which includes communications, advertising, media relations, new media, and grassroots mobilization. he has worked on a wide range of political campaigns on the legislative staff and both the u.s. senate and the house of representatives. i would say that his focus has been on economic and fiscal issues, but more germane to my area in 1996 he was the deputy campaign manager for a successful referendum campaign that enable the miami heat to build the air lines arena and certainly we thank you for that. [applause]

which umbenstock serves as president and chief exceed officer of the hospital association and is the past chair of the board of trustees. prior to assuming his current position, he was executive vice president of providence health and services, which provides an array of health and housing and educational services including 27 hospitals and more than 35 non-acute facilities in communities in the five western states. among the numerous activities that have drawn on his extensive expertise in health care administration, rich has consulted with voluntary hospital governing boards throughout the united states. and cecil wilson, an internist is practiced in central florida for more than 30 years and former navy flight surgeon. he became the 165th president of the american medical association in june of 2010.

as the florida medical association and chair of the board of governors as well as its executive committee. dr. wilson is a member of the board, physician run organization that accredits more than a thousand physicians, office laboratories nationwide. our panel today is moderated by the university's distinguished president, donna shalala, and i think we would all agree she knows a few things about health care, so it's a nice warm welcome to the panelists and donna shalala. [applause] >> thank you very much. thank you. thank you very much, pat. we really appreciate your coming out to do this with us. let me thank john cohen and his loyalty to the university's legendary, and we are just delighted to have him and thank quest for their sponsorship.

i would also like to introduce my senior vice president who is responsible for advancement which is fund raising communications and politics, the advancement is particularly important because it means i don't have to contain costs if he does it the right way. sergio gonzalez. [applause] and you have all met barbara. i'd like you to meet her successor at least temporarily. we still when someone from the private sector is a distinguished career in private banking and whittle's all -- was also one of or sophos lacasa who has joined us today. [applause] >> now every time i get on fox they say to me so, why did the president do anything about cost containment? the real criticism of the clinton and the obama health care plan is they really didn't do any thing about the cost containment. we are going to answer that question today but the simple

answer is it's very hard to do. making up this panel are stakeholders. people who represent significant parts of the health care business. and it is hard to do. i believe that probably twice a week i get an e-mail from someone somewhere in the world who wants an hour with me because they have an idea that saves health care costs, that they want me to talk to the president about, not that i talk to the president every day or even whether he would be interested in a specific suggestion, but everybody has an idea about how to contain cost. but those who say we can't afford health care reform i say that we can't afford not to reform the health care system. and whether they like the specific parts of the bill or not, the gentleman that make up

this panel also believe number one we need health care for everyone in the country, and number two, we need to make it affordable for everyone in this country. but we need to do it in a way in which we cannot weaken the quality of the health care system and make sure everybody that needs access to health care in this country gets high quality health care. today we get an extraordinary chance to be the proverbial fly on the wall to read these panelists from the key health care sectors may disagree somewhat, but we are all going to struggle with the same issue, and all of them have a pivotal role in how we are going to resolve the financing of health care as a nation because over the next decade we are going to need to try some things that contain to cost. and each one of these people, and i know them all, care deeply about the quality of health care

in this country and about our patience. so, i'd like to begin by asking our distinguished panelists to answer a pretty straightforward question. so everybody talks about in the curve. what is the single best idea for the end of the curve in health care? richard? >> welcome that's a very easy question. we will do world peace after that. [laughter] we will be able to solve anything else within one answer. obviously it does have -- it is a very complex question, and if you look at the reform bill and you look at a cost containment element within the reform bill, the single largest cost containment or cost reduction element in the reform bill was the payment cut. that was the single largest element. and so from one perspective you

could say simply cut payments and the system would have to figure it out. obviously there is a lot of danger in that the unintended consequences of making substantial cuts in any component of the system is that first of what kind of shift over to other parts of the system for example of the federal government makes a sycophant cut in medicare, then the pricing mechanisms are such that it starts to shift over to the private side and the private side starts to pick up the slack that the government has cut back on, and so that is what we often refer to as a hidden tax if government pays less than for example should be or expect to be paid for something it is shifted over to the private side and the private side is paying for that which the government should have paid for and might have paid for. the argument is whether the government and the medicaid program does pay a fair amount of money because the belief is

that if you look at the level of reimbursement to the cost of providing services for a simple medicaid patients and especially medicaid patients, you would find that the payment is below the cost of providing the service. so at least in the current structure of organizations, it's very difficult for us not to have a situation where there is in fact a shifting. you simply deal with it by making payment cuts. what makes more sense to change the incentives of the payment system towards the care delivery model that we all understand more appropriate and hard to get to because we are very fragmented. the payment system creates situations where certain components of the system are rewarded for doing more volume and other components of the system are rewarded for doing other kinds of things. there is a real question about quality, so my answer to the

question is we need to be able to focus on the payment system as a primary vehicle, maybe primary lever to start to move us from a fragmented system to a system that is much more integrated, a system that has the incentives for aligned, etc.. so there's a simple answer. i would say the payment system is probably the lever that is the most likely to have an impact. there's a series of things that has to happen as you make changes to the opinions system simply because the delivery system such as the delivery system is organized in a way that would facilitate accountability for the care of populations that would over time we think at least slow down the rate of growth and in fact been the cost curve. >> michael? >> thank you madame secretary and for having me. i guess before i touch on perhaps the substantive side one thing that is overlooked is a

real education effort to make sure the american people understand mistakes. people are acutely aware of the problems of the high cost of health care in their own lives. if the work for a small employer, if there's someone falling through the cracks perhaps working class take to much to be eligible for medicaid but don't have the kind of job offers coverage and certainly not in the position to afford it on their own, so lots of people are acutely aware of the affordability issue when it comes to their own personal circumstances, but what i think the american public doesn't really have a grasp on at all is people don't think systemically, they think of their own circumstances, their own family, their own employment situation and the trajectory in terms of health care cost and what it's going to mean for the future of the country. we are on a trajectory and

pretty soon the vote one-fifth of our economy to health care, and not laughter that one out of $4 we spend of economic activity in the country will be devoted to health care, and that would be -- and that's not all bad because if we are consuming health care, people are choosing to pursue life enhancing and lifesaving medical care. but we are not getting enough for what we spend, and we are on a path that is not sustainable, and if that continues unabated on the public side of the ledger, other important national priorities, defense, homeland security, the environment, education are just going to be swamped. there is just not enough dollars to go around and we are operating in an environment in which we already have a trillion dollar structural budget deficit. so we think we really have to --

stakeholders, elected officials have to get to work to educate people about what is at stake so that a substantive conversation can proceed and compare itself to make changes, to make tough choices. we had a one year debate on health care reform, which on the one hand was terrific and engaged the american people across the political spectrum. more people contacted their member of congress about this piece of legislation and on any matter that has ever been before congress in american history. that is just astounding. we think about the war and recession and all the country has been through. so that is obviously a positive but there is nonsense around the def panels and demonization of the private industry and health

care and a lot of substance along the way so and education efforts that reaches people and on the substantive side health care spending is the cost of health care times the utilization of health care and we have to look at the whole equation. we have much of what richard said, we've got to find ways to eat with people to make the safest decisions, the highest quality decisions and yes, the most cost-effective decisions. right now in health care so much of our decision making is made on the word of mouth basis. we take a particular medication because we saw someone -- we saw a nice ad or we visit a facility because of its reputation, and that reputation may be exactly in line with that performance, and that drug maybe the best

drug for that particular patient but we are not making those decisions based on data and based on objectives information and in the economy to make people better decisions and cost-effective decisions. >> thank you madam 63. pleasure to be here. i'm going to build on the parts of what my colleagues have already touched on. my direct answer would be the same as which is change the incentive. but i would supplement that by saying to change the incentive for all, for every one. there's a very simple answer who pays for health care. we do. how do you want to pay for it, how do we want to pay for it? privately, publicly or philanthropic week. there is not a fourth option, so we have to figure out how we all contribute to this change. the position during reform, part of our reform from work was the call for coverage for all and to

be explicit to say paid for by all because we can't continue to think that somehow or another somebody else is going to pay for some portion of the care that we consume. when i say all, i mean providers and suppliers, employers and purchasers, consumers directly, all of us. there is a saying that cannot at least i heard it for the first time during the reform debate that one person's waste is another person's revenue stream. we have to figure it out and agree upon what is essential, and the incentives don't naturally drive us to that so if you look at the same side of the coin, utilization on the one hand, and consumption on the other, i think there are some answers that we just can't not address or certainly some questions, and i think some fairly obvious answers that we

are willing to. on the utilization side, the aha is very much in agreement that we have to have incentives that drive utilization in a different direction. a volume oriented set of incentives isn't here for the long run. that's going to change someday. if we knew during the reform debate to what model we should change i think it would have been put forth and we would have debated it. but what you see in the bill has as was mentioned before a variety of approaches to try to see which works. so whether it is bundled payments or whether it is to tell you based purchasing or whether it is the medical home or an accountable care organization or whether it is a negative incentive of penalties around the admissions for example all of those are attempts to say we've got to try some new and different things here or we are not going to

drive down the utilization of services. so i think for the providers, both providers and practitioners, that's a major challenge for us to deliver. each of those done in the right way and implemented in a way that keeps the system strong getting from here to there. the second site is consumption. i often -- when people like the secretary say, when people see how you drive down cost, or my goodness, my premiums are going crazy, i often use a little attempted humor and say to them, you know, i assume you have three forms of insurance. one is homeowners and won his wife and one is health. last year to pay premiums and at the end of the year when you hadn't made a claim because your house burned down did you feel ripped off? most people say no i felt protected along the way and greatly i didn't have to use it.

i say now you know where i'm going with the second. dupage life insurance premiums all year. [laughter] and i don't think he made a claim. [laughter] and they say don't give it to me. i say yeah right. it's now december 20 if, we are at a holiday party. how many dollars you have left in your flexible savings account and how will you spend them before the end of the year because you don't want to leave any on the table. have you ever thought about the difference in health insurance incentives from a consumer point of view, veazey, any other form of insurance? i would argue that its prepaid health care in the minds of most of us. if we are fortunate enough to have that. we have to change the mentality to one that says i'm glad i got to the end of the year and i didn't have to make a major claim a and i was happy to pay the premium when i didn't need it. that's really insurance. last time on the consumption side, and the last comment is we her some great things today at

lunch about investment opportunities, business opportunities in health care. couldn't agree more. think it's a wonderful sector on into the future, but we have to make some changes and some trade-offs or changes in measures of success. for a simple, this weekend's "washington post" had an article in the business section about health care property olden reach, real-estate investment trust. and i was struck by the average annual return over the last decade of 19.9%. and one company that was cited as having 31.2 annualized returns over ten years. think about health care from an investment point of view and retirement point of view back to the same cocktail party. how many of us have an account on health care stocks in our 401k? and weld will be the impact on that if this isn't done right? the conclusion over breakfast

sunday morning for me was we not only want healthcare that protect us and protect cells from cost in our retirement, but to some extent we also want health care investments to fund our return. you can't have it both ways. the changes to come in the sectors. we tend to focus on the pay sector and we tend to focus on the government, this will change just as soon as we as voters and consumers are also ready to change. >> thank you so much and for the opportunity to be here on behalf of the american medical association and the nation we represent. let me just emphasize and echo the point the president made. we care about the nation and the position that wasn't without

controversy a of and we felt was responsible. we feel this legislation does so much to help this country that we could not walk away from it as what we would do is to be engaged and to improve on it has things need to be getting rid of and that is the mode in which we were and which we are to be the answer to the question about the cost and the curve that i agree with everything said so far the other answer is like the answer we gave people during the health system reform debate. people would say why don't you just tackle insurance or just tackle medicare? do one thing at a time and the point we made not unique to us is this system is so complicated and so interconnected that you can't do one single thing at a time, and let me just suggest that that is true for the cost of health care.

the costs do not have the luxury of just taking one thing that will make a difference. i will end this suggesting one thing of the top of the list. if we ignore things at the peril of not being effective, for example, if we just decide the way to save costs to cut people and programs, we would do those of us on the panel would engage in the battle of the carcass and in the and some will lose and some will win and the net result wouldn't be enough savings to make a difference in the country, and you will continue those. so we do need to do things not in the same way but we need to do things in a different way, and the ama has looked at the categories that we think make sense. one estimate the delivery of care more efficient and among those we would include all of the alternative delivery systems and the accountable care

organizations. the other is to get rid of cost that doesn't contribute to patient care. some claims in the insurance companies, the defense and the cost of the defensive medicine would be an example related to that and then another is to promote value based decision making at all levels and i will mention one related to that as mentioned today and that is the need for the comparative effectiveness research so we can no not just evidence based matters and what works but we can also the comparative effectiveness what works best and we think that's critical, but the one that i would put the first of the list of what we call the burden of disease. 75% of the disease, the cost of health care in this country is related to chronic disease. heart disease, lung disease, lung cancer, a diabetes, pretty much preventable, so unless we

tackle those problems i would suggest we are to a lack of effectiveness, just to take one obesity onset type ii diabetes. $140 billion a year. that is about an expenditure of about 2.4 trillion, just that one disease to a disease i would suggest in my practice of 15 or 20 years ago wasn't a big part of a landscaped, so we have to tackle those kind of measures. one by educating physicians about the best way to motivate the patient to be involved. another is how we motivate the patient to understand the importance of that and we have had some sessions today that are related to that and then there's of the national campaign for this country which focuses on the importance of the health behaviors and things we can do. as it was planted on the earlier panel today we have made remarkable strides in the area of cigarette smoking in this

country for such a long time and i think the lesson is if you are looking in health system reform for a solution as effective as it is it's going to do it tomorrow, then that is not clear to happen. this is going to be a path we will be engaged in over the coming years for the decades to make a difference. >> thank you very much. very thoughtful all of these remarks. jim forbes said today health care costs of actually slowed down. we are down to 4% to he suggested that is because we have shifted the cost on to the employees for the most part. i pointed out to him that there is less evidence of that damn of job ownership. during the times in our history and which we have debated health care reform, the costs have actually slowed down. so if you look at the chart from mix in -- nixon to carter to clinton to obama for the couple

of years that we have been engaged in the health care debate, health care costs have actually slowed down in the period that maybe we should just be debating health care reform for the purpose of pain and stop trying to figure out the cuts. all of you have given a list of things that we can do, and i would like to go to the kind of system change richard suggested. you suggested payment reform, but what you're talking about is how we organize the panic of health care, and that means moving away from the fee-for-service system that we are all very familiar with. i always thought people were pretty thoughtful about that, that it's harder to do than it seems because we don't have consensus reached about whether there should be the bumbled payment for hospitals. we will hear from the

specialists if we start to squeeze down on the drug costs for instance that the cancer doctors can diagnose because their cost shifting to cover their other costs so it becomes more complicated to do that. have you seen any models that you can suggest? could you talk a little about what you what specifically do to move the fee-for-service and i assume we are talking about medicare because the fact is the rest of the health system follows the medicare division. i sit on the board of a united healthcare for a long time one of the things that shocked me is how much they watched the decisions of medicare and how much they dictated and drove with the private sector did in their own insurance systems. >> to a start with you, rich, and then maybe go to steve and move down. >> i'm often reminded of a metaphor that says we are all

good actors in a bad place and if the script had been rewritten our rules change some and how we play that role in this new script to read the areas where promising things are done in and around health care is the example of brandt james person who is meeting the quality and innovation center. it is a non-profit system that is in the rocky mountain western comes love of the rocky mountains utah, idaho and a variety of other states and group practices and health plans has all the components, many components of the delivery system. and what they are doing is they are understanding the payment system has to change, so they are starting and in fact they are actually pretty far along in changing the way in which the delivery system is going to respond to the better incentive and the better incentive being that the payment is much more

aimed towards paying for all comes or protect the care of the population as opposed to simply the episodic coverage where you get paid for each volume of work that's been done. in the example that brandt often uses the example in obstetrics in the way in which the exchange to the approach to obstetrics with a sycophant plea reduced cesarean sections for the delivery simply by going through the care protocols and training programs with their physicians. the first time they start doing that, the chief financial officer by the name of burt who i know very well told me it cost $100 million the first time they started working this through simply because the payment system penalized them for doing it, but they felt was the right thing to do so they are continuing to move down that road. and i think that there's good examples because they are using comparative effectiveness research. brandt is a scientist and is very focused on outcomes,

measures and monitoring performance, using the tracks and kind of shifting the way the pattern works and so that is a great example. another that is used is by singer with they're proving care. they have a system of again where it will incorporate a series of services within the party back for example and a bundle those services and a single payment and warranty that they will do the services within the cost and they will take care of any issue that might come up within the scope that the defined. so they're moving toward a bundle payment with a warranty that encompasses hospital and physicians, etc.. those are models that i think our organizations reaching out before the payment system really changes to get at this idea of moderating and eliminating the practice which often times as

identified in the cost escalation we have. >> that suggests we have to be part of larger organizations, and is the era of the individual physician or small group practice over dow's we move into this discussion? >> when i first got of the navy and went into medicine they were already talking about dinosaurs and the was several decades ago. but let me just talk up the fragmenting care. the payment system does provide for fragmented care and increase in the as medicine has become more complex, we know and can now talk about things that coordinate care. you can't do that under the present payment system. just to take the federal government payment system for medicare, for example, the part d which is paid separate from

part a which is hospitals, and some savings the physicians meek by keeping the patience of the hospital actually increase the volume of care they give and they are penalized for that and the savings from that, so we need to get rid of those. let me just on an aside on one of my semi pet peeves, and that has to do with the issue of the fee-for-service. i think if we use that as a metaphor for the fragmented system, adding it is hard to say that. but i would suggest to you paying people for how hard they work and how much they do, it is an american accountable way that you three ward four working hard and i suggest honest honorable people can do that in a way that is honest and honorable. clearly the option for abuse if you are going to use that system you do more, you order more. on the other hand, if you -- people can work very well in a

salary position, honorable and decent and providing a dollar value but if you're going to use that you get paid regardless of how much or how little you work, and so that sort of takes me to the next point. we had a white house briefing for the team and brought in people from around the country some of whom represent these integrated groups and who are doing what we think and accountable care organization ought to do, and to the question should physicians be paid fee-for-service of salary it was a mixture so that wasn't the critical thing. the critical thing is that you have a group of physicians who are working together and that is maybe we will talk more about the accountable care organizations, but they take responsibility for the outcome of care throughout the disease problem and that is the sort of

change now and we have got to go down that road and see if it works. now we know in the 90's the tax payers and hmos will be the same thing to consult it but we are going to try to make it work and i think that we are going to have to go in that direction. just a final point to the demographics of physicians in this country. 70% of those in private practice or in groups of nine or less, and over half of them in groups of three or less so you've got to figure out a way for those physicians to be able to work together, and i've been meeting with the chair of the federal trade commission and inspector general and the department of justice to say that we need to have some changes in the rule related to antitrust and fraud which will protect physicians to coordinate care among themselves what we call clinical integration so they can share information about quality, they can share some of the expenses related to the electronic of

record and can actually even negotiate so we are going to need a new structure that allows that to happen and we all think not only that should have been but it probably will happen. >> michael, you represent an industry, the insurance industry at stake in flat of managed care every time someone is turned down when they go to get a certain kind of operation or something else. what my employees say to me, you're the insurance company, we are self insured, they don't realize -- laughter, we have an insurance company that manages care. they say you should fire them because they will not cover this. mike response to them is quite honest that we made that decision, not the insurance company. yet the insurance companies have taken the flak for decisions employe years of essentially made because when we are looking for an insurance for someone to manage our work here we decide how much coverage we are going to have and how much cost shared there is going to be in the

system. so how do you navigate that? and as you are talking to your constituency, how are they thinking about the cost containment? because they have some real complaints about their ability to negotiate in certain markets and their own challenges. >> you're absolutely right about -- >> i may be the only one in america that admits we make those decisions on the insurance company. [laughter] >> tens of millions of americans get insurance that way through an employer who sells funds and they work with an insurance company, a health plan to administer the benefits and yet, when there is a case of denial it's the insurance company that takes the flak and that is in some high-profile cases that get national attention. frankly, when those situations arise, the health plan is not going to throw its employ your customer under the bus, and it's a kind of fact for life people don't realize and 60 come 70 million people in america get

their health coverage that we. through an employer who does sell funds and makes the determination about what is covered. and i think -- rich was kind of the looting to this in his opening comments i believe, and i personally have probably said to be cassatt and more health care focused groups than any person in america the past couple of years as health care reform was proceeding, and you watch these focus groups and it's hard to the escape the conclusion that what people want is unlimited access to care and they want someone else to pay for it. and that's natural. we are human. we all want that. and thus, when there is a situation where there is a coverage determination that the patient doesn't like, it's a very difficult circumstance, and there are no easy answers. i think we need a lot better education on the front end, and it's also incumbent on consumers

and workers to perhaps do a little more to understand what is covered in the plan. a lot of people assume when they get insurance cards this means anything i might possibly consume in the health care system is covered, and obviously that's not always the case. .. >> to work with these patients

to, for example, encourage them to adhere to their medication regime. you know, so much -- free admissions get a lot of attention. a the problem with three admissions is the patient leaves the hospital, really isn't an opposition or perhaps not have the education to follow their discharge instructions or to adhere to their medication. for a lot of the population, again, the disadvantaged, stressed population, they may have five or six chronic conditions. maybe on eight or ten medications and seeing three or four specialists. so health plans are stepping in and working with hospitals and doctors to try to coordinate that care and assist those patients. we are seeing returns on the cost side and in terms of patient health. and also, medicare advantage which is a private medicare part c. cecil mentioned a and b. medicare part c is a controversial program.

payments are being cut due to health care reform, but there is increasing evidence coming on line that medicare advantage plans are doing a better job of working with hospitals to prevent the admissions, preventable remissions, the fee-for-service medicare program is equipped for that. and, so, those are examples where you are both helping people stay healthy, stay out of the hospital, stay on the medications which ultimately yields benefits. >> i want to put you on the spot a little bit about saving money. we have all of these -- lots of people from the industry that make money out of the health care system as it is currently organized, and i always wondered, other than some public health things like washing hands and clean-air, actually, reducing some medical errors and

vaccines, can you think of a technological breakthrough that we are using now and our hospital or any kind of scientific breakthrough, new drugs or anything else that actually saves money? this seems to be that health care is the one area where we come up with something that costs us more money in the long run. >> at think you're right. >> a different industry than other industries. >> well, bigger than a couple of things. one is certainly with each advancement comes almost a new demand. that is for the latest in a racist. we have not amortized the last investment and a moving onto a new investment. the compound the problem. so, that is one issue. i think that there are some incredible breakthrough is going on. what we are finding out is that they are really on the low-tech. not on the highest. very low-tech, very hard to get

compliance. >> we actually have a new monitoring system to real or his carrying it. if they walk in and don't wash their hands, it tells them to wash their hands so that we don't have to -- the port nurses don't have to tell the doctors. >> they tell you if you have come close. >> right. so they come out. but it is promising. another evidence of low-tech, frankly, is the checklist. the safety and quality checklist approach was mentioned this morning. i believe it was by the secretary around the michigan experience. associated infection. we have partnered to take that michigan experience national. forty-six state associations now and hope to have every hospital in the country eventually using this. you can ask the question why didn't they all use it yesterday just as secretary kathleen

sebelius did. at think it is a matter of so many dawn things in a priority in box, so to speak, that we have just got to find a way to get focused on those things that are for sure going to work and work with less cost investment. the next thing besides infections that we hope to take to the same scale is the surgical safety checklist that dr. bill on the is so well-known for and has shown such incredible results. now, i'm not going touch tell tell that school, but within our family we have of budding anesthesiologist. i say, well, why doesn't this just happen every time? she says well, the next time and first time you will understand. it is not the culture, not the way we have done it before. we are pretty darn sure that we do it right every time. why would we have to stop and work our way through a checklist? that is all practitioners in the equation, not pointing fingers at anybody.

now, again, i imagine all of us on this panel fly a lot. and the take off announcement was, you know, we have this check list and have used it for years. we are running a little late and we think we won't do it today. most of us would ask to get off the plane. why? it has got to be culture. some of the great advances that we are coming to is because we are getting that knowledge, we have gotten the data. now we are getting people's attention and moving forward. >> does it help if medicare tells you you have to do it? is that an incentive for doing it? >> it is not a happy day. you know, let's look at a real-life example. reporting on quality indicators. we are in favor of that kind of transparency. we don't have a lot of agreement on indicators.

five, six, seven, eight years ago. now we have measures. what happened was medicare did say you won't get a full annual update if you don't. so now you get paid for reporting in order to stay home. everybody with enough cases reports. it's nice to think you don't have to get there, but if you know something is working, that eventually you have to look at all the positive bandings. >> i would like to get to the audience for questions. have a couple of microphones. i don't think anyone. i don't want to move this up to the back. okay. you are telling us. okay. identify yourself and i'll ask one or two of you to volunteer to answer the question. okay. >> hi. dave hopkins with pediatrics, international medical group. a degree of the largest medicaid provider in florida and the

largest for physician services medicaid provider in the united states. so, part of the reform is to increase medicaid. we will see more and more medicate folks. as you know, medicaid pays very low rates. at the florida is one of the lowest paying states in the nation for physicians for medicaid. more and more medicate vote for all providers, and those are low rates, maybe six years 70 percent of medicare. medicare is getting gatt. it's getting more cautious. the health of the private health insurance folks. more and more disparity in payment with panels on payment. more and more of a mass with really high rates, really low rates. isn't it just going to be a road toward some kind of national insurance, national payment plan? >> point out that florida intends to give sovereign immunity to doctors to treat medicaid patients in the state and to the extent that that will save them money. >> that is a good point, certainly. and managed medicaid at basically the same rate. >> very interesting to see if they can get away with it.

>> first, bless you for what you're doing. second, your observation. fortunate enough to practice in an affluent neighborhood. sometimes my patients would become eligible for medicaid. i can tell you as an entire estimate that seeing them, but it was not worth the effort be to file. as i think you know and probably many in the audience know, the affordable care act does provide for increasing medicaid payments. medicaid payments up to medicare levels over two years, 2015, 2014. so that is a temporary reprieve. what it means is it is a start, and it means we have to work this year and those payments to stay at that level and we have to increase medicare payments are at an appropriate level as well, and i have a long speech related to medicare payments. so that is a start. the important thing for state budgets, of course, the federal

government will take -- will pay the 100% of that increased cost as they will also pay at least for the first couple of years, 100% of the increase that will be required at the state. eligibility up to 1303%. then it goes down to 90. there is a british there which i think does recognize the challenge for state budgets and also the increased payments but gives us a start. encouraging people to be able to take care of medicaid patients. >> interesting. the secretary said that she also thought that we were going to have to continue the disproportionate share of payments that this new coverage should not take away the safety net money. you want to give a quick -- >> the projections are that at the end of the decade, at the end of the 10-year run there will still be some 23, 24 million people without coverage. it is not as though the uninsured issued those away.

to the gentleman's questions about medicaid and the incentives, it's true. if you have a paint, commercially paid and covered patient who is moving to medicaid, that is a heck of a hit. on the other hand, if you give somebody into medicating has been totally non pay, well, $0.60 on the dollar may look pretty good. so we don't know exactly how that is going to model how. >> particularly if you have volume and the systems. it may just give you another margin. >> it really, we have to see how that works. this theory, at least, is that the presently uninsured will now bring some level of -- they will have for coverage and bring some level. >> craig anderson, a partner with cleveland ohio. outstanding conference. talking of what about macro issues. we all agree that there is a definite case for change. we all agree, and you have really highlighted it, the need for culture as we bring

organizations and high performance teams together. my question is this, and it is really to honor all of the individuals and green shirts that interviewed for and were selected to help keep us in line all week. at thank you all very much. the question is this. we have the green team of in front of us right now, richard representing cfo, rich representing the ceo and cecil, our cmo. do we have the leaders that we are going to need in our hospitals to lead this change that is on the doorstep? and what would your message be to the students and those that are here to learn about the skills that they need to capture to be great leaders in the future that will enable our country to be great? >> i would be happy to start. first of all, i think we do have the leaders. one of the answers that i would get to the earlier question about why costs are moderating his because at least at the

hospital level within our and across the team you just identified, people have said, you know, it is pretty clear. we are never going to be better paid than we are right now. think about that. it has been true for a long time. we have more, but we will have to be more efficient and at least from the hospital point of view more people have committed to living on current medicare rates trying to get the cost structure down to close that $0.10 on the dollar gap that was talked about, and they are doing it now. at think you're seeing had dropped, at least on that side. at think there are other factors, but that is one. it takes real to say we have to change before we absolutely have to. so a couple of things i say to the students. one is that somebody once said that the you discover the future that has already happened. and i think that it has already happened.

the cost, the cost pressures have pushed us from a revenue oriented industry to a cost oriented industry even though some of the incentives it will cost us to do that, but you can see that tide is running in that direction real fast. the second thing is a quote that i saw just before the election, immediately before the election, somebody was talking about from the political point of view. all of our organizations are highly political. all organizations are, but he said, you know, leaders are disappointing your own people at a rate that we can absorb. yes. yes. and i think that is going to be the role of leaders, tell it like it is and then move people there. >> one of the things that i am hearing more and more, first of all, we go through when we are talking to financial officers especially, a litany of things that a changing within the health law, the medicare payment

and the center. and it can be very depressing when you listen to these things. people feel like they are being beaten up and blamed for things that are outside of their control in many cases. but the last question i easily will ask, and we use the audience response system so that they can do it anonymously to be optimistic or pessimistic about the future. i always get optimistic. people say yes, i'm optimistic about it because i think that we are finally getting to the point where we are thought starting to change. one of the examples is that and talking to finance folks i am hearing more and more, having them talk about the amount of time that spending with clinicians. more and more time with doctors to. the minister of folks are spending more and more time walking the floors, getting back to the idea of in an institutional or clinic setting, there is, in fact my patient interaction that has been kind of divorced from the business side. what we are finding now is that the business side, what is

referred to as the business of caring, the business side of care is touching to become better ms and connected. >> and we are integrating nurses. >> exactly. they transform the delivery. >> and i find that positive. >> one, two, three. >> thanks to the panel for a very wonderful and informative dialogue. i am one of your faculty members at the miller school of medicine. my question is regarding direct consumer advertising that we are currently one of the two countries globally that allow direct to consumer advertising. i was just curious about what your thoughts are. my understanding is the cost of that marketing would probably be priced into some of our medications and maybe contributing to the price increases. >> i can answer that one because i thought bill frets with advertising. actually was a deal. this is allowing drug companies to advertise.

actually, it was a huge debate. the administration took the position that if we allowed direct advertising even though you can barely understand what's going on there, in the end it would push up the cost of health care. senator fritz who was chair of the committee at the time argue that it would not and that it was necessary as part of the day for the reauthorization of the fda. so it was an actual political exchange. in the middle of the night senator kennedy called me and told me he cut the deal and that i was going to have to live with the advertising. senator fritz told me last month that it was the biggest mistake he made. he said it indeed pushed up, and i don't think it is very much that issue. at the most of you would probably say it is not necessary and we should not have allowed it at the time.

whether we can roll it back and not, i do not know. does anyone have a political view? >> i guess a related comment, and this -- >> it was a political deal over our very strong objections. we knew better. >> this speaks, i think, to the important. a fancy way of saying, let's get the information on line. the fda does a terrific job of assessing the safety and efficacy of medicines on the front-end. once they are actually in practice we are not equipping doctors and patients with the information that they need to make the best decision, which will really be a powerful force. perhaps a more persuasive force and marketing. if a patient can log onto the internet and see that there are three medications for my condition and for people like me generally speaking this one does

best. lo and behold, it may cost a fraction of the one that i'd just saw on tv. maybe the expensive one is the best for them, but the problem is right now we just don't know. if we do know we have the information locked up in a box. and equipping providers and patients with that information, i think, well in tests that issue. >> advertising press the provider and a difficult situation. it puts the dog and a difficult situation. the patient comes in and says i want the strike. so you must have read into that. >> absolutely. i think they are not in that position, and some of that is political as well. we do have guidelines, guidelines about what the advertising is, and there are advertising. but that was absolutely correct. regardless of the level primary care that you have had with this

patient, ten, 15, 25 years, i can say no one's. the next time it is a little harder. the next time there will probably go somewhere else to get that. having said that, what i did find in the last number of years for my practice, it did change the conversation that i had with my patients. instead of them asking me about targeted medications for which there was no sign we were having discussions about medication that they saw. so to me that was a little bit of a positive. we were at least talking about things that have been proven to work. >> let's take the next question. >> my name is chris comfort from the past university miami graduate. now i am a local small-business here in south florida. my question is a little bit about change and the pain that goes with changed. anytime that change takes place in any organization, any family,

and they think the big barrier to the change is the fear of the pain and the pain that goes with it, whether the pain is lost profit, i get paid more from my own health care or wherever that sacrifice comes to get something changed. from what i have been hearing, you know, our health care system is like cancer. it has got to be treated partially in order to correct it. you have all of these entities that i think are fighting to minimize their own pain in the process. i would be curious from the different panelists where they see to get the ball really moving quickly, which part of the process has to suffer the initial pain to get the thing moving in the right direction in a positive and fast or faster manner. >> you know, i think one of the points that was made was that it shares pain. you cannot deal with cost

containment unless every part of the system takes their share of the pain. the hospitals do not want you to do it. they want to be the first ones in line. the doctors and the nurses don't want to. for health care financing everybody has to pull in their belts or agree on a new organization of health care that seems fair to all of the stakeholders. does that make sense in terms of what you all have said as an answer to this? >> my name is bruce. adult and geriatric in boca raton. we do research from and imh and clinical work. my question is about the relative absence of discussion of mental health services in this dialogue. whether the problem is obesity, the prevalence of anxiety and mood disorders in the american people, exceeding 20 or

30 percent of the population, whether it is a shooting in tucson or a readmission to a hospital because of an unrecognized delirium or in early dementia that has not been funneled into the health system properly. how are we going to integrate better mental health services into this dialogue? >> that is a very good question and a struggle. who wants to take that on? >> a couple of observations. among all of the humorous last year, congress did pass legislation providing, as you know, mental health services as well. in addition affordable care act provides a 5 percent bonus for psychiatric care. i don't suggest that those are enough, but i do suggest that there are a recognition. they have been on this for a long time and are very supportive of it, but there are recognitions of this country at high levels of the importance of what your asking.

>> one, two, three, and then maria tried to wrap up. >> harvey wagner, an alumnus of the university of miami. i am the president's council here at the university. i spent my first 35 years after graduating from here as a financial person, chief financial officer for many high-technology companies out in silicon valley and boston. as we all know, in technology it is all about cost. health care, i think the two main issues are quality and cost if we are going to get things under control and also getting consumers to be somewhat responsible for their own health care. we have had quality metrics in health care for many years. being able to do it and reporting to the government. and i am just wondering, is every single hospital required

to do quality metrics? there have been several hospitals that have won the malcolm award because of the ability to get the real data to understand what the root cause is the of the higher cost and the variability in and out comes between position a and position the. i know that is a problem of measuring doctors against one another, but that is what it takes. you know, the automobile industry at one time in the u.s., at least the first time they get in terrible trouble was because of the quality of jobs in japan. when they installed their quality systems they were able to compete effectively. and i am just wondering how far we're going to be a i also spent seven years and health care as well. so, i understand the quality side of the picture and would like to hear how far we're going in that area. thank you. >> a couple of things.

one would be from the hospital point of view. under medicare all hospitals are required to report if they are having prospect of payments, which is the vast majority. largely it is not critical access. we also have a lot of critical in our reporting. >> you pull it up as a consumer on the hospital, they don't want to have it. they don't want to have a blank because people interpret that in ways that might not be so helpful to that organization. so, the good news is that the joint commission has recently published a paper that shows that on their core measures, which very closely aligned with the medicare measures, we are now seeing well over 90% of hospitals and achieving those targets more than 90% of the time. now, obviously still plenty of room for improvement, but that has picked up because i think there is more agreement around

the measures. people feel like they have been tested and evaluated and they have had a say in them. secondly, they are getting better at pulling the data, but it is still largely a manual process unfortunately. thirdly, they are learning that is out there to be don't want to look second best. they are asking for the data and using it for improvement purposes. so it is an entire cultural shift with regard to what some would have called scorecards in a negative sense of report cards and a negative sense before to hurry up and get me my data so that i can get better faster. >> one of the thing that we are finding is the conversation is very quickly moving from just talking discreetly about quality and cost and access to value. we have a project we are working on right now with 17 systems throughout the united states. south florida is one of them.

will we are doing with that group is trying to come to an understanding of equality metrics that are out there. time to say what other quality mattress out there and what is the interplay between the quality of buttressing cost. what of the ways that we should be describing value. at some point that is with the purchaser is looking for to be looking for a level of quality at a reasonable cost. so trying to pull to of those concepts together is something that has been needed in this industry. very prevalent in other industries and is chilly -- slowly but surely, one of the issues that we found is that this project has the chief medical officer and chief financial officer together. what we are finding is that the chief medical i.d. officers argue about quality metrics before we can even get into the cost conversation because there is still lots of discussion about what is appropriate, but we are making good progress.

>> add to that. >> no. i would love to. two more questions. you can talk to people afterwards. >> i left practice medicine there. a graduate of the school of medicine, i have a question about patient accountability. all of this about the provider accountability and an earlier session and we have been talking about here. in my practice or experience, we have a really tough time getting patients to do things such as watch their weight, what's their fluid intake, do their daily heart failure clinic. as far as costs go, i remember distinctly when medicare decided to pay for the 20% of laboratory tests that they had previously. this was 1988 or 1989. all at once the same patients that said we really have to get

this lab test. i want another cholesterol level. i don't here in all of this discussion and our previous discussion this afternoon and anything about patient accountability. okay. >> health care. the payment. >> having said 75 percent of the cost relates to patient behavior , boy, that is a slam dunk and will be easy. how do you change behaviors? and so i think the thing that we do have to be careful about related to that is not to be in a mode which says you have to do this so we will penalize you. we have to be in a mode which says this is actually going to make you feel better, so it is going to improve the outcome for you. that is a big job. clearly i think that is where the major changes will be made. >> my name, i just graduated

from the university of miami. as the previous question, thank you. kind of stole my question. >> looking for a job. >> the quality aspect of this, but i guess i'm going to ask it again just because i'm standing right here. [applause] >> that's our students. >> and he has already graduated. >> one of the has mentioned that 20%, 80 percent in the country. the population is increasing, aging, but funding is still there. my question is basically how do you think the public providers will be able to maintain the quality of health care when reform comes and be able to approve that. >> a tough question. he wants to take it? >> well, i'll start. you're talking about work force issues and the workforce

shortage. can you maintain quality under the circumstances. i would suggest to you that physicians when they see patients, it's exactly the same quality, and they will continue to get up in the morning and say how can i do this better. the challenge will be access to the quality, but i don't see any reason that the quality should suffer. as a matter of fact, we talked about a number of physicians and the affordable care at the do relate to quality changing how we do the responsibility for private care, looking at out comes. i think those of the kind of things that will actually help with quality, a decrease variability, and increased. >> i think also there will be a natural migration away from things that you don't do well. >> especially with more interference. so if you can't hit the numbers players may not contract with you. purchases may not put you in their preferred network.

once things are much more routine and routinely in the public domain around performance i think you will start to see providers and practitioners move a little bit more toward what they do really well and what they can make work in the business model. >> okay. final question. the president has just been reelected. secretary kathleen sebelius decides to go back to kansas. she calls you in and says, -- he called you in and said, i would like you to take the hhs job, but your first assignment is to tell me what to say in the state of the union speech about cost containment. what -- and you only get a couple of lines because everybody else wants a couple of lines. so, let's start down the road. tell me -- you don't have to tell me whether you would take the job, but what you would tell

the president, what you would tell the president to say about cost containment in his second term speech. he wants that to be the lead on health care in his second term. >> i don't have to think about it. change party identification. [inaudible conversations] >> you know,. >> president obama. >> i think that i would suggest to him at one level do not open promise. try to get a sense of what we all know, and that is that it will not be easy. try at some level to engage us all because we all have to be involved. >> i would say the same thing. a call to action. somebody has to lead this nation in a different direction. the promise that we will make changes that are responsible, but that we have no choice but

to make changes. >> and i would endorse the call to action. are reelected democratic president would earn great credibility with the american people on this issue by extending an olive branch to the other party on medical liability reform. >> okay. [applause] >> i would not take the job. no way i would get through. but i think what i would do is link the economic growth of the country to containing health care costs and getting the health care system under control because they are absolutely late. >> thank you. let's think this absolutely marvelous panel. [applause] [applause] >> let me remind you that you are invited to receptions. we are buying the drinks. and we won't charge you. thank you.

we have good sessions tomorrow as well. [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]

[inaudible conversations] >> coming up next on c-span2, charlie cook previews the 2012 political landscape. afghanistan's military leaders discussed the country's future after the withdrawal of coalition troops. or leaders discuss economic growth at the world economic forum. >> this weekend governors will talk about how to grow their states' economies, education, and cyber security as they gather in washington for the annual winter meeting of the national governors' association. live coverage throughout the weekend on c-span. >> c-span2, one of c-span as public affairs offerings.

weekends book tv, 48 hours of the latest nonfiction authors and books. connect with us on twitter, facebook, and youtube and sign up for a schedule alert e-mail at c-span.org. >> on friday's washington journal we talked to charlie cook, editor and publisher of the cook political report for his analysis of congressional races and the likelihood of a second term for president obama. ntinues 45 minutes. >> whether it's on this program or other coverage, charlie cookl is a regular. back. keith for. >> been doing this for 25 years are so. aged a t host: i want to begin with news that came up from 84 that looked at solid democraticlid do states in the comparison between teeth as day and 2010, the solid blue states cut in half. >> well. >> guest: well, 2008 was the peak year for democrats. a great time in the republicanye

party. going through a slump. democrats surged up. you see that come down some.if l if you look at the broader partm identification numbers, what yos see is democrats have gone down, and dependents have gone a lot which isn't reflected in that because that is just democratic and republican. people are coming. the democrats pete and cut down. thissiont that republicans have in this w version where they pushed the independence one way if the other, if you just look at raw numbers were independents go up.dent >> host: let me look at the agan steps of 2011, much could change a year from now, but in terms om rempetitive states for democrats and republicans the states include indiana, wisconsin, virginia, florida, texas,, nevada, new mexico, and nevada, new mexico, and arizona.t at arizona, and it but in mexico

and nevada. >> guest: well, what you start off with is the 2008 match.t mai which tasted mccain when and which states obama one. then you sort of mechanism that mccain was a low water mark form republicans and obama wasar a ha water mark. then you look at the state's whe where senator obama one just barely. be th ones those would be the ones that goi republicans are going to be trying to reach if he can hang . on to them, and president obamat can hold on to the virginias ans north carolina's and indiana's, then colorado. if he can't, he doesn't. >> host: you have beeng sm handicapping these races for a long time. can the retirements, among them, kent conrad, jim webb, joeocra o lieberman, and to republican retirements, it john kyl and kay bailey hutchinson. >> guest: well, the tough one for democrats is the twopublic

republican retirements, kay johe bailey hutchinson and john kyl. it is pretty unlikely that democrats can pick those up.ublv republicans have a better chance of picking up those open democratic seats than viceic sea versa, but i think it is a reflection of what we are seeing overall which is democrats have 23 seats at risk in 2012. republicans only have ten. if you look two years after that democrats have 20 and republicans have 13.ave a lot of what democratic members are looking at saying, well, thd odds are pretty high we will lose control of the senate. los control of the senate. do i want to stick around if i'm in the minority? if i'm in the -- if i stick around, i'm in the minority and if i don't i'm defeated. host: the top states in the senate races include massachusetts, montana. nebraska, nevada.

new mexico. and north dakota, virginia and west virginia. >> if you look at where democrats have problems now more than say 15-20 years ago, it's states with higher sort of small-town, rural vote. that sort of thing. democrats have lost a lot of ground in sort of rural america. in fact our house senator david wotsalman figured out while democrats last only 25% of the seats in their house, they lost 60% of the land area. and now the democrats strength is more confined to cities and the suburbs, unless host: let me ask you about the presidential race.

this morning david brooks writes run, mitch, run. and i ask you this with what you just said a minute ago about thousand political climate benefits the republican races. he says -- he is seriously thinking about not running. and govern daniels has been a comp tent manager. and it says governor calls for someone run things efficiently. governor daniels has spent his entire career preparing for this kind of moment. guest: yes. i've known him since he was a staffer in the early 190's. as you probably did. incredibly talented guy and serious adult and i think he's really torn about whether to run or not. it's an enormous time out of someone's life. i think he genuinely hasn't

decided. but if you took a poll of pundits, the feeling is he's less likely to run than run. but he's such a talented guy. he'd make the race a lot more interesting and i think would elevate the conversation. host: florida wants to move its primary up to january 31 pitting us back in 2008 where we were speppeding christmas of 2008 in iowa preparing for the caucuses. guest: i don't want to speak for you. but i suspect. i love iowa but i just as soon spend new year's eve at home. back in 2007, there we were having dinner on new year's eve in des moines. yes. i think there's a feeling in both parties. let's not crowd christmas. let's just let the thing kind of not front led to quite as

much. and we're sort of all hoping that florida will play by the rules. you know, the party's -- the parties can and will sanction states by cutting their number of delegates in half if they jump the calendar. i certainly hope florida won't do that. host: i'm going to ask you how do you think the republican field will take shape and when? guest: well, one theory, bill mack enturf you've had on the show many times, a republican pollster. he used to have a theory that think of it in terms of an ncaa basketball tournament where you have brackets. so different candidates are competing in different brackets early on until you get to the semifinals and then finals. so the way you might look at it is there's a tea party bracket

of people competing to be the tea party candidate and maybe there's a religious bracket. then there's probably a larger main stream kind of secular bracket. bracket of candidates competing there. so if you have people, like, let's just say hypothetical sarah palin and mike huckabee don't run, then whose the cultural conservative in that group? i know senator san torah running there but rick perry who i noticed was on c-span, is he competing in that early on that can pull somebody else in. if certain big players don't end up running. host: in terms of announcements, governor clinton didn't announce until october of 191 and governor george w. bush didn't announce until june

the year before the election in 2000. guest: but we might as well be talking about the dinosaur era. now the republican nominee will need to raise maybe $200 million between now and winning the nomination, the last primaries would be june of 2012. nobody's in yet. my guess is we'll start hearing candidates, people announcing march, april, may. so they'll be needing to raise, you know, just short of a million bucks a day from the day they announce their candidacy. so the luxury of holding back until the fall of this year, i don't think it's there. host: and with with regard to president obama, you wrote hang on tight. it may not recommend the deepest cuts by any democratic in the history, but it comes

close. guest: yes. i think what we've seen since the midterm election is the president's sort of shifted course and acknowledged that things have changed. and it's not a matter of republicans will be proposing cuts of this level and we'll end up somewhere in between, probably a lot more than democrats want and less than republicans want and hopefully it gets the country headed back on more of a st. court. but hopefully not too much. host: you can send us an email or tweet us on twitter. in 2006 when the democrats gained back control of the house, they picked up additional seats in 2008 and lost in 2010.

as you look early ahead for 2012 for the house and where the republicans and democrats stand, what are your thoughts guest: the factor going inspection democrats' favor is when a party picks up 63 seats, like republicans have picked up, there's some people that -- republicans that won because there was a 70 miles an hour tail wind at their backs that may not rezist at in 2012. so sometimes you get these land shide wins that are hard to hold on to. democrats are going to be in a stronger position in redistricting than at any time in modern times, so you've got some offsetting factors here. then one data point that may or

may not be the first time a -- my hunch is that you're not likely to see a over the of more than 10 seats one way or the other, which obviously, if democrats picked up 10 seats, they are still short of a majority. at this early stage i don't see a waive and so it would obviously be a departmentture from what happened in 2008 and 2010. host: do americans like a divided government? and if yes, what chances does that have on the president's chances? guest: well, i think

republicans in congress are starting to kind of figure out that their success is not necessarily contingent upon president obama's failure. and that people do like this divided government thing. so i -- it's way too early. presidential job approval rate ings. but looking at where the economy is going. it's pointing towards a close race, but probably not quite as bad for the president as it looked five months ago. host: let me bring it back to this map from the gallup organization. the democrats losing 16 states the viewed as solid democratic states. now introduced there are states

that are put in the gallup category. in terms of identification. it's probably a bigger number than i would put. but this is a country that independence has played a huge role in the outcomes. for example, in 2006, independent voters voted by an 18-point margin for democrats in congress. in 2008 independent voters voted in favor of democrats for congress. and senator obama over senator mccain thirned around voted in favor of republicans in 2010. so if this were an austin powers movie is -- they are going to play the key role in everything next year. host: let me take those numbers one step further. for 2010 listed 14 states, nine lean democratic. 18 competitive states.

tossup states. five leaning republican and five are solid republican. diane is joining us from washington, d.c. with charlie cook of the cook political report. good morning. >> we're food. how are you? >> fine. >> first of all i'm very sorry that you had to listen to the gentleman's negative comments about you. i think that you are probably -- i will not say you're the fairest person on c-span, but that's not why we watch. we don't care if you're fair or not. what we do care about is you let people express their opinion. people get to call in and say what they want to say. you don't try to dissuade anybody or convince them to think the way you think. so it doesn't matter if he our anybody thinks u -- so it's sfwreat to touk to a policy

person or lawmaker or maybe somebody who wouldn't get an ordinary chance to speak to. so i just want to say i love when you're on. i always know i'm going to learn something and hear something interesting. that's the first thing. host: we'll give you his phone number so you can give him a call. just kidding. caller: [laughter] and this is so wonderful for me, because i met you. i'm sure you won't remember it, but i won't forget it. i was very rude, actually, because you had just picked up your dinner from a thai restaurant, and you were in an underground tunnel in the bethesda metro and this big, black woman just got you. [laughter] but i introduce -- people were walking by and i was, like, do you know who this is? this is charlie cook! but what was so wonderful about it, you actually stopped for

almost 10 minutes, and you just let me talk to you about my feelings about politics. and i won't remind you who the person was that i had voted for, but what i thought was just so wonderful was you actually listened to what i had to say and asked me questions, so i just want to say i think that's why you are and have been as successful as you are. because truly more than posters, i care about what you do and the opinions. as best you can, you really do try to base it on what people are actually thinking as opposed to, this is my opinion. guest: well, thank you. i will have a spring in my step the rest of the day and no, this isn't my wife calling in. thank you very much. host: james tweeting in, sticking to charlie cook is a pretty big deal.

he's a big star. guest: well these people are the most scrupe lousely down the middle eptty in american politics and i've never noted any tilt here whatsoever. so that's why i love going on, because you know it's always going to be abc louisly. thoip nation's governor is meeting here in washington this weekend and you write about the intense emotion and anger by the american people to the left and the right, and it's crystallized here right now in madison, wisconsin. guest: i think part of thi thin comes from a frustration. but on a second with the problems facing the country and the fact that we haven't addressed them.

but on a deeper level, though. i think one of the causes of frustration is that, and particularly just sort of aveiving from last year, the te party movement is there's a why won't these people in the building down the street address this? we are not talking about waste, fraud and abuse or foreign aid. these are rounding errors. 2 big stuff is medicare. social security. transfer payments. these decisions are really, real, really hard ones. and very, very painful ones and you know, i wish that our budget problems were easy enough that we could deal with

it in terdg of waste, fraud and abuse. but i think people have justifyably cy je to a point where they agree there's an enormous problem, but i think the suspiicaon is the solutions are easier than they really are. host: for charlie cook, jerry from ohio. our line for democrats. good morning. caller: good morning. one of the points i want to point out is the decline in the democratic party since 2008 i believe was caused by republican filibusters in the senate. the democrats came in with a very strong a fonda, and that was to have over 200 bills passed in the house, and they were absolutely killed in the senate. the strategy when the supermajority was in the senate was to get a couple democrats to switch their way and then unveil the filibuster.