we are headed to the market is driving is, the population base value-based payment. it's happening and it's happening now. and again i think physicians and hospitals are ready for this. they are tired of continually feeling we need to crank out

more volume in order to meet the population. what we need are payment systems that allow us to be rewarded economically for the value that we create. and there's huge value to be created with the money that we have the we have made this commitment. we said that this is our strategy going forward. we believe that it is relentless regardless of what happens legislatively. the market is driving us and we're all in. the tool that we use is clinical integration. there are four or five points. won his primary medical homes. we have been using this for 14, 15 years. primary care. second is patient-centered ehr and i.t. systems. as dr. brenner said, this is not the gazillion dollars i.t. systems that we had about all the time. these can be very simple things th.dave came home one day and sd

it would be great if i had the disease registry for this. we can even develop it. so it's not sophisticated expensive stuff. we need basic stuff, and it can provide this enormous amounts of data to do it enormously great work. third is coordination of care. we've invested in the primary care site. each of our primary care clinics have multiple health coaches to assist interpreting the disease registries for the family physician speak with transition coaches in the hospital, make sure the transition goes quickly and easily write to the primary care physician. we have intensive ambulatory care clinics so we have a very sick clinic, rather than automatically go to the hospital they go to the instance of ambulatory care clinic to make sure to get all the intensive care that they need, maybe and avoid hospitalization. standardized care process.

we have actually growth between specials and primary care doctors that says we do this, you do that. so we avoid redundancy between primary and specialist positions. in the data management. what dr. brenner said, top 1%, 30% of cost, 50% of calls. we donated everything. we just need to do more everything small segment of patience and focus on those patients. we will have dramatically reduced costs. the drivers of cost reductions are pretty simple to their intuitive to you. again, counter to how we have worked for 35 years in this world where we've been paid on a fee for service business, the more we do the more we get paid. what we want to do is reverse those and since a we can provide value instead of just followed him. second is decrease in episodic cost of medical services so we get primary, increase primary care offices.

eliminating non-emergency he argues, improve primary care, and then the decrease in administered costs, improve self-service. this gives you the same i get dr. brenner said this is actually data that we have. so everything must change. we need to change the system but we don't have to change it for every patient. what we need to do is focus on the highest cost chronic patients. so if you look at this, distinct members, so you look at the number 70, triple multiple dominant chronic diagnosis but there are only 399 patients, but it's $2284 per member, per month. as you look at the payers, multiple dominant, that's 4704 patients, $955. so you start to say where do we have the biggest bang for our buck? where you can the most impact in

the work we do? we now have this data. first time ever where insurance companies are actually providing us some data as physicians and hospitals. but otherwise where this are isolated -- i know my hospital data. jeff does what is physician data is. this is not expensive stuff. it is there. so what we need to do is find ways to bring this data to the warehouse and analyze that data. results are pretty remarkable. we've had this for multiple years. 20,000 patients using disease registries, primary center medical home. patients with h. a1c chart to the diabetic test, so it's significant improvement as result of this. congestive heart failure, what we had before was patients with

congestive heart failure was coming to the hospital, get worked up, biggest massive bill. go back on, get sick, doctors would say do this, this in this. the reality is they would go home, nobody would fall. they would get sick of a comeback. economically helped us because they came back to the emergency room, came back to the hospital so we improve ourselves economically. but worse, increase the costs. what we did was simple -- not high-tech stuff using case managers and computers and telephones, calling the patients think how is your weight today? if it was changing, the case manager would say well, do this but what happened was 85% reduction in inpatient, 80% reduction in dd this is. economically in a fee-for-service world, look at what the cost savings there.

this was done, no additional payment, through no additional steps other than it's the right thing to do. this shows you blood pressure control, incenting the provisionphysicians. the benefits israel. so you think of that one test public at this, the results. 35-40% decrease in strokes. 25% increase in in my. 50% decrease in hartford. wellpoint decrease in systolic blood pressure over 10 years will prevent one debt for every 11 patients treated. so those tests actually result in very real outcomes. the mercy applied the same benefits, or same design, benefit design and incentives to our own employee health population. so mercy des moines premium cost per employee increased less and

less each year. you can see the increase, implemented in 2010, you can see an actual decline in our employee cost reduction and increased to an actual decline last year. we attribute it to the very basic benefit design risk assessment, doing our patient-centered medical home for our own employees. and again, it's amazing after doing this work for 35 years, it's not the sophisticated stuff to its basic data, getting that and using it. lessons learned are this, engage everybody. don't focus on one or the other. governor branstad is doing that in our state, bringing people together. again, my message to u.s. providers, physicians, hospitals are ready for that engagement. top four things come to support i.t. again, not to hide the million

million dollar effort, the data warehouse. get basic health information change the get basic information to the providers at the site. support clinical integration. remove the legal and regulatory barriers to doctors and hospitals can work together and provide better care. don't create barriers. knocked down the ones that exist to strengthen primary care. that's the backbone of population health management. hospitals and specialists have historically resisted that but i think the message is they should be supporting it because the better they are at population, the better they'll be at providing inpatient care to ensure medicare payment. make sure you do that. reward value, not volume. mercy is participating in three key initiative to iowa home health program, led by, a step in the direction, we've got to

provide the stuff of patient medical homes and home care and every site across the state. will participate in. there's a work group led by governor branstad and lieutenant governor reynolds that is redesigning i was health care delivery system. engaging, competing doctors and hospitals to how do we do this better? that's tremendously successful. so we are proud of what we've done. we are 10% of the way. would've a long way to go but we are on a track, and a message to you is try to engage your physicians in your state and hospitals in a collaborative fashion and say let's go in that direction. >> mr. vellinga, thank you for your very fine presentation. i also want to say that in my previous position as president of des moines university, which is a private nonprofit medical school in des moines, we worked very close with mercy and the other providers in the chronic care coalition, and working on

congestive heart failure and diabetes patients, and so you've been working on this for a long time and we appreciate your leadership. i now want to turn it over, and will come back for questions to you as other panel members. i want to turn over to governor quinn to introduce our next speaker. >> thank you. i'm pleased to introduce jennifer decubellis, who's with the hennepin, the hennepin health director for hennepin county in minnesota. jennifer is the area director and human services and public health with a responsibility for health care reform. before joining hennepin county in february of last year, she worked at houston, texas, as the assistant deputy director for the mental health, mental retardation authority. while working there, she led an initiative to improve system efficiencies between multiple public sector agencies as a

means to improve patient experience and reduce costs. in hennepin county jennifer is taken by some role in bringing together the county hospital, hennepin county medical center. the county operated health plan metropolitan health plan, the county federal qualified health care center that is northpoint health and wellness, social service arm of hennepin county that's human services and public health department of the county. the whole idea is to make a streamlined model for health care reform. jennifer, the floor is yours. we look forward to your commen comments. >> thank you but i appreciate the opportunity to be here. hennepin county has newly embarked on health care initiatives, which is trying to look at things differently. imagine not knowing where you're going to sleep tonight, not knowing we are next meal was coming from. this is the very reason why oftentimes we find patients that are not taking medications, not managing their blood pressure.

and it's the biggest failure of health care is that we're not paying attention to bringing together health care services with social services and basic needs. and that's the exact opportunity that hennepin county is working to resolve. what was identified is that we are in crisis, about two years back as the economy took a turn for the worse, we started as a county providers see more people accessing services due to unemployment or underemployment, more people are coming to safety net providers, but revenues were down. with revenues down, demands up, the system was in crisis. with every crisis is opportunity, and that's what we're looking to maximize. looking into the problem, we looked at where are we spending our greatest dollars, and you've are heard my co-presenters mentioned at the top 5% in hennepin county are utilizing 64% of our dollars. and it was an approach to see what were the utilizing, and what we found was it was very crisis driven care.

crisis driven to his or most expensive venue. most of the dollars right now are going to crisis services, not to preventative care. we also noted, notice system fragmentation of systems that were not working well together oftentimes with her payment models, systems provide specific services but they don't look across the span of holistic needs these individuals need and ensures that folks don't -- folks don't fall between accounts. we are also looking at cost shifting. we had the opportunity look at when health care fails what happens in our corrections? what happens in the jails? what happens in the shelters, and where are the other downstream costs begin were funneling a lot of dollars into defense services instead of ensuring health and wellness up front. hennepin health is one initiative in the state of minnesota of many. the state of minnesota is working on integrating and

coordinated across continuum of care. they are working on a work contract with providers and counties on initiatives with those providers and counties does know the needs of the populations they serve. they're also encouraging multiple models not a one size fits all approach. so what i'm sharing with you today is the hennepin health model which is just one of many in the state of minnesota. as the governor mentioned, we have our hospital, our federally qualified community clinics, our social services arm and our health plan all working together to try and find a service system that works well. we also have extended community partners. in talking to partners and providers in the community to say we've got to stop impeding and we got to start collaborating to. because when we compete and don't share our learning, our successes as well as our failures, we don't maximize the opportunity to improve the system across the span of health care. the premise of hennepin health

is if we don't meet individual basic needs will not get their attention on health care. and what we found as a starter looking at the top 5% is within individuals that were labeled noncompliance. and the health of system felt like it and everything they possibly could to work with the population. in looking into details of those individuals lives, what we can quickly found was the reason for the. it was transportation. it was lack of resources. talking to patients about why they going to emergency departments in large volume, we didn't find it because they prefer that's what i want to get their care. what we found his transportation was a challenge. if they had a neighbor that was able to drive him at some point in your to go and they needed to go today. they didn't have the funding for preventative services or didn't know how to access those services. what they did know is a venue to call 911 and have an ambulance taken to the hospital. those are huge opportunities to reduce costs and change of services are delivered. the population that hennepin

health is working with his medicaid expansion population but that is what we found the biggest bulk of our dollars going to is to a population who typically are not connected into care and into services. we started january of 2012 and a continued to say don't we have some great learning that i will share with you. we'll have built about 30% of what we know needs to change in the system in order to provide better outcome. population characteristics are very telling on where we have gaps in service. 60% of our population our minority status. chemical health and mental health needs make up 60% of the population having one or both of those conditions. chronic pain at 30%, unstable housing at 30%. 30% of these folks were very transient, often in a shelter, often in our corrections department, often in our emergency departments because they don't have another place to go. 30% have one or more chronic diseases. what we have taken is the

opportunity to work with what we call tier three members. it is those highest cost individuals, the system is working to lease for. it's not just a cost driven model. clearly the system is not working and that's why they're in those service. the approach we've taken is for everyone of those individuals who we can turn care around for and get our arms better around, we free up amazing dollars to get to that next year and to continue to recycle those dollars through service system. objectives are to improve the outcomes for patients. we've also added in improving the experience for our providers but if we do this on the backs of providers by constant reducing rates and reducing opportunities, we are not going to more providers coming into the system and that's absolutely what we need. so we're watching for providers action and what we for providers want this as much as the system want to, as much as the pay is one. because providers get into this business to provide good

outcomes and good health care. they need the tools to do so. core elements of hennepin health, it's a patient-centered opposed to patients at the table, not in gaza but in a workgroup helping us design a system. utilizing health care home approach to get as many people engage in preventive services as possible. and integrating providers across the system. this integration across this is critical. and so hennepin county has a unique opportunity because we operate several of the pieces of the system today, this is replicable in any system. where providers need to be incentivized to work together and not focus just on their program. because the cost and the duplication of services are incredible. i met with one individual in a shelter who is confused about what was happening, and he said i've got a lot of people working with hard to get me where i need to be, but i don't really understand where i should be going. what i found in looking into it was that he had a caseworker from health plan assigned to them because he was a high due

to lead he had caseworker at the clinic that was in the shelter where he was living, a sign to him talk and get better. he had a social worker assigned from the hospital because he is frequently at the hospital and they were trying to reduce admissions, and headed social services social worker assigned to them tried to help meet his needs. none of these social workers, caseworkers, whatever term you use, knew that the others existed. huge failure in the system. what was happening as folk for off and running in separate directions, and sometimes even running in the same direction but a waste of resources and an individual who couldn't get the care he needed because he didn't get that they all worked for different entities. he just knew he needed help. what we've done to try to solve it is we're looking at a one core patient record but i think or patient record because unfortunately with the statute a lot of different social services is required to enter in certain system from health care providers are, so there's a lot of different systems but the one core patient record is the place to bring all of those systems

together. what we have created is some dashboard again quickly, if i'm a provided composite want to do is wade through a lot of caseworker notes and social service notes and who's doing what at the shelter and who's doing something in specialty care. i need a dashboard that tells me for the specialist i met one of the key things i need to know. it bubbles up from the record to get in those key indicators of the dashboard for a community health worker was looking to see who failed and appointed, who didn't come into who do we need to go out and see, who hasn't picked up medication refills, very different than what our nurse practitioners or our physicians need to see. but its inability to have one system that helps flag there's another caseworkers has recently been assigned over here with one of our community partners in social services that you need to know about. what we're doing is pulling those folks into virtual treatment teams. don't need to be on site. we don't need all work for the same place. what we do need to do is coordinate care and understand

who some point will get to the outcome that we want for individuals. goals one and two are similar to a lot of things that are happening across the nation to its reducing emissions, readmissions, emergency departments. is reducing this crisis services and hopefully our shelter services as well. and working to increase getting folks into those preventive care. second upstream it's been more of our dollars upstream to prevent those higher costs downstream services. we are working a lot on reducing churn. by churned i mean folks shopping in and out of benefits, a safety net provider in minnesota what we see in every individuals are falling off of medicaid benefits because of the renewal process and the paperwork. not that they suddenly got this one will job and no longer need to care, it's that they are transient moving from place to place and don't always know that that the renewal date coming up or how to complete the paperwork. it's a system failure to meet their needs. our financial model, for this project, hennepin county is 100%

at risk. basically what they've done is given us the same per member, per month about the goes to the engines companies and we do have an covenant within the project who gets that. but the difference has been this give shifting. we have the dollars. we have to provide the medicaid benefits but we have the opportunity to make other decisions and spend dollars and others would. an example is somebody who has diabetes and is in hospital greater than six times in a year for insulin issues. what we're finding is that it's simple things like my refrigerator isn't working, i don't have a place to keep my medicine. and $800 refrigerator being purchased by hennepin health to reduce a $12,000 hospitalization. huge cost savings and easy answers. we been is what the partners is that queuing model is for everyone we take care of at the higher level we are able to fund social service to others who weren't getting them before or were able to fund some

preventative care. and it's constantly releasing more of that funding back into the system to take care of a larger population. they of any sport about the approach has been in the past when funds are not shared across system, you find that folks don't take care of each other. so we have individuals who are tougher like a better word stuck in a hospital bed. medically stable but have high need, traumatic brain injury, behavior issues, high needs and nobody wants to take them. well, at the point that the system doesn't work together, the hospital is on the hook for the. there's no reason to be able to get payment at that point. in the past systems were not motivated. now what you will see if we wave a red flag and social services is at the table sick let me help you, let me get creative on how i can tap into resources. we have nursing home saying they're willing to partner with you. nursing home said we're tired of you just charging indigenous. now the were all in it together,

the hospital is motivated to support the nursing homes. when we talk to them, the nursing home said we will take those difficult patients but what we need is when the patient is difficult we need your team in our doors helping us manage and because if you're not there, which is the traditional model, if you're not there providing that support, the tendency is to call 911, senate and this goes into the hospital and as soon as they are stabilize again, that same placement doesn't want them back. so it is provided as an opportunity to incentivize folks as they were only to support each other in working in a wealth of individuals, and this has some great successes your early learning and go through a couple quickly. dental and our emergency partner was one, on day three is identified and a high population of our folks are going to the ed for dental could think of the traditional model. you get indeed the visit. and ed charge. they prescribe pain medication and there for you to the dentist. for our low income population, what happens is you don't wait to get to the dentist or the

dentist isn't available. so three days was even back in the ed for more pain medication. we also have a high chemical dependency in this population. we have probably made that case worse. what we did a self-identify that, it was identified through data, same-day access to dental in the ed and say ed we don't want you to see this individual in more. stop giving them the band-aid and let's get them into the dental care same day provide the care they need, and solve the problem. those are the constant opportunities we keep finding of our systems when motivated to work together can make huge improvement. another example, pharmacy consults have been deployed. what we found in the top tier is it was not uncommon in the past 12 months to 11 different providers and greater than seven different pharmacies. dangerous health care is what happened is that providers, those 11 different providers were all duplicating services.

they were duplicating tests that had already been run somewhere else because that payment system doesn't motivate him to go find out from the previous provided what had happened, or the data technology doesn't even allow them to know that that provided existed. what we are looking at is to change that. our pharmacy consults has been able to get out reach, doom medication management to bring costs down by 50%. medication delivery is another initiative. what we found was folks were not taking other medications. the health plans are providing transportation to go get them, but with a low income population that often, their priority was going to the pharmacy. so we are testing delivering medication to them, give us an opportunity make sure they get their medications, understand how to take them and we can successfully deploy those resources. our top 40 and top 80 tiering, graduate work our way through that list to see what is the health care system failing, how do we change it for this individual, how do we take those

workings and expanded across the entire population, where we find system issues that are working well together. those are some of the care and issued its we have, and it's a small sampling of the many things that are moving as we learn more and more about what is broken in the system. some large system enhancements is the health plan and the providers. typically health plan and providers don't share information. we are taking our health plan and merging it in with the providers and saying we don't want to nurse lines. health plans often run one, providers often have one. duplications of cause. and united needs that information? the health plan doesn't necessarily need that information about what was the crisis. the providers are the ones you need to act on. bringing those systems together instead of disparage is huge the same with disease management. same with out reach calls. is a fine of information that often doesn't get to the provider and the provider is the one that impacts that care. we are looking at continuous care links.

the behavior health program, we have some fibers programs in our community. unfortunately, their levels of care. when one level of care is done with what they have done and to improve the lives, if improve the outcome, patient gets referred -- challenges to resolve. we have several challenges that were faced and are looking for some solutions for with this population specifically. i mentioned the eligibility turn. what happens is members that lose their benefits can if we don't help develop a system that can help them stay on benefits, and said active engaged in? what happens if they go to fill that prescription and they're told they no longer have and if it's a need to pay out of pocket. they can't pay out of pocket. this is a population that is less than $700 a month in their pocket. if they can't pay for it what

happens is they stop the medication, in the back and emergency department, and we've cycled them back through the system again. so we've got to find a way to keep folks engage. out of the challenge, all of us talk about data and the power of having david invokes hand. as we talk in hennepin health about bring health care together with public health and together with social services, one of the big fragmentation is our statutes don't support. with health to statutes that define what data can be shared. we have welfare statutes that define social services. we don't have statutes that 35 how do those worlds work together. within the regulations that are in front of us. so that's been a real challenge force of getting information in the right people stand at the right time. informed consent for patients are the ideal way to be able to share information can do our folks who are jumping between christ services and improved our situation will need to be up to quickly deploy the resources to

improve their lives to get them medicare. we need to figure out how to do that in a cost effective way. thank you. >> well, thank you, ms. decubellis. we appreciate your presentation and the presentation and the perspective of each of the speakers. and that we would open it for questions. yes? doctor herbert? governor. >> boy, i discover motor. that's pretty good. thanks to everyone for their presentation. very informative and i think it gives us pause for thought and what we can do at the state level. dr. brenner, i was asked a with a comment you made that said health care has not innovated. and as i was just think about that in my own lifetime over the last 50 years, it seems like we've seen a lot of innovation in medical care. with new surgeries and processes, procedures,

transplant of oregon's, knee surgeries placements. it's been remarkable, the advancement of drugs. that is not like it is better quality of life, but improve life in the surgery room, and better outcomes and quicker recoveries. less invasiveness in the surgery. so it seems like to me we have had some significant innovation. i know in the united states our health care is expensive, but it looks like to meet our quality is very good. and particularly for those kinds of problems that would be life-threatening, whether it be heart problems, cancers. if you going to treatment, being treated in america is probably the best place in the world for having better outcomes for those life-threatening diseases and problems. so my question to you is, what do you mean by lack of innovation in health care? and if, in fact, there is a lack of innovation, why?

>> a wonderful question. thank you for picking up on the comment. we are seeing incredible innovation, so the surgeries were able to do, the medications we are able to deliver, so it would be as though we were apple and we have invented an amazing iphone, but every time we did a redesign of the iphone it took 10 years to come out of the laboratory. so what makes i.t. in a country so innovative is something called -- sought to play with make the iphone, the wrong address come into the plant, almost the same day the profit comes out the other end of it is so that this very little product on the shelves and every time they cycle through a new version of the iphone, this just in time manufacturing system is finely tuned to make the product. so that's a process reengineering. the cars are, the end of the

assembly lines now, a lobbyist and the like hit the button and stop the assembly line if there's a flaw or an air pixel as a result cars are, it's not just web in a different kind of car, but the when we make the car has been processed and reengineered. so in health care we do incredible things to people everyday, but the sum total of all the parts is often a failure. let me give you a very clear example. a 70 year-old patient in camp and was flagged because he was frequently going to the emergency rooms of hospitals, a poorly controlled diabetic with terrible sugars, indy 500. our team went out to see him and he set the insulin bottle that can be buddies rich in a bottle and drew up dtcc of air and went to inject into his are. it turned out he was sight impaired and he couldn't see what he was doing with the syringe. he went to the refrigerator and pulled out two bags of insulin. and the pharmacy kept bringing medication and he said i can't seem to empty the bottle.

that's a process that he. the medication in that bottle is brilliant to we should be proud that we're able to produce that, but there are so many process failure built in what actually happened for the patient. many of us don't realize how broken it is until we ourselves or we have a relative sick lying in a hospital bed, and and 10 are more, 15, 20 different doctors common room everyday and yoyou, you slowly start to reale that none of the doctors are talking to one another and you actually know more about the care delivery process. we have incredible quality in certain areas and abysmal quality in other areas. we think of probably 100,000 people a year die inside of hospitals for preventable errors and failures. now, we do amazing things. we transplant their hearts, then we throw them out into the community and they are bewildered at home. they are lost and the call primary care offices, they get put on hold, they can't get an appointment. so i agree with what you're

saying, the product that we do is very innovative, but how all the pieces in the system at that often is a failure. >> and why is that? what causes us to have this kind of stifling process quick you would think, i mean, you mentioned the iphone. the technology advances we've had. they find ways to do it and either find ways to do it or they don't survive in somebody else comes along with a new best widget and product and makes a gazillion dollars. what is it about the medical processes that we are not finding ways to streamline process, commensurate with the products we're making? >> there's no financial incentive to do it. so if we, in get all the parts to work together to close hospitals. so there's a wonderful example of this, in a close health care system in which they are the insurer, the hospital, and employ the doctor the they get a complete redesign of the

products of all the processes of care, and for the average primary care office in north the number of patients so the average primary care doctor is 2500 patients. that's why when you go to the waiting room there's too many people there. that's why when you call, it's busy. that's why when you get in the room, you are waiting for an hour for the doctor to come in and spend 10 minutes with you. so the cat down the number of patients the average doctor has but they put and nurses back in the office and they gave a talk big chunks of time to answer the phone so if you're a patient you could make a telephone appointment or even enough the dock and get things done. they reengineered all the processes of care so every patient is hospitalized got tlc. they dropped drm hospital used on the order of 30%. now, if all we did right now and everyone of your states is drop the bad days for the hospitals by 5% of you would close them all. hospitals are in the same business that hotels and

airlines are, it's about occupancy rates. every day, every hospital in the country looks at the occupancy rate that day. so they are paid in volume. they're paid to cut -- they are very good at building service lines and marketing the service lines because of how we all pay for health care in your employee plan, in private insurance models, in medicare and medicaid. it is by large a volume-based model where there's no incentive big you are actually put yourself out of business, and there are wonderful examples around the country of innovation being shut down because it reduced volume of service. thank you. >> from a hospital person, the issue is fee-for-service. the reason we see tremendous innovation is the air that dr. brenner mentioned. and we don't see the innovation in the primary care is our system is built on a system of

paying hospitals and doctors on a fee-for-service basis. meaning the more volume you do, the more you get paid. and on the primary care side, so that means you see more patients and see more patients, it doesn't mean hiring mid-level practitioners to do other work to keep patients out of the hospital, keep patients out of your clinic. your state has done a great job, one of the states with lower costs than iowa. and we are second or third. your system and it's taken me and to state that have really taken this to integrate the care and the financing so they assume risk. and now they have a risk advance, and economic advantages a we're going to try to keep our population healthy. that is a fundamental shift this whole world is going on in health care. moving from fee-for-service or

volume to value. i think your state, where i was going, has really led many of those in that direction with integrated systems working together across the continuum. >> i would echo that to say what we're seeing with consoles, you heard me talk about provided groups were we're duplicating procedures, fee-for-service today incentivizes me as a practitioner to do more, and it doesn't pay me if i go and look at what david did three weeks ago for the same patient. so we've got to turn those incentives around. so now what we're working to is saying where all in this together. if we can bring costs down and to prove outcome, we all gain. so providers are going to look at it differently to say it's not about me doing more. it's actually about me doing less, better with what i'm doing. so not giving extra radiation to a patient is better for the patient, and i can still make myself whole by talking to and looking at the radiology that he

did, then we can turn the system around but it is merging the clinical practitioner. it is merging the payment system to match it spent governor heineman is next. >> i just like to follow up the conversation and asked a big picture issue. i understand what all of you were saying, and the men and what you think we can reduce costs. and that is are you suggesting the current system has more than sufficient funding. we just don't use the money that we have efficiently? >> we spend twice as much as any other industrialized country and cover far fewer people. i don't think the french are dying industries. i don't think the germans, i don't think this was, i don't think the canadians. i realized that each system has good points and bad points. our system act as good points and bad points as well. we are a country that doesn't like to look around the world and take best practices from

other places, and i think that's a shame, but there's absolutely enough money in the system right now. the problem is that any business that dividend change management can sometimes you have to spend a little money up front in order to reengineer everything. in order to save money on the backend. so we'll need to make some investment right now in people, and resources, in human capital, and states have an incredible role to play. the states that are at the leading edge of this are places where the governor and the governor's staff are some of the state level has banks of his own table and brought people together and been catalytic in it. >> yeah, i think, the issue is we think there is, that's my answer to your question. we think there is enough money in the system. we know that now that we're getting data, seeing it across the board we are starting to realize how we are in

effectively using the resources we have. so i think the answer is yes. i'm not quite sure if we have the data to say that, but we're are close to being able to say, i would be close to being say that, i think we are spent i would agree with that. i would caution it's not pulling the rug out from underneath providers. it's that diagram we shared where you need to gradually improved systems, releases funding that can be used. and if that gradual process happens, that's what wiki providers whole and not shut people out of business. if somebody takes an approach tomorrow, there's a new payment reform happening and we are changing it, systems will be ready to switch with that and we're going to lose quality providers. so take a cautious approach but agreed that as we make those system changes, it should be cost neutral. >> governor o'malley. >> thank you for an outstanding panel. i mean, each of you is so

insightful and, obviously, have proven your theory, and you're doing it every day and it works. and so, mr. chairman, i was reminded as i was listening to this great panel about probably 15, 20 years ago many big city mayors that we would never ever be able to get a handle on violent crime but it was just going to continue to go up, the costs were going to continue to go up. the rest were going to continue to go out. and then bill bratton, jack maple, nypd applied compstat, mission performance complaint the cops on the dots were you i do have the opportunity to rest your most recidivist violent offenders but in what i'm hearing are all of the same principles. dr. brenner, i've been following your work for many, many years, and as my second health secretary will tell you, i've banged my fist on the table often. effect my fist is damn near broken over this issue because i

see and what you are all doing. it sounds like what we need is a compstat form that takes a system that is discord made and disconnected, and makes it better coordinated and better connected, and the third thing that you sort of have to go through quickly was this notion of, call it the patient dashboard, the ability to let the patient seek, they, too, are coordinates on this. and so i'm wondering if you might elaborate further on, you know, the patient dashboard and the role that a better informed patient and one that you actually speak with plays in helping us to reduce these costs and i agree with you. i think there's plenty of money and a system. i think it's not being deployed properly. >> i think what you caught on to was an opportunity we have with

public health of, we can't solve health care issues, take the obesity issue we have in the united states as an example. we can't solve it in a 10 minute or 20 minute physician visit. and needs to be getting word out to the general public. it's used in communities and engaging and own their own health care and individuals on their own health care, and how can we employ folks to do behavioral changes that will ultimately help. so it's using all of our parts of the system. right now public health often operates very suffer from social services every separate from health care communities. what we're pulling together in transit is a stare out at you to say we need that front in education, we need the food resources available in communities to make healthy choices that we want them to make. and it is taking a systemwide approach to say we can't work in isolation. we got to bring all the resources to the table in order to get patients the tools they need to make those healthy

choices. >> what is the dashboard? is that something the i.t. or the internet allows you to do? i've seen unitedhealthcare is doing some good stuff for us in mapping that technology. what is the patient dashboard that was on -- >> the dashboard where already deployed is really a provide a dashboard. it is a way to take information, a patient record and bubble up what folks need to see in order to meet their individual specialization. there are a lot of models across the country where there's a patient dashboard. so our i.t. system does have a patient portal for individuals with a can go in and see their own labs. they can see their own recommendations, and part of the thing that is being encouraged is charting. so if we can get smarter about charting somebody's blood pressure checks, and they can see improvements over time based on intervention, if we can chart weights, there's a lot of tools that individuals, if they have computer access, can be brought

into. we are finding need to get a mentor public libraries would have access to computers, to have some of those tools. using the cell phones like you said, deploy and cell phones to remind people to take medications, but remind folks to gosh, you haven't sent in your weight or blood pressure but what we find today is again because of the payment mechanisms, positions are bringing individuals in to check blood pressure. that's a huge waste in the system we don't have enough physicians to treat providers, and there are a lot of patience tools that can be deployed at low cost. >> we are running out of time. i want to give governor markell the chance to ask the last question. >> thanks. and agree with governor o'malley, it's a terrific presentation. if i could drill in to the issue you're talking about a moment ago. dr. brenner, you said it would reduce by 5% the admission that the hospital, all hospitals will go out of business.

you then jumped in. i can see, i think this is probably the most complicated public policy challenge we have because it's just a total we orientation of an entire industry. it easier for me to understand how with providers we can start to try to make them all by moving away what has become a sick care system as opposed to bang on a fee-for-service model. and you explain though how it could work and how it does work for hospitals? and maybe for providers, putting groups together. i don't know if that's the right model or not but it does seem, i could sort of see how you do it with doctors and health care providers, but given your analogy to hotels, which seems to be a very good analogy, how do we get there on actual institution? >> i think this is where states have an important role to play.

we have essentially inflate the largest economic bubble in history of mankind. so health care is a to point a trillion dollars industry. it's 18% of our economy and the hospital a significant portion of that. as are the kind of high-tech special the portion as well. we have done that comes with a mountain of debt underline and you, the states, have underwritten a lot of that debt. so hospital bonds and guarantee of those bonds. so one approach would be to sell, it is to sell short hospital bonds because if you look at the costs of what's in this, half of the cost our hospitals and doctors. the bulk of the federal debt going forward is health care. health care will be larger than the entire rest of the spending in government. the only way to mend the federal debt will be drawing a lot of money out of medicare and cutting payments and rearranging

payments to doctors and hospitals. and hospitals being the biggest chunk of that, so, you know, we're looking at really a cataclysmic change in an industry that's just like other industries, like read too much capacity, with the underpinnings of what was going on in the economic system changed rapidly. the other analogy is psychiatric hospitals. one year we were a third of your states budgets. we deinstitutionalized psychiatric care and hope about to do is to institutionalize medical care. will move at in the committee and the question is are going to focus is on the other side. so health care is 18% of the economy. finance is housing is about 11% and finance is about seven. so think about what is going to do to the model of urban redevelopment, end of the major employment gains that we've had in health. is being built on a mountain of debt.

so if you really wrenching problem. the best way to do this will be to buy down capacity. all over the country houses are close and and private equity is going to buy them. that's going to be propped up by unnecessary occupancy paying for medicare. so, when you have a capacity problem, states ever really important role of coming in and figuring out what's the transition model so we don't have massive and employment and other problems. sequestration could be going off a cliff for a lot of hospitals. >> a couple comments. one is hospitals are rapidly becoming not just hospitals, and doctors are not just a common hospitals, in all of your states you see the rapid development of integrated systems, hospitals, doctors, payers coming together to provide better product to of this era of seidel hospital from a silo of doctors and exile of

insurance companies is rapidly changing. i support the. i think you should support the. i think that makes sense, but right now we have a food into boats. we have a foot over an and a bot over there so it is a delicate thing. my lenses says physicians, hospitals, payers are ready for this kind of conversation. the market is driving this conversation. government needs to do everything it can to advocate, support, the further development of that. and then to reward those individuals come to physicians, hospitals systems, are doing the right thing. the reality is our payment system, we have the system exactly that we designed. we pay on a fee-for-service basis. what do you get? we get more volume. that's what we have. so now what we have to do is pay for and reward those that create the value, not just micromanage

everything, but create a system that rewards the value created. >> since we're running out of time, and before we leave today i would like to provide the governors with an update on the activities and opportunities within the health division of the nga. the center for best practices but as you know the health division provides governors and our staffs with information, technical assistance, policy analysis and periodic national meetings facilitating here exchange. since 2012 the health division will focus on medicaid cost containment, health system transformation, prescription drug abuse prevention, and health workforce planning. i'd like at this time turned over to doctor tan crippen, executor to highlight some of the plan, and new initiative from the center for best practices. dr. cragin. >> thank you and thank it for inviting me today. i did want to get governments to take some the things we are doing now. and initiative we are in the

process of launching that i struck back to the presentations today. in part to die within club -- but also to invite you to tell us what else you think we can be doing to help you, the health care costs in general. most of you know, and i've met, runs our center for health practices. she is driving us of this agenda. she just lets me speak for her occasionally. so quickly, we currently have under way and initiative to try and get states together, compare notes and best practices on the abuse of prescription drugs. something important to virtually every state. it's worse in some states than others to but with that will have six or seven states that will be funded to do the meetings for a year, and will have about $50,000 per state for your own expenses. we will be putting on leadership

retreats for systems transformation of some of what we talked about today. how to change whole system within the state. about technical assistance teams going out to the states as well to work on child health care and how we limit preterm birth. so very important piece for medicaid. medicaid now pays about half of all births in the country goes directly linked to medicaid but for all kids as well. will be having a meeting next week with 41 states. so far registered to talk about the applications of the supreme court decision last week and what it means for states, what other options you have. we will launch about labor day a new website, what i think will be the first of several virtual centers of best practices. this website will be good health, case studies for virtually every state. it will have listings of what your scope of practice laws are, state-by-state, which allow

medical practitioners to do and not do. we are doing some things, working with the state of maryland on expanding dental practice, dental services, for example, because many of the medicaid kids aren't getting sufficient medical service. we have those kinds of things under way. equally importantly and more to the point to today's presentation, another of my colleagues here, steve, taught me 15 years ago when he called the bank robbers of health care, and that was you may recall willie sutton's famous bank robber was asked why he robbed banks, he asked that's where the money is. in this case, the bank robbers is where health care is, why do you look at -- the point is that for the money is if you would about cost containment. that's where the health care needs are. when you think about 20% of population driving 80% of the cost, it means the other side of it is 80% of the population doesn't need much health care in any given year. so focusing on those expensive

patients as solar panels did today is a very important piece of this. we sometimes bifurcate those folks in ways that don't make much sense but we worry about unusual use of resources, excessive use of hospitalization, or nursing homes. but we have only in the past two years began talk about how we also give these people better health. it's not just classic preventi prevention. it's more important how we take care of people. and as jeff and others have developed these models come it takes more than just a doctor. it takes more than just a hospital. increasingly we are understand, particularly medicaid population but others as well, that behavior health is a very important part of taking care of these folks in order to reduce physical health care cost. delaware knows because it's one of the few states that action integrates physical and behavioral health. not just the physical health

care site. so we are beginning, we have begun to solicit foundations and other funders for center for health care analysis that will be available for all governors. one of the first things we did and we will have enhancement software we can give you, allow you to use that can replicate what jeff has done. he talks looking for high-cost patients. most of you have the data to do it, at least for medicaid patients. some of you already do it is so it's not completely new. so will have the identification of high-cost patients as part of this initiative, and the ability to give it to states. secondly, and equally importantly and what jeff has done and as you on the panel, take beyond that, it's want to identify those high-cost patients and characterized them injuries was, whether it's whether live or what the conditions are. and by the way, most of these patients to have chronic disease a means to are not curable. they will be with you and it's not that they are end of life, they are very much alive and will be with you.

and you can do something about their health, therefore their health care. but more important than that just identify the high-cost patients. it takes to question what do you do with them. how do you treat them. there's no simple straight answer. we have some sense of holistic treatment systemwide core nation, those kinds of things. so one of the things will be doing in this new center, and we hope with the cdc and public hospitals, is putting in place some of the experiments that are already out there and some new that hadn't yet been tested across states, and have a measurement systems that we can begin to look at. what can we do to directly affect? as we all know, you know better than i, not one solution fits every state but a lot of health care is to local in nature. and the system is organized with. so we'll try to set up tests across the country in ways that will allow us to better evaluate what might work better. all that is to say, we

understand i think that health care is a dominant issue for all of us, for the federal government, state governments, for employers, and for you all, medicaid is now a driving part of the budget that state employees and state retirees are increasingly costly. it's important we address that so you can give back to the business of education of -- i want you to know we are beginning some of these initiatives. we are soliciting foundation funding and other things to help broaden and share what's going on out other states already, promote work and more extreme edition, give you software and technical support to do analysis each you need it. so we're available for all of that. ..

>> this is a huge issue, and it's one that effects us all greatly, and i think you gave us some really great insight, so thank you very much. [applause] [inaudible conversations] >> the senate energy committee this morning holds a hearing on the nation's electric grid and its vulnerability to cyber attacks. that gets underway at 10 a.m. eastern, and you can see it live at c-span3.

then at 2 p.m. eastern on c-span3, the committee or for a responsible federal budget announces its campaign for a deficit reduction agreement between congress and the president. erskine bowles, former senator judd gregg, executives from the corporate world and former world bank president bob zoellick. >> if i'm president, job one for me will be creating jobs. let me say that again. my agenda is not to put in place a series of policies that get me a lot of attention and applause. my policy will be, number one, create jobs for the american people. i do not have a hidden agenda. [applause] and i submit to you this: if you want a president who will make things better in the african-american community, you are looking at him. you take a look. >> republican presidential

candidate mitt romney and vice president joe biden spoke at the naacp national convention in houston. >> just close your eyes and imagine, imagine what the romney justice department will look like. imagine when his senior adviser on constitutional issues is robert bork. imagine the recommendations for who is likely to be picked as attorney general or the head of the civil rights division or those other incredibly important positions at justice. >> watch their entire speeches online at the c-span video library. some congressional hearings coming up this week on the c-span networks. live today on our companion network, c-span, at 10 a.m. eastern federal reserve chairman ben bernanke. he's delivering his monetary policy report to the senate banking committee. and on wednesday mr. bernanke

heads over to the house side of the capitol, testifying before the financial services committee. that's live at 10 a.m. eastern on c-span3. and then thursday on c-span3, homeland security secretary janet napolitano. she's testifying at 10 a.m. eastern at a house judiciary committee oversight hearing. >> there has been a hostility to poverty. since the war on poverty, lyndon johnson looked at poverty issues and spent money on it and talked about his social service programs. lyndon johnson. i hate to say this, but richard nixon is the father of minority business development. and inside his minority business established the small business administration and used the term economic justice. richard nixon. economic justice. >> the former president of

bennett college for women, julianne malveaux, regularly writes and comments on politics, education and african-american economic history. live sunday, august 59, at noon your questions for the author of surviving and thriving: 365 facts in black economic history. julianne malveaux in depth, august on c-span2's booktv. >> the woodrow wilson center yesterday hosted a discussion on security a along the u.s./mexico border. among the speakers, two former customs and border protection commissioners. this is almost two hours. >> joining us today for what we hope is a very interesting discussion on the 21st century border, on the notion of how we move towards a smart border, how do we deal with multiple issues involving trade, the movement of people, immigration and security, um, which often

involve trade-offs, but as we'll talk about also can involve common solutions at the u.s./mexican border. we're very pleased to welcome you on behalf of the woodrow wilson center. this is a center for advanced research. we're very pleased to have secretary alan bersin, and we're very pleased to be co-sponsoring today with csg west and particularly with the border legislative conference which has a close relationship with the council of governments west. and -- [speaking spanish] as well as edgar reese from csg west. they've been partners in many, many efforts, and i'd like to turn it over to -- [inaudible] flores to offer a few words of welcome as well. >> well, thank you very much. welcome, everybody.

from, on behalf of the board of the legislative conference, we'd like to welcome all of you to this important conference, how to build a 21st century border. i'm here with my colleague and counterpart, lou corps rea, from california, and we are sure this will be a very, very interesting conference. thank you very much. >> thank you. we will be launching today the beginning of a series of papers, eventually the state of the border report. we're doing this with the north american center for transborder studies at arizona state university. erik lee is with us from there as well as our colleague chris wilson and eric olson has have n leaving this effort.

so you'll hear about that in a minute. i'd also call your attention to something we launched last week with the annenberg retreat, u.s./mexico relations, a stronger future. has some interesting ideas on u.s./mexico relations from a very senior group of former policymakers, notables from both mexico and the united states, business leaders, society leaders who came together a few months ago, and some of them have to deal specifically with the border as well. and now it is my distinct pleasure to introduce alan bersin, chief diplomatic officer for the department of homeland security. former secretary of education in california, former u.s. attorney in san diego where he was known as the border czar. he's again known as the border czar, by the way, i should say. and he's also been superintendent of schools in the san diego unified school district, and really for the past 20, 25 years, as long as i've followed mexico, actually, has been someone who has been

intimately involved in two sets of interrelated issues. one is quality of life and related issues, also did airports for a while, if i'm not mistaken. really quality of life issues, but also how we manage the u.s. u.s./mexico board in a more orderly, intelligent and effective way. like to turn it over to secretary bersin to give us a few thoughts on how we can do this going forward and what current policy is. >> thank you. >> why don't you go up there? >> i might stand from the here because i'm going o to be referring uncharacteristically to some slides. but i want to thank andrew and the wilson center, the council of state governments for this opportunity and also to acknowledge my colleagues from dhs who are here, admiral midget, military counsel to the secretary, lou alvarez, the deputy assistant secretary.

brian albert and ben from cbp and dhs, and john and jonna, i'm glad you could make it. so the panel will focus on this extraordinary economic relationship that has developed and the social relationship that has developed between mexico and the united states long rooted in history. but if you pull out any report, you start to see some astounding figures with regard to the economy. erik lee and chris wilson published a working paper that points out for the first time that in 2011 the imports and exports between mexico and the united states in merchandise and services actually hit the half a trillion dollar mark. half a trillion dollars a year in terms of imports and exports.

since nafta in 1992 trade between mexico and the united states, 70% of which is carried by truck, has quintupled. this is an extraordinary series of economic, of economic data that show how tied we are to mexico. what i would like to do, in fact, i would project that this kind of economic growth which the panel will focus on means that for the first time in american history it has enormous implications not only for the american border, but i submit for american history. when you think about american history, most of our history from the 18th century on involved an east/west axis. it was settlement of the west, it was movement out west from the atlantic seaboard that determined much of what happened in the united states.

what, i suspect for our younger colleagues in the audience as well as for my children and grandchildren that what will be more important over the next 50 o-100 years of american history actually is a north/south influence. it's what we do with respect to mexico and canada that will actually determine the quality of life. there are those who would say that, indeed, notwithstanding the prejudices of the foreign policy elites, in fact, there is a disproportion between the commitments we have made elsewhere in the world and what we do with respect to mexico. and arguably also with respect to canada. but when you look at the fact that the north american free trade association among canada, the united states and mexico has created the largest free trade area in the history of the world

and in the world currently today that accounts for one-third of the world's gross domestic product. you begin to sense the potential and the power of north america. and north america i submit both for economic competitive reasons as well as for security reasons will be the main point of reference for the next generation or two of americans. certainly, the cultural and demographic nature of our life here in the united states hinges remarkably as robert kaplan points out on our relationships with mexico. so what i would like to do is leave that for the panel discussion and rather talk about security at the u.s./mexican border. and i do so for the following reason: in order to harness the

economic power of north america, in order to make that north american experience work with canada and mexico, we are going to have to exert efforts that are massively bipartisan in nature. that require not only the cooperation of canadian leaders and mexican leaders, canadian and mexican peoples, but also will require that the american people and that american leadership comes together to recognize the importance of north america. in order to build a infrastructure as senator correa pointed out in an earlier discussion, we have long wait times at the border. we have huge bottlenecks at the border, and these are the problems that we must overcome in order to meet the challenges of economic competitiveness if we are to compete with east asia and with the indian subcontinent

and, indeed, with brazil over time. and one says, well, how can we possibly accomplish that if you project the political gridlock that appears to exist in washington? and i would only say and this becomes more apparent to me as i get older is that we must always avoid projecting into the indefinite future the existing state of affairs. and it is not merely an optimistic view, but a, i think one grounded in experience as well as in logic that we will find the political bipart san capacity to build that -- bipartisan capacity to build that border out. and the evidence of that is we

have just completed a 20-year effort in doing that with regard to the southwest border. in 1993 began an effort to restore the rule of law to the u.s./mexican border, to take a border that had been neglected on both sides of the border, that was the scene of millions of people crossing in a disorderly, unregulated way -- [speaking spanish] back and forth across the border regularly. and if you fast forward to 2011, you recognize that through the clinton administration, the bush administration and now particularly with the emphasis given by the obama administration we have a border that has been transformed dramatically. we've gone from a border budget that was several hundred million

dollars to one that is close to $10 billion a year in terms of border infrastructure. finish the number of border patrol agents have gone from 3,000 in the 1990s to 22,000 today. the number of cbp officers at the land ports of entry will be the next focus of growth, although there has been some growth there. and i want to point out and emphasize that this was a bipartisan effort. demonstrating that we can, in fact, engage in noble, bipartisan, constructive national efforts when there is a sufficient consensus to achieve a particular end. indeed, when you look at the condition of the border in 1993 and the condition of the border today, it would rank as one of

the greatest assertions and exertions of national power comparable to other large efforts in our national history. restoring the rule of law and bringing the border under control is, is a chapter of american history that should be better understood and will be as the years go forward as we attempt to apply the same effort to the expediting of trade and lawful trade and travel between our countries. so what i'd like to do in very summary form is to take you through three phases in which this happened. in 1993 silvestre reyes, a congressman now from el paso who was then the border patrol sector chief in el paso, basically did something that had not before occurred. he put border patrol agents up

on the border, right up on the border to deter the, what was a daily crossing of tens of thousands of people back and forth from juarez into el paso. many people continuing on into the interior of texas. that began the effort that has continued. but the first phase of this was in, from 1993 to 2000. so let me ask you to put up these -- what this does is shows apprehensions between 1992 and 2011, and they're actually very interesting to analyze. but for present purposes let me put aside those who say, well, apprehensions don't tell you anything about actual numbers of people trying to cross. in fact, if you look at any law enforcement situation, first thing happens when you put a lot

of police police officers in a community is the apprehensions go up because you have more police officers able to make more arrests and observe more crime. over time you will see the number of apprehensions go down because, in fact, criminals move elsewhere. and they are not stay -- they will not stay in areas where there is high police activity or presence. so what you see in el paso in fiscal year 1993 when silvestre reyes started, there were 285,000 people arrested in el paso that year, and the only number comparable and much larger was in san diego, 531,000. who were arrested in san diego that year. and it made, it stood to reason that that was where people would cross. it was easy to cross from tijuana into san diego, then get on the 5 freeway and go up to

los angeles. it was easy to get, just cross the river at low tide which is always the case in el paso/juarez. just walk across the river and move into texas. there was no stopping until in hold the line border patrol agents got on, on the line and deterred people from crossing. and in 1994 operation gatekeeper under the same principles took place in san diego. and then in texas in 1997. what these numbers show, though, is the impact that that kind of force had. so if you watch over the 20 years from 565,000 last year there was a arrest rate of 42,000.

the difference is that in 1992 many more people were not arrested. those people who the border patrol did not arrest were simply avoiding the border patrol and going up the freeway toward los angeles. same thing in el paso. but by the time you see the resourcing of the border by fiscal year '11, that 42,000 represents a much higher percentage of people who were trying to cross and, in fact, you can -- i believe that the record is pretty clear. the same thing, look at what's happened in el paso over the 20 years. 250,000 people being arrested. fiscal year '11 10,345. that represents the large percentage of people trying to cross this that particular

corridor. so what happened over the years is that the traffic was move today different places on -- moved to different places on the border, and that's what these will reflect as we go ahead. the main, the main movement if we go to the second slide, let's go to the third one, you could see that this is the el paso, the blue is the el paso apprehension rate. the purposing is the rio grande valley further east. the green is the laredo further east from el paso, and the brown is -- or reddish -- is dell rio. in each case as the numbers came down in the two years in el paso, the traffic tended to move to the east. and what you had in 1993 to 2000 was you have two basic

phenomena. traffic was being moved from el paso east across to the sectors in east texas and then south texas, and that's what the del rio/laredo/rio grande valley; brownsville, rinosa and mcgowan. you see the movement, the numbers go up. and the same thing during the same period in san diego. as the san diego numbers start to come down, the numbers in el centro which is the imperial valley sector east of california, they start to go up, and el centro goes up, and then tucson goes up and yuma, arizona, goes up. if you go back to the second,

the second slide, you begin to see the number of apprehensions, our total in 1992 were 1.1 million. and they were spread among the sectors this way. 49% of the apprehensions in san diego, 22% in el paso. if you go to fiscal year '11 when the number of apprehensions had dropped by 75% to 327,000, you see that 13% of the, of the arrests are being made in san diego, 3% in el paso and 38% in the largest number in tucson. and that's why when president obama took over in 2008, all of this activity, you had pushed

all of the traffic to the, to the east in california, and all of the traffic east toward the rio grande valley, and what you saw was a consolidation of traffic in tucson. and that was really the second phase of the border control effort was that you could control the traffic in the large urban areas by building fences, increasing agents, increasing technology, but, in fact, what you did was you pushed it into the most inhospitable -- some of the most beautiful territory in the united states in arizona up from so nor rah -- sonora into

the desert, some of the most beautiful, inhospitable territory in the united states. and you saw this consolidation of traffic steadily 1996, '7, '8, '9, all the way through was that more and more of the traffic even as the numbers went down was going through the tucson, the tucson sector. if you go back to the first slide, you can see that very graphically in the apprehensions. so look attuson. '92, 71,000. and look at the increases. '95, 305,000. by the year 2000, 616,000 arrested being made in tucson which is then still far more than any of the other sectors.

tucson soon becomes the only sector that actually has a triple-digit, a triple-digit number of apprehensions. in the tucson sector where it gets consolidated is shown by that graph, it stays that way from 2000 to 2007. this becomes the issue. one might reasonably deduce that senate bill 1070 happened in arizona, and it was no accident that politically this was a response to the traffic that was taking place in that sector. what is also happening, though, between 2000 and 2007 is that the buildup of resources with the smart border initiative

continues to build up the assets being devoted to southwest border enforcement activity. so that when we get to the end of the bush administration and into the obama administration, the stage is set to really focus on arizona. now, arizona -- remember, the theory in san diego and el paso was to get the traffic out of the urban areas. that's why you have high pedestrian fence in the urban areas to keep people from crossing and being able to get into the urban population and take transportation northward. when you get out into the country, into the desert, you have vehicle barriers as fencing, not high pedestrian fence. but what you, what we saw was that in order to bring down the numbers in arizona we needed to

provide more resources and a concerted campaign. the president gave directions to secretary napolitano for that to happen and, in fact, the resources from 2008 by the time we get to 2011, there's been a huge increase not only in the border patrol agents that are in, in the arizona sector, but in the technology, in the aviation assets that are available to patrol a very inhospitable terrain. that has the reaction that we expected which is that the traffic came down. go back to the numbers, the first slide please, brian. so if you look attuson, -- at

tucson, it hits the high point in 2000, and then there is a decline but not a -- look at the difference. tucson has got 50% in a year when there were 858,000 arrests, tucson accounted for 378,000 of those arrests. but look at what's happened from '08, '09, fiscal year '10, fiscal year '11. 317,000, 211,000 and last year 123,000 arrests bringing it much more into line with other sectors. so the first thing that you should be asking is, well, we did are the economic fiscal crisis of 2008, and doesn't the economy explain that decline?

and i believe it does have a major role to play, but to suggest that it's only a function of the economy, i think, belies the fact of what has been happening since fiscal year 2000. and go back to that -- this one. so this measures from 1993 to fiscal year '11, the red line is apprehensions, the blue line are seizures of marijuana, and the green line are the number of agents. and if you see the decline in the number of people being arrested and the flow of people across the border, it begins in fiscal year 2000. is when you start to see the long-term, secular decline. and you will recall that between 2000 and 2007 we had quite a

robust economy and notwithstanding that fact, the number of people trying to cross illegally went down significantly. this is not to deny the economy has a role, it does to be sure, but if you looked at earlier periods, the recession in '92 in '91, '92, '90-'91 or in the early '80s, the reagan administration, you see the flows do decline a bit, but not significantly, and they recover with the economy quite quickly. so, too, here. this binational, bipartisan effort to protect the border and change the pattern of migration, i think, has been a major, a

major factor. so let's take a quick look at what we can expect in the future, and then i can, i can wrap up. the future of the u.s./mexican border is going to change significantly for a number of reasons. first and most importantly, the changes that are taking place in mexico today. the pew foundation together with the independent efforts of the migration policy institute and the woodrow wilson center have actually sketched a very dramatic change in mexican demographics and in the socioeconomic conditions that for the most part served as the push out of mexico together with the magnet pull into the united states of higher wage rates and more economic activity. but the decline in the fertility rate to 2.41 with a further

decline in the last decade compared to 6.07 in the 1970s when large-scale illegal immigration to the united states really began for the first time in our bilateral history, suggests that, in fact, the number of people in that age gap that supplied so much labor to the united states, that young, that group of young men for the most part although not exclusively men from age 18-28 is now no longer available. and when you couple that with the growth in the, in the mexican economy and other conditions affecting youth such as an increase in the u.s. literacy rate, secondary school enrollment and dramatically in

the, in the growth of the american -- mexican economy, you given to see that the push and pull factors that have defined this border for the last four decades are actually changing, and changing very dramatically and will impact what happens over the next 10-15 years in a very important way. so in many ways what mexico has come through is the first phase of the industrial revolution in the last several decades, and the first impact of the industrial revolution is to drive peasants off of the, off of the land into the cities, and then in the case where there's insufficient employment to lead to the kind of migration patterns that we've seen during the '70s, '80s and '90s from mexico. as the mexican economy continues to grow we'll continue to also

see the conditions of education and health increase so that we see the number of mexicans under the official poverty line in mexico is declined from 69% in the 1990s to just over 51% today. dramatic and impressive economic growth. what that will mean as we go forward is that we will see a decrease in the number of mexicans who are coming across the border, and we will see something that the pew data showed for the first time which is that these were the flows from the united states to mexico

during 1995-2000 and the flows from mexico to the united states. just under six times the flow of mexico into the united states. in the last five years, we've seen something remarkable which is that for the first time we see a net outflow of mexicans voluntarily and voluntarily from the united states to mexico contrasted with a number of people coming into the, coming into the united states from mexico. this data shows that, in fact, the difficulty of crossing the border suggests that more and more people have determined, my grants -- migrants have determined not to attempt a further reentry. the implications are very dramatic for both countries. so, you know, the problem,

so-called problem of mexican illegal immigration really begins in the '70s and becomes pronounced in the 1980s and '90s. for the first time since 1900, we see the number of mexican-born population in the united states declining. and that trend is expected to continue. so, too, with the mexican-born population in the united states. 6.1 million unauthorized, undocumented mexicans in the united states, a decrease of just under a million in terms of the last number of years, the number of lawfully-present mexicans remaining rell thetively stable. relatively stable. so if you might go to the two

slides, i will -- do you have the picture? so the -- go to the next one first, brian, if you might. so this is what the border looked like when i first saw it in 1993. this is, this is in southern california right -- this is the pacific ocean, this is in san diego on the parts of san diego, tijuana over here, and this is what it looks like today with road work and infrastructure that has maintained the, maintained the situation there. the next picture, though, the real challenge, and this, you know, there is for all of the enforcement activities that i've been involved in, for me it is the quality of life between our two peoples, between the mexican and u.s. peoples that count the most.

and this is the story of when it was not so difficult to cross. this is the crossing at san ysidro today, notwithstanding the rebuilding of the largest border crossing area in the world, that's the next challenge for the american people, the people of mexico and then by extension in north america to canada. we must recognize the extent to which we are a continental force and that our economic competitiveness as a nation requires that we solve this. we were able to solve increasingly with the cooperation of the government of mexico the problem of illicit activity at the border having to do with flows of migrants. i suggest that this is the next, a next great project of the, of

the, of the two countries which is to build a border that works from the standpoint of commerce as well as the passage of people lawfully back and forth. why don't i stop there and pick it up with the panel, if we might, andrew. >> thank you, alan. that was a fabulous presentation. i think that you will probably get some questions on this last part, on how we actually turn this into something that looks different. five years from now. but let me turn it over to my colleague, chris wilson, and we'll have a few, a little time for some questions for the assistant secretary. thanks so much. raise your hand and identify yourself, please, and chris will take over. >> all right. thank you very much, secretary. is it all right to take a couple questions right now? >> sure. >> all right. so we'll have a short question and answer period right now, and then we'll move into a panel discussion on the 21st century

border as well. so, please, yeah, just raise your hand and identify yourself, and we'll have a mic going around. yeah, in the front. it's ted wilkinson from the foreign service institute. right up here. >> well, i wanted to raise the fairly obvious question that senator aguilar from san diego had raised at lunch, and that is how do you develop, how do you stimulate developing the infrastructure that we need on both sides of the border to expedite both travel for tourism and trade? >> so two answers in brief. one is we have to change the way in which we process traffic and people by segmenting low-risk traffic, cargo and persons from

high-risk traffic or that traffic about which we don't know enough to make a judgment. the second is that we need to build infrastructure in less cumbersome ways. during the last three years, the united states and mexico have opened up three new ports of entry on the u.s./mexican border. the first ports of entry to be opened in ten years. we cannot move at that pace. while we will rely on the government to build the large projects such as san ysidro or to renovate nogales or to rebuild the bridge of el paso, we need to build into the calculus a lick/private partnership -- a public/private partnership method of building infrastructure. one example that's currently being worked on is in san

diego/tijuana. the rodriguez airport, airfield, the tijuana airport is located immediately on the borderline, and a group of entrepreneurs secured a permit from the state department and a corresponding permit from mexico to build a bridge that would basically go from the san diego side right into the airport. but a fee would be charged, but it would expedite chat expected to be -- what is expected to be two million americans who will use rodriguez airport, rodriguez airfield to fly to asia or elsewhere in latin america. so in brief, change the methods of processing cargo and passengers and pedestrians and, two, supplement public appropriations and construction projects with public/private partnerships.

be. >> thank you. we have another question or comment? left us all stunned, mr. secretary. [laughter] >> so am i. >> we have of a question here. >> hi. i'm claire gal her, i'm a u.s. foreign policy student at american university, and i went to a panel last week about the u.s./canada border, and we talked a lot then about some of the successes with preclearances and things like that at the canadian border. are there any plans to try to duplicate some of those here at the mexican border? >> in terms of reengineering methods of processing cargo, yes. much the same way as is being worked through with canadian border authorities, so too the obama administration working with the calderon administration, and i'm confident the pena a nieto

administration is continuing this work. u.s. customs and border protection officials in canada, in mexico so that cargo crossing from mexico into the united states can be preinspected in mexico. all of the targeting and racing management can be targeted before there's a crossing of the border. and what that then permits is the cargo can then immediately enter the u.s. transport network, the interstate system, without stopping at a, at the american port of entry. so, yes, that kind of engineering is being discussed with mexican authorities as well as with canadian authorities. with the intent being that in the not too distant future a auto manufacturer of parts in southern ontario will be able to have those parts delivered to a

auto assembly plant in mexico without stopping at any of the borders and yet being fully secured because of the preinspection and the targeting that's taken place and the monitoring that's taken place as that cargo moves from canada into mexico through the united states. >> all right. well, thank you so much, mr. secretary, for wonderful remarks, and i think we'll move into the second section of the panel. thank you very much. [applause] [inaudible conversations] >> can we just switch right here? that's okay? and we can swap you guys out. would you like to go first? is that okay with you?

>> [inaudible] >> okay. we'll pull that up. [inaudible conversations] >> so joining us today is professor chappell lawson from mit. he previously worked at cbp and is one of the minds behind some of these new strategies that assistant secretary bersin has outlined for us. he's been a thinker on this issue of u.s./mexico relations in general for quite some time, and we're honored to have you with us here today. >> thanks. if i sit here, can people mainly see? okay.

sometimes one doesn't recognize one's self in introduction. this is the case here. i'm very grateful to be included. woodrow wilson center does terrific work in taking either academic ideas and turning them into policy or policy ideas and making them sufficiently scholarly to withstand academic criticism. it's a wonderful institution. and it's always a tall order to follow alan bersin. but fortunately, i think most of what i'm going to say going to build on some of the points he already made. many years ago a debate erupted in the united states over how to handle secondary inspection of trucks coming into the u.s. from canada, and the question at stake was whether customs agents in the united states could bring the truck physically over the line in the middle of the bridge to the u.s. side where it could be pulled over into something like a breakdown lane and inspected there, or whether the truck couldn't enter the united states at all and instead had to

be subjected to secondary inspection in the middle of the bridge, thereby backing up traffic for miles a at the biddiest commercial -- at the busiest commercial crossing in the world. you'll be happy to know that sanity prevailed and, of course, the way we work it now is not the way it used to be, and we've come a long way. but we face the same basic challenge in border management today that we did then which is that supply chains, travel networks are transnational or even global, they're flexible, they're adaptable, they respond to economic come me men tearties between countries, and they're constantly changing, but borders aren't. borders are fixed, borders don't reflect economic realities or trading patterns or even, um, commercial and travel exchanges between neighboring countries. and this is a really high stakes issue to manage because facilitating legitimate trade and travel is a key element of international competitiveness. in a global economy. and countries that figure out the right regime to both secure

and facilitate legitimate trade and travel while segmenting out the bad things will win. and the countries that don't figure this out will lose. and as i'll talk about at the end, you know, this applies not just to flows of goods and people, but also to other aspects of border management like natural resources. um, and i'm going to focus just specifically on two things; one, the issue of risk segmentation to which secretary bersin alluded, and also international collaboration within north america both on the u.s./mexico boarder and the u.s./canada border because the issues are very similar. and then if we have time, i can come back to talking about natural resource management and planning ports of entry, again, something to which the secretary referred at the end of the presentation. the idea here, though, is that the goal of border management should be to facilitate lawful trade and travel while securing fraus of goods -- flows of goods and services and insuring that

bad things get weeded out while good things get let in, right? and to shift from managing lines, line in the sand like a border, to managing flows of goods and people. and to shift from a unilateral approach to a joint approach between neighbors like canada and mexico that enhance public safety for all three countries in north america. so the first issue has to do with risk segmentation. the problem here is that the great majority of flows at points of entry are kosher. right? people are complying 97-99% of travelers crossing a land border between the united states and either canada or mexico are compliant with all existing laws and regulations. and most of the violations that do exist are minor; somebody with an orange in the trunk of their car or in the glove compartment, forgetting to declare it as they drive across the border from tijuana. it's not mainly drug trafficking

or even illegal immigration. as a result, finding something bad -- drugs or illegal migrants or people with outstanding warrants, whatever it is -- is in this massive flow of goods and people across the border is like finding a needle in a hay stack, or maybe the better metaphor is like finding a chromium-colored needle in a stack of silver needles. extremely difficult to weed out. and there are basically two approaches. one of them is to adopt a universal screening regime where every person and every piece of cargo crossing the border is subjected to the same high level or screening or inspection. obviously, an enormously difficult and wasteful undertaking both in terms of the amount of energy expended on things that we know to be compliant and not devoted to things that we suspect might be risky, but also a negative effect on law enforcement, the stupefying effect of screening over and over again things that

are legitimate and getting accustomed to finding nothing in the trunk of a car that's bad. right? and that could actually make law enforcement less effective in identifying the bad things or the dangerous people who are crossing the border. so how do we get, work ourselves out of this needle in a haystack and just as the assistant commissioner suggested, the goal should be to segment the flow of risk, to take that large purple arrow at the left and divide it into, a, things we absolutely know to be bad, something like an outstanding arrest warrant against a person or a solid tip from the dea about a piece of cargo crossing the border, right? to, b, things that we suspect for a number of reasons might be higher risk even though we're not totally certain they're violate story, right? and that should be summited to further scrutiny, secondary inspection. i'm going to talk mainly about people because it's more

intuitive, but the same principles of risk management apply to both goods and people. and then, you know, c, there's going to be a segment of traffic or a segment of individuals about which we simply know very little. you know, it might be an unfamiliar shipper, a broker we haven't heard of before for cargo or person we've never encountered before. but the goal there used to find out as much new information about that person to be able to reclassify that person or that shipment as risky or not risky. and, you know, finally, separate and expedite the flow of the goods and people that we know are unproblematic, that blue arrow on the bottom, and don't expend resources on them. two strategies. the first, if you think of the haystack again, to blow off the hay, right? to get out of the system all those people we know are safe and all those cargo shipments that we know are totally reliable. you know, a shipment from one subsidiary of merck to another

subsidiary of merck or pharmaceuticals that occurs on exactly the same day of the month in exactly the same quantity every month, that's not a risky shipment. and we also know merck is pretty good at securing their own supply chains, so merck should be inducted into some kind of trusted shipper or supplier program which we already have and in the case of people, to vetted or trusted traveler programs. and i've just offered some examples there. century is the program that governs travel across the u.s./mexico border for ordinary people, fast is a program that's analogous for shipments for trucks. nexus is an gus in canada to september ri, and global -- zen try. by the way, how many people are members of zen try, nexus or global entry here? a lot of people -- shocking that he's not anymore. yule are not risks, right? and what we want is to expend no law enforcement expenses on you

so we can expend it on the 20-year-old from yemen who has recently traveled to pakistan, right? that person should receive an extra level of scrutiny that people in this room probably shouldn't, and the same thing applies to cargo. take the haystack, blow off some of the hay so you're better able to identify the needle. and the second strategy would be -- um, i don't have the slide here, but getting better finding the needle inside the haystack, and the term of the law enforcement community is targeting. that is martialing all the information available to the u.s. government, including information held by state, local, tribal or foreign partners and bringing it to bear at the moment of query by a border enforcement officer at a port of entry to decide whether that person crossing the border or that shipment entering the united states deserves further scrutiny, right? so assigning effectively a score or a rating or some metric that allows us to classify that

shipment or that person as higher or lower risk, right? and then again focusing the law enforcement resources on that relatively small percentage of crossers, of travelers and of goods that really set off alarm bells in the system if some way or another. if you want in question and answer, we can talk about exactly how that targeting regiment can be built or improved, and i believe we can make it incredibly effective for people without in any way compromising in civil liberties or engaging in profiling in the united states. we can come back to that. the general april here is get the good people out of -- the general principle is get the good people out of the system and focus on getting better at identifying the scary people and spending all your law enforcement time on them. okay, so that's the first element of collaborative border management that i wanted to talk about. it's better risk segmentation. and the second has to do with international collaboration, in this case within north america between the united states