for democrats. go ahead. >> caller: yes, i have never heard so much pessimism and all of my life about why my son can't work. as i remember the republican party has never come up with a plan and all the years that they have been in office except for president nixon. apparently he offered ted kennedy a plan and mr. kennedy took the deal but he didn't for some reason and most of the major country seem to have some sort of health care plan. mexico has a health care plan and i think it's time we did something and i'd like to see the republicans really start to work with the president to make this thing work because it's going to be here. it's the law and i think we should really get together and see if we can help people have better health care. thanks. >> guest: i would agree with the last point that we should help people have better health care choices.

that's fair but republicans don't automatically assume the only way to people -- help people is with another government program and republicans circa don't agree with this particulaparticula r government program is a good thing. again it's hugely expensive. it's very bureaucratic. even trying to get people to sign up for it they have had three years to come up with a system to enroll people and it is not working. even the democrats admit that so in terms of the republican alternative we had a republican alternative when this bill was being debated here it i helped put together. it covered the existing conditions. it did it through the creation of a secondary market on a state-by-state basis where you created a high-risk pool and you had state and federal subsidies for that risk pool for people that had a pre-existing condition and couldn't get health insurance in the private marketplace. and the idea of keeping children

on their parents health insurance until they reached 25 or 26 was and is a republican idea. we also allow people to purchase health insurance across state lines which promotes competition and again puts the person in the drivers seat that they are making the choice. it's not a mandate so republicans do have alternatives but they are not government driven and they are not mandatory. we want to give people choices and then let you decide what's best for you and your family. >> host: we are going to leave it there for the segment. we have been talking with congressman joe barton of texas. thank you for joining us.

now a discussion on u.s. health care and market competition. a panel debates whether health health insurance exchanges will increase competition and drive costs down. the american enterprise institute hosts this 90 minute event. >> thank you. welcome to the latest installment of our culture of

competition initiative here at the american enterprise institute. i am tim carney. i am a senior political columnist at the washington examiner and a visiting fellow here working on culture of competition where we discuss competition and all sorts of industries from food trucks to handmade toys to banking and health care and discuss the ways in which competition in different contexts have different effects and the pursuit of profit and not always produce value for all of society depending on the context of that. our panel today is going to discuss competition and health care. competition generally makes things better we say but some people say health care is different. obamacare will change things family did not have a free market beforehand and will things be better after obamacare. to discuss as we have a panel of experts not just in the health care but health care

competition. as you guys picked up the papers you have the full bios. i will briefly tell you their bios in the second. i just wanted to know the format here. what we do at these events is not opening statements followed by q&a. it's going to be more to be morbid discussion a question-and-answer from the audience from me from us will be more interest persists so start inking of your questions pretty much as these people start telling you their thoughts. one final note before i introduce the panelists is please make sure your cell phones are silent or off. if you want to tweet about this feel free to do so but no phones ringing or phone conversations. we have joining us elizabeth teisberg a professor at the college of school of medicine and center for health care delivery science. she is also a senior institute associate at harvard's institute for strategy and competitiveness. she co-authored redefining

health care creating value-based competition on results. we also have david hyman the chair in law and professor of medicine at the university of illinois where he directs the epstein program in health law and policy. david was a project leader for a joint undertaking of the federal trade commission and the u.s. department of justice and you can imagine how fun it must be simultaneously to try to work with two different government agencies that wants but he did and he turned out a report calling improving health care and competition and the author of the genre defining medicare meets mephistopheles. i assume that's a fantasy thriller in health care. thomas miller is a resident fellow where he focuses on health policy and the co-author of why obamacare is wrong for america and author of when obamacare fails the playbook for market-based reform. he has not been appointed to any positions in obama's department

of health and human service. he directs the project. he serves at the national advisory council for the agency of health care research and was a hill staffer and senior health policy analyst advisor for john mccain's presidential campaign in 2008. we are going to start i guess with you david. competition generally make things better. health care is different people say. those are the two clichés when it comes to the sewing health care is it true and in which waste is competition make things better? >> so the quick comeback is i wrote a 400 page report that talks talks about a friday of ways in which it could make things better and lots of ways in which the setup was not actually achieving that and so

the question to ask yourself are what are the sources of market failure because in general the competition has been a very effective mechanism for ensuring that people get what they want at the lowest possible cost. so there is obviously a whole host of factors and health care that are potential sources of market failure. informational asymmetries barriers to entry, some of them for good reasons that you have to go to medical school to be a physician. some of them for more turf protective reasons. we the local community hospital don't want a single specialty hospital to open up particularly if physicians can invest and refer their own patients to it. other sources of information, other sources of market failure include limitations on the ability to transact across state lines which is in some ways a

subset of the barriers to entry problem. the fact that is not only is it hard to tell whether you're doctor was good before you receive treatment it's hard to tell whether the treatment was the one you needed and whether was it the disaster that has occurred and then health care is obviously expensive to say the least. so for most of us if you don't have a chronic illness you tend not to come to the attention of the health care system very frequently and you can't really tell. it's not like buying a phone where you look at it every year. the stakes are higher in the consequences for getting it wrong are higher. you don't get to pick the second doctor to do the appendectomy. i once wrote i would fail any student that couldn't come up with resources for market failure it in health care but it's an important but, the

question is deadlockedeadlocked. these are sources of market failure and we have to try to remedy and limit them and make information available and try and subsidize the sorts of things we think ought to be subsidized better public goods that are going to be under provided. you can alternatively say consumers are stupid and they are never going to get better and so we know what's best for them. and then frame it in all sorts of ways to try and limit the boundaries of competition both on cost and quality grounds. and that i think you know, the fight between those two kinds of visions is animating a fair chunk of our health policy over the course of the last 40 some years. in general, the people who want to regulate more seem to be having a fair amount of success especially the federal level.

the medicare part d is in some ways a qualified exception to that. so i guess it's ultimately an empirical question but it's also a philosophical question. trying to disentangle those is part of what i think the people in the room are going to spend the next 20 years working on select me stop there. >> elizabeth, you in your books and articles write about value-based competition and fixing misaligned incentives. explain that and the relevance of that please. >> thank you. i was looking at the people standing in the back. there were two empty chairs appear if there is still somebody sitting back there that doesn't resemble a chair and would prefer to move forward. we started in on this looking at all the students in health care. it's well-known that you you don't see the kind of improvements in the health

sector that you see another health nurse that we think about occurring with competition. do you have a cell phone? it probably does a lot more for you than it did a few years ago and if you are paying more for that and you are not super unhappy because you are getting good value for it but that is not the way the dynamic in health care tends to work. we started off looking at incentives and wrote a piece on that in the early 90s but decided that you can't fix the skewed incentives in the health sector. because when you change the skewed incentives in one place they pop up someplace else. cortese calls it a grand game of whack-a-mole. as we looked at that, the solutions and changes that occurred over time we ended up deciding you can't change it in the current structure. the problem with the structure is that the services aren't

organized to deliver structured around the weight value is created for patients and families. this is business 101. you design the services or the product lines in the way that value was created for your customers and it's not like that in health care. as a result you have a structure where you can't actually fix the skewed incentives without fixing the structure. so if i could fix one thing and if you could fix one thing with a magic wand what would it be? i would change the organization and structure of health care delivery. if you don't have a magic wand how do you do that and indeed that's an interesting discussion. in the current system i don't think you can fix the incentives as it stands and we keep doing ourselves in this trap.

we either have to pay more or do less, spends more are rash and more. but that is a false dichotomy because if we make the effort to improve the value that we deliver then you can do more for the same amount of spending or you can do the same amount for less. so improving value gives us a way out of the standard of living trap. >> my question for you is how thoroughly can and should the free market principles to health care? >> we could try them. would be nice to have some competition in health care. most of the history of health care policy is how the hide prices how to suppress competition and, how to keep the incumbents relatively comfortable as opposed to the type of force changes we have seen throughout our economy. david is right about the traditional lending of market

failures. ken arrow goes on to politicize matters. we don't have as much discussion about government failure and we could speak to that as well which has a long list itself to their concerns about valued rationality of consumers. we don't think about the unbounded irrationality of government policymakers. and then the fundamental problem in health care and health care policy is getting to the concept of who really should he deciding into is the customer. up to now we know it's not the patient and the person spending a fraction of their money for the cost. someone else. the prices you see takes to see them our fall from the costs in what's going on. we have third-party payers for the party payers fifth party payers a lot of folks in the examining room or at the billing counter as opposed to the folks who might say what do do i wonder what am i getting and who is serving me better or not? the patient consumer is often

the last on the list of the parties involved. a little bit of history on this though. you think of the antitrust remedies. antitrust came late to the table in health care. it certainly endured a lot of abuses in terms of folks keeping competitors out of the field so there was some therapeutic power -- and may have exhausted the limits because antitrust is a bit of a mix which often tends to supply anti-competitive effects as much as competitive ones. the other part of the list talked about health care delivery we often think of health care competition in the insurance contacts. they are the only folks who have the white view lens even though we demonize them for other things. we will say in this case it might be retained in order to handle this. as opposed to even if you get the ideal insurance are you still getting the same health

care or as effective health care beyond the insurance coverage which is a whole other level on that front. aside from the political dominance of everybody but the consumer the distinction between public taxpayer money and private money because we are now reaching half of the health care dollar directly spent by the taxpayers in addition to tax subsidies. that's a very dominant influence in terms of calling the tune for the piper. we will pipe it laid -- pipe it out later on. there may be a threshold consideration as to whether taxpayers are getting value for their money which is always an interesting proposition whether it occurs randomly or occasionally but if you want to spend your own money how do he do that and are you able to do that in a way in which you can express your values and preferences. >> elizabeth insurers as the

ones who bring about or even employers -- you have written about that, right?. >> i think the most startling thing that i saw after writing and redefining health care was when i started working in europe and other countries central america and my co-authors worked in asia africa and south america as well as europe and the u.s. and elsewhere. the startling thing when you go from country to country you have different payment systems and sometimes two or three for countries all these different payment systems. the jaw-dropping thing is the problems in care delivery we are stunningly similar. the differin low resource settings and higher resource settings but other than that divide the problems are stunningly similar.

but that said to me and i found it surprising that with that said to me is getting the payment system right won't happen. you can't save well if you pay this way and that problem is fixed because there is no evidence for that, none. and so we need to tackle the problems in health care delivery and the structure of health care delivery. i think it's one of those things that isn't part of the way the press discusses the problem. beekie presuming that somehow we can get the payment right and it would all line up and there's just no evidence there. >> i certainly want to agree with most of that. that said i think we can get our payment systems wrong and it can go wrong and different in his shooting ways and then you get the pathologies of overpaying

for certain things in underpinning for other things as opposed to turning the screws down on everything am not trying to control quality or price per unit of service. i would have expected higher arrangements to nominate for paying people because it's hard to to design a pure system that's going to work well under any set of circumstances let alone types of circumstances in which we are delivering health care. you can sort of look at the different governmental programs. look at different governmengovernmen tal programs and you will see the consequences of different choices about financings of the medicare program historically very aggressively controlled price per service and is completely indifferent to the volume of services as a general proposition. and guess what? when you controlled price per unit of volume is an open goal

people shoot pucks into the open goal so we start driving increases in volume and services. we don't know often whether the amount that is being delivered is too much too little or just right. we can make informed guesses as to the direction but that's quite different than another program run by the federal government which is the medicaid program. which basically doesn't pay too much attention to number of services either. we can cite the managed care program but not only as aggressive about controlling costs it basically sets the price much lower than the medicare program and then guess what happens? suddenly we have access problems because nobody's willing to take most of the patients. they will end up being handled via subset of providers who are willing to specialize in that area and then you could add another federal program the veterans administration which basically laces in place on

salary and doesn't try to pay for unit of services. it has a different set of consequences. some beneficiabeneficia l features and some row costs and we can talk about each of those that people are so inclined but the core insight here as is there's no perfect way available. there are better and worse ways to do it and you shouldn't expect he will be able to come up with a magic olive that will solve things. the last point i want to make is i think elizabeth has nicely said on diversity worldwide in both financing and delivering health care services. the point that she didn't mention that as mention that is important is if you go and ask people in different parts of the world how happy are you with your health care system? you find almost uniformly high levels of dissatisfaction with one's health care system regardless of how it's financed and regardless of how it is delivered. there are some variations but in general people are not particularly happy with their health care system no matter how its it's designed. i don't think you can say the

same of other parts of the consumer products market at least not uniformly. i'm not so wild about cable and you know we can talk about which parts of the market you don't like but uniform dislike is an unusual finding. >> i've wanted to press on the idea of competition and health care and markets in health care. sort of layout something of a free-market vision and a bit of an extreme and see what the problems with that might be. imagine a health savings accounts everybody is putting money away that this tax preferred. you put in a special checking account unused health care expenses and people are encouraged to buy high deductible health plans. so you go out and you buy a health plan with a low premium but for the first family of $6000 you are paying 100%.

maybe the insurer covers something some preventative stuff but then after the $6000 you split and the insurer pays 80% of it until you reach some out of pocket maximum. the insurer covers it or maybe government covers is so setting aside the problem up the person a gets cancer or get hit by a bus or two buses and just saying what regular health care within 95% of what people are going to encounter -- you make it so people are basically paying out-of-pocket for health care. will this introduce price transparency and price competition when paul ryan spoke about something to obama obama said no because then people won't get enough and they won't go to the doctor enough. a amounting sort of health care is different for the reason that is sensitive and people don't know enough about it.

there are other arguments against this too in that poor people will get worse health insurance even if we have a safety net. with that idea high deductible health plan still having a safety net is this going to work in a way that competition for smartphones -- whoever wants to answer that first. c. i was going to say health care traditionally has been maternal a stick more mothering infants who can't walk on their own. your premise of that being a free-market competition for freer market proposition. it's not a free-market big as you would allow people to get whatever kind of insurance they want in their legitimate reasons for why people want to choose whatever subsidy of their money is being spent to buy a different type of coverage. we usually think of this in terms of middle to upper middle class values thing i want to protect myself against bankruptcy or losing my assets.

if you are judgment proof they look at it differently in terms of coverage and access to some care rather than everything. certainly to the extent that we reduce the cocoon or the bubble in which people don't know some of the costs of care by pulling back on the all-encompassing nature potential subsidies are coverage you'll get some effects. it's not dominating the market where there is more interest in can i do something other than go to the emergency room? there is certainly a corridor of decision-making in which many americans would be quite capable of using their money managing it and wouldn't make perfect decisions but the decisions thus far perfect either. we have a long track record of everyone else telling us what's good for us and that has produced the system we currently have. that would provide at least a window in that direction.

i will stop at that point. it's not the end-all be-all because the hsa approach solely is the same type of thing driving in one place as opposed to other options they may want to consider. it's a financing issue or subsidy issue and still not talking about what care you are getting or how you are getting better health through a number of steps rather than simply what is the financial transaction? >> you are right. i also work with employers quite a bit. i work with providers quite a bit too and that is what i do but one of the employers that i work with had this problem going on because they have a lot of employees using the emergency room for things that were coded as primary care services and so they said -- they transferred everybody over into this health plan so people

had first dollar exposure and then they raised the co-pays on the emergency room from 50 to 100 then from 100 to 200 from 20250 and these are plant workers. $250 is a lot of money. they are not seeing it down to at that point in use of the emergency room for things coded as primary care. but do you know when they did see a dent in its? when they opened a clinic that was available so that people could actually -- these are insured people who had no access to care the coast there was no place to go other than the emergency room. so when we talk about access as if it were only money it's partly structured and partly not just money. we need a broader look at what it is that is getting in the way of achieving what we are trying to achieve. again go back and sort of look at the popular press in this.

we talk about who pays and who is responsible for payment and talk about do they have the information they need? and we need to talk about the priority of choices that you can make because sometimes you are blocked out of access because there's no place to go. you can get an appointment with your pcp two weeks from now but if you haven't air infection going to do? but the other part of having choices is being able to choose your way into clinically integrated care that will help you with the whole problem. people get what people with diabetes is supposed to do. we have the endocrinologist to help us. some of them repeat in order to comply with what they're supposed to do for someone with diabetes. if they would like to hold a job

they can comply with all of that stuff but you can structure the care so that in one morning seven of those appointments happened. we have done that with some of them. you can change the structure so that you can make a reasonable choice but right now if you have to make 35 different choices in order to exercise the choice that you have for using your health savings account good luck. so there is a bigger problem there in terms of what alternatives are available to people. the dislike of the system is not uniform in the sense that everybody does not dislike it. it's widespread and i'm absolutely in agreement in every country i've ever been and i can find people who hate the health care system and you cannot isolate people who love it and it's easier to find people who love their doctor. the highest rates of discontent, in places where people feel the discontinuities of care. when you feel like when he went out of the hospital he got

pushed off the ledge and then have to fight your way back before you could get care again those people hate the health care system and that is what drives higher discontent in the u.s. system. when we beat beyond the first page of those reports and dive in deep it's the lack of continuity, the lack of clinical integration of care that makes it so that what we end up with is consumer coordinated care when we are trying to give people a choice. consumer coordinated care. >> some of the themes you have already heard and it's important to think about the delivery side and ask yourself how good or bad a job it's doing in dealing with people who don't get sick between 9:30 and 4:30. and they can't wait two weeks for an appointment and if they can't see someone today or tomorrow are going to go to what is often a very unpleasant place

to receive health care services which is a big-city emergency room room or even a nice suburban emergency room. you spend a couple of hours waiting and it's better now because you have a smartphone because you can play with that unless they won't let you use it. it's very inconvenient, bears expensive than the somewhat risky place to receive health care for people who often have problems that might think of them as emergencies. they might not be allowed to tap the system anywhere else so there is a tendency to focus on financing in washington but delivery is really important. the second and i want to focus on the hsa questions -- one of the first words out of your mouth was tax preferred so that is another source of market failure. we subsidize the health care system and then we are surprised in the system but the financing of the system and then we are surprised that people behave as

if they are not spending their own money. we have them all sorts of things to try and make that hard to figure out so lots of people get their health health care coverae through their employer and they perceive their employer is footing the bill when in fact they are footing it in forgone wages. even if they recognize that it's hard for them to figure out how much their employer is actually contributing even if you printed on their paychecks. life is short in their better things to do then realize that health insurance policies for a family is 12 to $14,000 depending on how rich the benefits are. so the argument for making tax preferred as we have given tax preferences out elsewhere so we need to be neutral seems to me we access a question maybe we should start rolling back tax subsidies if we think part of the problem is people are not sensitive to the cost because everyone perceives they are spending somebody else's money. the last thing that is important

to recognize and brings the points that i made together is chronic illness is responsible for a sizable share of delivery services. how much time people spend interacting with the health care system and a big chunk of the cost of the health care system. hsa's depending on how they are designed can be very effective in people that don't have major problems and you are worried about moral hazard. they will say i've got nothing better to do today. let's go to the doctor or the er for a couple of imaging studies, why the heck not? i don't want to go to the baseball game. i'm exaggerating to make a point but for people with chronic illness you blow through the cap relatively quickly so you have this interesting paradox where you structure your financing arrangement in a way that basically doesn't create any

good incentives at all for a big chunk of the people and the expenditures associated with them and the people that are low risk for getting tax subsidized money that would never has been about health care to begin was a want to think about the population for whom this will be an effective strategy. and then at least worry about the selection of people opting into or out of hsa's as long as it's not the one-size-fits-all strategy which would have its problems. >> talking about financing i think it's important to what we are really talking about is the question you are posing which is where we going to put the doughnut hole? somewhere there's going to be held spending that that is not subsidized. is it going to be the front end in a traditional high deductible hsa plan or our summer stuck in the middle giving people better preventive services are in the back and in the catastrophic

coverage? the other end of that as you think about there is more than one choice in terms of economizing the consumer. there is a choice with regard to the type of treatments you might want to have or who you go to. for more the front instead of services. that is the health care treatment choice. wind why and where do i go and who do i go to? or another decision that this is too big for me to handle. a major chronic illness or catastrophic situation that is what you select your insurance plan. what does a really mean what it will be in some houses hands and do i have the luminaries weren't going to go to and what i'm doing in a general sense? there's an older proposal that straddles this by extending the corridors decision-making. you have the high deductible if nothing else goes on and you are covered by someone else. another proposal is called major risk insurance to say let's have a wider corridor of car sharing

with income related caps in your out-of-pocket to get a bit of a progressive element in which you use coinsurance. you are seeing a lot of the bill but not all the bill. either i got a big festival or i have nothing enough the difference. just to pick up on the value proposition you need to to understand there's also a couple of components to that and that's always a juggling proposition but the main ones are whether the only cost i'm going through to be treated for not just the one time this price for this thing here and that's what i need to think about. you walk in the door and there might be a bundle of things that happen to depending on who is the real decision-maker in the delivery of care on that front. we don't care whether or not you happen to match the latest guidelines in terms of processing care for a couple of discrete services. you would like to know you are

not going to die and secondly perhaps you would feel a little bit better you won't get worse and maybe they will fix the problem so the more we get information that tells us about those types of outcomes against the overall cost that is a grand ambition.

it was primarily broadening access through insurance and there are all sorts of other stuff in there some of which is pilot projects to try to improve the quality of the care being delivered and to change the financing arrangements in the direction of shared savings or value-based purchasing under a variety of names. there are lots of pilot projects

on the delivery financing interface. there is stuff about improving the health care workforce and i.t. issues. there's all sorts of stuff in there but the harder the program is the two pieces expanding medicaid and setting up exchanges which i now i guess called marketplaces or maybe it's the other way around. the medicaid rollout has faced stiff headwinds in light of the supreme court opinion. the states can opt in or out and exchange will allow -- it has been rocky and it remains to be seen how ultimately that's going to play out. the basic claim if you listen to the administration is we are creating competition where there wasn't any before. that is perhaps true in some sense but not at all true in other senses so i left off an important part of the insurance

component is the substantive regulation of insurance delay that historically the federal government has not been involved in so the idea is to try to standardize this if it benefits standardize specific groupings and policies and then assume insurers would compete and compete aggressively once you have taken substantive policy provisions out and would get price competition because what else is left? it's going to depend on the population and whether or not people think they can actually make money by offering this. i think some major players have declined to play. so there are things which could create a particular form of competition if everything works out properly. everything has to line up more

or less properly to get lots of insurers competing offering a set of standardized products. it remains to be seen whether people ask and want many of those products for two distinct reasons. one is more expensive policies when you are paying at least some of the difference out-of-pocket. you might just take a pass on anything below the absolute minimum standard. the medicare supplement policies you see some version of this as well. the less expensive policies tend to be more popular even when there are more expensive policies available because price is salient and other components not so much. that is one difficulty. the other though is if the risk pool is unfavorable things head south very quickly. i think we just don't know yet how that's going to work out. it doesn't help that the rollout has been so rocky. what you need are people like the young people in the audience

who are healthy and can subsidize people like some of the people up here who are older. i said some. i said some. and wish to have a free ride -- no. so i think there is a lot of talk about competition and there are some things that have the potential to create competition although it's the very specific kind of competition, a competition that i will allow you to have rather than a competition that you might want in terms of the mix of policies. elizabeth. >> back to the bill overall. it's huge and so there will be parts of it that you like and

parts of it that you don't like. but you know every nation with universal coverage has lower per-capita health care costs than we do. not some of them in the most of them, all of them for efficiency. we need access to open coverage because the games won't stop as long as he can make more by playing the games. so if efficiency is what motivates you you still want to push in that direction and if they both motivate you might want to move in that direction. but if we are going to do it, clear going to succeed with making sure we have care for everybody we are going to have to change delivery. when i think about how do we do that? how to get people to stop competing for the wrong stuff and start competing for the right stuff, that is where we find ourselves tightly aligned.

we have got to measure the outcomes and measure the right stuff. if you think about it we think about health care we even spell it wrong. we spell it as one word that means treatment and you don't really want to. it's two words. its health and care and they both really matter. what we want to do -- you only want more health care if you think you will get you more health. so there is a question about can you get people to measure out comes in ways that are meaningful for patients and families and in this enormous bill there is this outcome measurement. whether the rules that are written in the implementation of it, bears eyes that question when a law passes how it will actually be implemented that there is some pretty good stuff in there on outcomes. i have got to tell you, my mom

is a physician and i was raised with my parents thinking i would be a physician and they really did not want to. i had a ph.d. in engineering and i got as far away from taking care of people as i thought i could get, right? i ended up back in health care because as a mom i felt with two kids you had extreme problems and you will never ever tell me no matter what i peter didn't pay that we didn't have skin in the game. we had skin and be at bones and i had children and parents in the game all the time. it's critically important so for me this notion of the someone have enough skin in the game when it's my babies skin and when it's my sons or my father's or my mother's or my father-in-law's skin it didn't help us to get them well. it didn't continue working well.

none of the extra financial burdens that we put on people when they were sick helped to be more responsible in taking care of our families. there are reasons to have people paying for part of it. their art but it's not because they don't care about their loved loved one's health care unless you make them pay for it. we can get that out of the popular discussion because it does not work. it doesn't make sense. >> i just want to reassure you that despite what i've written about the affordable care act i'm not totally critical of it. fortunes of the law spelling and pronunciation are remarkably accurate. in the competition sense what i've said recently in testimony and elsewhere is we have to think about what type of competition we are producing in this law. as a competition necessarily to

deliver health care at a lower price at a better value or is it from the provider standpoint what do i have to do to please the big customer, the government which has largely set the table and would like to set more the table in terms of these are the terms and this is how you succeed in this is what you have to do to remain a surviving incumbent who will be around after the dust settles. it's a transformation even further of a type of health care competition which is much more washington centric and bureaucratically government dominated that you get a greater concern to health care providers who would like to do a better job and in patients would like to receive on to understand there is different rulemakers second-place even further than what we have already had before. the dangers of this type of competitive environment are completely different academic theories. the old one was when it's over and done watch out for the poison industry.

or other areas of public utility regulation and a small game and if you were coming from from the the left people interest aren't doing what they are doing and nobody is protecting the public. the other model of this is to say it's all about maximizing political support so you might toss a few providers are health care interests over the side and they will get you votes in the next election. i tend to favor more facts symbiosis in the biological sense that there will be an enter relationship between the ancient health care relationship and the government will have to know who is dominant and submissive and who is living off of the entrails of the other one accordingly. what we are not going to see is very much creative destruction. we may seek it in the private distraction are but that's more of a political destruction which from this arises a more

efficient and better functioning health care marketplace. there's also behind most of these delivery system reforms -- these are the folks who designed this what i would call aggregation bias. we have to have really big systems because that's the way we are going to get her hands around this. it's much easier if you are looking at washington no big deal at as they have a dozen dominant players are big systems in order to make sure they got the message clearly. what you don't want us all those competitors who are messing to round up the deal. there is some validity in saying for certain types it makes sense to coordinate and integrate them have someone be in charge of what's happening. there's a point beyond its way that is much more political preference for things that are big because they were veteran of political marketplace and whether or not they are functioning economic way.

there's also i think what we haven't talked about in terms of thinking about health care delivery whether we should be thinking of it as how to get a better version of the commodity being delivered or whether in fact there is a lot of variation it's not all uneconomical or unwise variation. when you want to prescribe from on high you want to say do it this way and everybody will fall into place in that presumption that everybody will be listed above average once they have the right secret ingredients in the fall of the formula. the manufacturing process is you have better health care. in fact we know-somethings about what's going on the free health care and there are some better more since some no-brainers. from the bottom-up sense of things you might find out someone has a different way to do something and that's a scientific process and the medical process let alone the economic process.

the pilots. i often bring in the slightly kamikaze air force at this point that something is going to work. in the law there such a medley of science fair projects that if you throw enough at the wall something will stick in those will work. what's really going to happen in terms of the innovation process is they will find something and claim credit for it and hope they can scale it up. what we have seen thus far of the peer organizations mixed results but not likely to go beyond what was already working at this point. medical home. you can improve quality. not much evidence thus far that thus far the bring down cost. it's a difficult process which means you've got to get outside the bubble for someone to break in and assign it from the inside out. a couple of other quick things. transparency. this is the law which says we

are for transparency as long as it doesn't make real prices transparent. we can give you the artificial ones so it's at war with itself in terms of transparency that exley matters but we have a long effort to make value measures or quality measures are cost measures more transparent. again mostly designed by committees by way of government. something will come forward on that but in general they're still a tendency to hold this information very tightly within the political process. just today there is a letter going from good parties on the inside thing we need to open up this process for qualified entities. more people need to play in this space. it's not just reserved for a couple of folks. it's a start in that direction but sometimes things are designed by the incumbent players who don't allow you to have the vigorous competition you want. just one final thought on the

future of the exchanges. it's hard to think based on what's going on but there will be a second second station we need to know whether these will be humbled versions of the current exchange plans to do a little bit of the job but not much more to lighten the load or did they go on to stage ii more aggressively to say as proposed by some folks we can do a lot more these exchanges and expand into the larger part of the marketplace. we can improve quality through this exchanges and set down more wealth and that's the version of the health exchanges or marketplaces without market prices we ought to be worried about. that is a different type of political scheme than what was marketed and advertised for selling the love. >> i'm going to make a quick comment and elizabeth is writing down a few notes then we are going on to questions. the examiner put something together called charting the

great health care -- where the top staffers for max baucus in the house commerce committee everyone who got mentioned on the house or senate floor thank you for helping write the affordable care act. we have been tracking them as one by one they work for the drug industry the insurance industry as lobbyists or his lawyers or as consultants so one thing is the incentives for who is going to craft the next major reform in injury industry but that is i think a large part of the competition that will happen. you compete to hire up the insiders who can help you to navigate the maze of this law or persuade hhs or center for medicare and medicaid services the procedure are the products the medical device that you are selling is one that deserves a positive treatment and not the negative treatment so that is something i think that i would amplify.

one point from you before we take questions out there. >> when you think about what you are hearing from all of us we keep talking about the competition being at the wrong level. it's over the wrong stuff which is why it is so dysfunctional. even hospital system, do you want a weekend in the hospital? that's the wrong level. you don't want that, right? that's not what you go to the hospital so hospital to hospital competition is the wrong level. the the right level where value is created is where you could help with some health condition that you have and when you think about it at that level then we can use better results to drive down costs. if you have type ii diabetes and you get effective health and you don't therefore go on to kidney failure and you don't therefore go on to amputation it's a lot

less expensive as well as being a lot better for your quality of life. all of the mystery of outcome measures. i don't want you judging my dentist and whether or not i came out of the cleaning allies. you don't want the same outcome measures for everything. you want to think about what is it that we are trying to achieve for this set of circumstances and so think about that and then there are meaningful functional outcomes that patients can report. it doesn't have to be all mysterious. every little entity can report to the registries that enable providers to improve and presumably succeeding with patience is y. they went into health care in the first place. there is a virtuous cycle when we focus it where values are actually created.

>> put up your hand if you have a question. we have a microphone that will come to you. please just state your name and state your question. we probably have a lot of them so try to make it through as quickly as possible and one last note i want to brag that it every one of these offenses the audience survival rate is 100%. [laughter] >> it want to say first that this is one of the best panels i have been on health care so thank you. i wanted to go back to two comments that you made and ask the question that combines them. in health care there are problems in the health health ce system. it seems to me it's much more not the health care system is broken even though there are some problems but the health care funding is broken. on the right side that is sometimes the insurance and on the left side it's sometimes worry about the cost of health

care to government but i think the rage of the american people comes from the fact that many people to like their health care and are happy with it. that leads me to the question and it also comes from the fact that on weekends you have to go to the emergency room because there is not doctor. under obamacare want access to amd's be worse than it is under a private insurance plan for most people because obamacare and the new systems have funding for nurses and more funding for cna-somethings like that but they aren't opening up doctor schools and limiting access to general practitioners. ..

all of the preventive standards which would take of their entire workday, you will never have enough doctors to go around. we are going to have to downsize and doug to lower-cost alternative providers. that is the basic model that tends to work. we can argue of our those lines will be drawn, but inevitably, you're going to be seeing someone other than a doctor for more of your care, and we need to think about how to do that and break down some of the barriers for that occurring

without regulatory interference and folks holding on to their old protections. if you tell people they will get everything, which they're not actually going to get and free and paid for by someone else you will get more people wanting that and been previous happened. i think we will do some work around which will be satisfactory and will mediate that to some degree. >> you can answer, but to what degree do we have anti-competitive rules keeping nurses are physicist -- physician assistants during what they can do. to what degree are doctors protected? just throw that in. >> there are situations where with multi disciplinary medical teams do not bring in the people that they could bring in to help patients because of the way that the payment structures are.

the forward-looking ones bring in whoever they need and figure out how to divide up the pool of money that they get. i get out there and roll up my sleeves and work with groups on designing new care structures for various kinds of opportunities, 75 percent of spending is driven by chronic disease. if we can do better on that we can probably do a lot better. but people -- the use of multiple roles is really, really helpful. i mean, look up the divorce rate for women who have had breast cancer. it is stunning. it is a much bigger risk than death. you know, for most people with breast cancer. your surgeon probably is not the person to guide you through that you may need -- [laughter] you may need a broader team to get you to read.

people who need help with making a lifestyle change, they need to make it with type two diabetes to make is probably their health coverage, not their positions who are most able to be there with them on a regular basis on the phone talking to them. it does not all take your doctor. the stunning thing is when you work with a group of doctors and greeting in different been -- people are afraid that that will get hurt. will we actually see is that the physician relationship with the patient gets tighter because there is more support to more reach. and so their relationship with the physician dennis to tighten. and the doctors never think that is what is going to happen. the patients come and lori. we have had stuff with the

doctors come into the first meeting literally with sweat from their elbows down to their waist and we had to get into a lab coat. it is a big chain stores in one of these groups. but at the end of the day consistently we get people to say, man, this is the most rewarding day of care i have ever been involved in. i am doing -- and after a couple of months i have patience reversing their diagnosis of diabetes. this is cool. so it is different. we may have -- end up with more care being delivered by people who who are not in these, but that might be bad. demoiselle of physician i interact with their regularly. mean man. >> we normally think of markets as being good as sorting that thing out. the level of support there.

to use use tell? than the work force issue is something that people are very concerned about because if you dump the whole bunch more people into the insured market and promise them that they will get access to care, but there is no one at the other end to deliver the care, that is a recipe for a lot of unhappy people who vote. right. so did you know, there are provisions in the bill that are attempting to try and, in the long run, address some components of the workforce issue, part of the complication is it takes a long time to become a physician. there is a huge flag. we are also really bad at predicting our need for physicians. if you look at the history have predictions, we felt there would be not enough and then too many. then we went back to thinking it would not be enough. not quite a pendulum, but we are

not very good bet that, partly because we just are dividing predictions about population against what we think is a good number of doctors per person and does not reflect changes in what is the you do and how is the you go about doing it. so i think -- against the last point i would make is some level of scaling down the provision of some of the services is probably a perfectly sensible thing. the reason right -- reason why reach up clinics are appealing to people who are spending their own money and that typically see a physician, the nurse practitioner who is operating according to some standardized protocols is there open late, parking is free, prices are transparent and reasonable and they're is a section of the market from moving that. you should not assume that tells you much of anything meaningful about how to deal with a diabetic whose folks, 100 pounds overweight and as multi system

disorders. again, the notion that there is one right way to do this and all we have to do is keep hammering until we come up with it overlooks the broad diversity of preferences, problems, and the ability to pay. >> asking you a competition question, there are continuing issues of scope of practice. that is a state level issue that we don't want to address of the federal land, and there are boundary crossing lines to slight there was earlier resistance to the reach of clinics that can sort themselves out over time. no one thing. we will not have a shortage of german -- dermatologists in the future but we might still be running short of primary care physicians. that is a compensation structure issue, lifestyle, and despite a couple of years for primary care, that of goes away. >> all right. more questions. in the middle here. there we go. >> thank you very much.

my question, both of you talked about cost sharing, copays and deductibles. i have been concerned that the way restructure them as blunt. given what we have learned of the last 30 years or so about psychology and economics and how people react to prices and choice architecture, when it makes sense to move to a system where the cost sharing is more specific to the diagnosis or the episode treatment rather than the amount of time it takes the air to revolve around the sun and other barriers to doing that if it makes sense for i am putting forward. thank you. >> go ahead. >> it makes sense. and then how do you do it. traditionally they have said, if it is discretionary we will treated one way. if it is not discretionary we will treat it another way. i was outraged when they tell me the hennessy share provides open heart surgery, discretionary.

there are problems with how you implement these things. so that was one of to buy part of your question was what should be -- you know, should it be -- the thing is, i do a lot of work with big employers, and there is all of a question about should employers have a role here which is an interesting one. one of the things that they find the putting these situations where people pay more -- saving for rainy day. as a result their anything that for their chronic disease or places where they are at risk. there is a huge movement by those groups to distinguish between things that are preventing the progression of something that can get awful purses the things that are kind of one shot. and lots and lots of major

players say, look, we will pay for everything on the stuff that prevents progression of things, and that would be an example of good use of the kind of approach that you were talking about, i think. >> the paradigm or cartoon version is called value based insurance design where we have decided that something is just terrific, and you have to have it, and therefore there will be no cost sharing. they are lagging in development of designs the sake, this really is not worth it and you will probably have to pay more. it is a little bit of a buy in terms of politically more rewarding. here is what you are not getting because it does not work. a more nuanced version sometimes is done through insurance is to try to measure it is not as much in terms of the treatment but in terms of who is providing it. distinguishing among different types of panels or groups of providers, the more efficient

providers, get better results. a softer version because you get to pay for it having a preference for other than what might otherwise be the old man is scared gatekeeper approach. everyone to get to this hospital or the specialists are really want to even though it does that seem to make sense -- two limitations. you have a lot of push back on the shores from providers of market power, and hospitals have a lot of market power lately. not going away right away. and secondly, if you don't make it more transparent as to why you're doing this and what it is based on it may look like an arbitrary picking and choosing and you will get some blow back from your insured customers. it is a good concept in that larger sense how much people want to engage. we have to have an on ramp and an off ramp the market leaders.

>> buying a japanese car. >> david, do you have anything on this? >> i have another question. you talked about market power of hospitals. and, i mean, the american hospital association is the most consistent supporter of this blobby. they lobby for it, put up money. and one thing that we are seeing , at least anecdotally is a provider consolidation in small practices selling out to a joint big hospitals because -- from market forces that existed before obamacare, but they think that obamacare pushes things in that direction. wonder whether this is bad for consumers in that there is less choice among providers, you

know, bad for price competition, a choice. second, just how that might affect the interactions between providers, devised providers been hospitals, insurers, and how doctors and nurses fair if there are fewer people there to hire them. >> lots of interactions. i don't think that you want to try and explain the american hospital association support on the grounds that they are consolidated and want to become more so. it is a much simpler explanation they figure they have more people who will pay the bills rather than having to give away charity care. and a as an incidental bonus got to take out the specialty hospitals that were an important source of destructive innovation in that space. so you can explain the support so that it is much more simple. on the broader issue, you know,

a market consolidation precede the enactments in a hospital space. and it, you know, is not helped by the challenges that both the department of justice and the federal trade commission had in green challenges hospital mergers. when you lose seven cases in a row it tends to discourage you from taking another whack at that particular apple and is part of the reason why the federal trade commission started doing merger retrospective and trying to challenge consummated mergers where they could demonstrate the adverse consequences that they were otherwise only warning of. and to them with administrative proceedings rather than trying to persuade a federal judge who often was buddies with people on the hospital board. things have changed a little bit, but the challenges we have already significantly consolidated the hospital market lots of people receiving care in that setting to begin with.

there are some incentives for hospitals to further consolidate because go big or go wake would probably be a short version of tom miller's formulation. the bigger you are the easier it is for you to exert leverage against state medicaid programs and to ensure that not only are you in every insurance products that is offered, but you are not tiered because if you threaten to exit, if you are put on paper, you have to be big in order to make that step, and there are no shortage of examples of except -- precisely these sorts of strategies. they did not do much of anything . how precisely it could have. compare the separate issue. create some expenses for it to continue. some of that, again, on the one hand, on the other hand. some of that could be pro competitive if it results in

better integration of services and the fragmentation, but if all it results in its consolidation of your prices there is no real pro competitive benefit. it is just incumbent getting bigger, faster, and consumers being more soft and that was the early worry about a ceo, that there would be less the hospital dominated organizations. >> affordable care organizations. >> that is at least a theory. we are waiting to see. affordable care act. i suppose it will take the plain language. ultimately, you know, the expression in golf, let the big dog eat. in this case that the big dog at least you something for a larger providers. he is right in terms of the history to moscow consolidation. they have a few targets they can rollout, but they are running out of that. the more interesting aspect is the vertical integration with medical practices. small practices.

we have all the numbers coming in. not that they will go away entirely, but the smaller practitioners or the small group practices are rolling up into a larger entity. some of that is -- we don't need the hassle of dealing with it, but it is a bit of insulation against reimbursement cuts and you have a larger organization to shelter you as things may be a tight run. so that is an area in which i don't think people projected with that will mean, but it suggests it is artificially driven rather than a natural response to simply the countries in place. among the newer doctors there are moving in that direction. regular hours, a salary. i am out of here. i am not a businessman are entrepreneur which can take away something for medical practice. >> more questions. one more in the middle here.

>> david mentioned it that if the risk pool does not get big enough for the exchanges, they would go south. for someone like me to my work -- i am not a health care expert. how would i know that happened. health care exchanges not working. failed or somewhat. how would i know that happened to ' what it looks like? >> bankruptcies. the insurance company market access. major players and no new players coming in. >> are they allowed to pull out of exchanges? >> back again. there are contracts. so -- and you can make exit costly, but on the other hand their is a constitutional right to let show market rate of return. they fall below that and start

suing the government to recruit the losses on this. they're going to -- you will see political push back before you see bankruptcy's and the four uc litigation. you know, i think the government estimate, a government meeting this cbo estimates the 7 million people of which we expect this percentage to have a low wrist demographic. i doubt that they would want to be bound by that now, but if you don't get anywhere near it you shoes so your insurance company stocks. you know, unless you want to own a utility. >> well, i am actually european. and i come from my country,

spain, and which there is a huge growth rate. when the economy was well everything was nice and happy. everyone was covered. but now, the recession for almost three years. and the health care competence has transferred to the state. i remember very clearly a day in which the president of the capitol region in which i live came out and said we simply don't have any more money to keep this going. we simply don't. koss and average 600 euros which is per patient per day. now, i know that the affordable health care act is nothing like the european health care system. falls way short of that. what is the plan?

is it going to expand? is it going to stay the same? how are you going to avoid that system going bankrupt in the case severe recession in the future? thank you? >> well, the printing presses are back in action. so that provides some short-term release. we have not maxed out on the credit card completely. you should at least have a warm feeling in your heart that you scored so well on the who portion even though you cannot pay for it to a newsletter. look, we do not know where we will be in a couple of years. elections, further shoes to drop in terms of how this plays out. will we know from the history, early history of medicare and medicaid is, they change. they will be exactly the same system in the best world of the folks to design them. but we do have some longer-term collisions with all of the ways

in which we have racked up commitments on our credit cards that cannot be paid for ultimately command we are counting on those young folks out there to keep paying more until they run out of any money. but that will take care of the folks who are first in line to six services. that is premature formula for the moment until they're is a bit of a push back. there have been signs of that in anecdotal stories of folks on college campuses. they can get on the coverage until 26. >> the gentleman right there. >> rick martin. we are seeing -- t think that there will be any kind of competition, free-market or will the reduction of choice is really kind of offset that?

>> all this is doing is changing the buying of insurance and the care delivery is a completely different thing. so -- >> i guess doesn't it turn people into more consumers when they have -- you see how much money is in there. okay. i want to spend this money better. i will look for a primary care physician whose price looks good to me. i am going to decide the emergency room or not. in other words, it doesn't the financing change the behavior of the provider to make people want something that is open on the weekend and the affected people and spending more of their own money should lineup the market with what their designers are.

>> a couple of things. first, when we talk about patients and families as consumers, i think we are sort of indicating that we don't really get it. they may be customers or clients in some sense, but they do not want to be consumers. this is not something that we want to consume. it is a bad, not a good. and so we want to think about it. i think we want to think about it a little bit differently on that front boo. >> of want you to say more. you hear a moral argument that this is not the sort of thing that we should treat as consumers because it is so funds will. you are making a different argument that because it is not like chocolate. it is not something we want. there are all sorts of things that we have to do. i am a consumer of auto repair. i don't like repairing the brake pads on my car.

no, yes. but i am still a consumer. a lot of times where consumers of things, umbrellas. i really don't like umbrellas. i use that only to offset the negative. the same way i get to see a doctor about money problem. how is it being something that we would rather not famous studies that indicate that people always want more, but if you go past page one and actually look at it beanbags of people in those studies were given no way to distinguish between more health care and, you know, better health. there was not information about how to get to better health without more health care and that. and so we have this -- these conventional -- we have this conventional wisdom that drive some of our thinking in health

care and there's a lot of it actually that is misaligned with how people really think about it. people don't want more health care which is one of the, left to their own devices you would think when you looked at the debates, we would spend all of our time. we would spend all of our time, you know, seeking colonoscopy is. but really probably not. and the same goes with most drugs. they have side effects. >> we upset the many because it is easier to order. i am offering a proposition to improve your health. i may not be a conventional health care treatment provided. here are some other things.

just like we have people who for sometimes good reasons, sometimes bad reasons explore alternative health, all of the type of relief. we have not made that evolution to save what are you really wanted to think about for a long lifetime, not just tomorrow, not just another year, not just something happens when you fix me up and whenever expensive way possible. how do you keep that from happening. the ability of choices and to find viable services has been disgraced by the way in which we finance health care currently. >> so not withstanding what i said earlier about aids s.a. not being a magic solution and the problem, i think they can have potentially quite an offense --

beneficial consequences. it will depend on the market structure and the demand side. if you look in areas where people of pain with their own money, it makes a difference. they have to be at a reasonably appreciable share of the market, so you can, with examples where it is there is pretty good tried to tie price transparency. and it does not just have to be individual consumers as long as large employers are willing to contract the same people on a selective basis. you start to see the emergence of fixed prices for bundles of services, whether they're right bundle, that's the second order question, but all through your bypass for this flat rate it is a very different proposition. i have no idea what the bypass will cost, and i will only be able to figure out maybe six or eight weeks after you actually had the surgery. so i don't think age is say will drive much in the way of improvement on the pricing go

either because they cannot be bundled or are not an appreciable size. in other areas it works like it does anywhere else. let me give you a concrete example talk to fund drawn from a completely different domain. kidney dialysis. the federal government basically is effectively the sole purchaser for that service. most cataract replacement as well. the structure of that market exclusively reflects the way in which the federal government has chosen to pay for services, the level of services it will provide, the amount of variation that is demanded does not demand the issue is, you have to have purchaser's spending their own money who care enough about those kinds of parameters for the market to respond by providing. >> you can add on that. it -- with large purchasers you

really care about the productivity of their workforce, they can effect change, they can help create the transformation in care delivery by asking different questions them what they have traditionally asked. the traditional question has been, how cheapen our insurance be in a turnover the administration of service to someone else and stay awake. but instead they start to say, let's look at how we get really good outcomes, get people back to work fast, and get people truly healthy, then you get a different kind of involvement. one thing where we were to the edge national firm that said, we gathered them together, talked about care for people with diabetes, and the head of h.r., the national head of h.r. leans on the table and says, look, i would be delighted to pay on the order of magnitude more for primary care.

if you keep one of my employees from going to dialysis. it is considered a normal progression of diabetes to in-depth analysis. and it is killing and financially. those patients then go on to medicare. it transition into medicare, and he is right to mostly medicare begins you go on the medicare even if you are younger when you need dialysis. but the point was that they were willing to totally restructure the payment as part of restructuring the care delivery said that they can get those on board. >> this is interesting. what a lot of people, even on the right have said, as a virtue of obamacare, in some ways it pushes people from the employer basis which is in all sorts of ways command you are saying that is not necessarily part of our current employer bases, but my question is, my employer might

not want to it miss a day or week of work, but does he care about my long-held? this is not japan where you are in the same company for 30 years. >> with that argument i was making, whether you want employers in the long run or not and there are a million different arguments in along run my it does not make sense, but in the short run employers can probably create the transition's need faster and help to hit that accelerator. >> because they can be more informed and apply more market pressure? >> because they care about your health and productivity. again, this is, one of the few things that has happened that i just found john dropping. and we work with employers on changing the health of their employees, the financial return keeps coming in a way faster than i thought. he go into it and people say it is the right thing to do, take five or ten years.

nine months later, ten months later, august they have seen is 14 months later. the irs is significantly positive because it costs a lot to have people out of work and distracted while they have family members. >> final comments from anybody up here. >> well, just on that point. going to war with the army. and it looks like the employers, some of the few folks in the trenches fighting back for a private sector spin. you cannot inventing infrastructure overnight. your employer may not care. is whether your longer term are short-term. enough of a track record of the big and players trying to play a protective role, a lot more constructive to smaller employers, but you need

something somewhere. >> going down the road. >> i was just going to say thank you. have this kind of discussion and get people thinking about different aspects of what we mean by competition and how you make it functional. i have gotten on board with the conversations about whether is too much or too little come position which is not what you last. i applaud you for that. >> thank you, as well. on the employer based coverage begins that is the dominant reality of our current system, whether it remains a very different question. some years ago i wrote an article called two cheers for employment-based coverage. and maybe down to one and have chairs now, but i persuaded tom to move from one and have up to two, not by doing anything but by watching how the market has developed.

let me end with a quick end of that illustrious to me of the promise and peril of this issue. it could well be apocryphal, too good a story to have checked out, but my understanding is there are massive absenteeism the first day of hunting season at the car companies. michigan and ohio. and the people he did sort of age are discovered that there were simultaneously or immediately thereafter a spiking coronary events associated with dragging and year from where you had shot it if you were lucky enough to do that to the car to lash it and drive it home. and so, you know, you can think about a variety of strategies. one is to prohibit people from taking the day off. increase the co-payments that are associated with coronary events immediately in the wake of the hunting season started in-house. and three is, what they did is to try and face the delivery system by doing it themselves,

bringing in-house people to say, you might want to exercise a little bit before you go out hunting and not overstress yourself and take a break. you can think about all of the delivery side innovations that might be associated with employers who, the interests are not perfectly aligned to say the least, but they are not for necessarily the worst. the question you should ask is, compared to what. if employers are not doing it, who else will do it, and what is the agency mismatch that they will have with people who are getting coverage. thank you all for coming. less thank the panel. [applause] [inaudible conversations] >> white house spokesman jay carney was asked about the

problems with the health care website, healthcare.gov, and when president obama learned it was having technical issues. here is part of that exchange. >> secretary kathleen sebelius on cnn yesterday, the president was not aware of any of the problems with the healthcare.gov website before it launched. we have come to by nasa's then that there were a bunch of red flags that have cropped up before launch. i am wondering whether the president's feels now that he should have been made aware that should somebody be held accountable for giving him that information? if there was somebody giving him information was see, in fact, misinformed about the status of a launch? >> jim, thank you for that question. secretary kathleen sebelius was referring to what i have said and what the president himself has said which is that while we

knew that there would be some glitches and actually said probably that we expected some problems, we did not know until the problems manifested themselves after the launch that they would be as significant as they have turned out to be. so, you know, there was testing and there were some problems anticipated, but we did not expect them. and by we, i mean the administration did not expect the scale of problems that we have seen, which is why at the president's direction and the secretaries direction we have launched this all out effort 24 / seven with a tech surge of experts, and years coming into its -- assist the existing team to identify and isolate each problem that exists with the functionality of the website . assess with the best solutions

are to create a remedy for that specific problem and then applying whether it is increasing server capacity or writing new code to work around a situation providing greater accessibility for improvements in the user interface. these are all things that the teams currently operating and working on and making improvements to the system are focusing on, and there are tackling problems one by one, prioritizing them and addressing them. these are technical, a logistical problems that require the kind of expertise which is being -- being brought to bear. no question that we did not anticipate the scale of the problems of the website. what is also important to remember is that the website is not the affordable care act. what has been in place since october 1st and what will be in place for the millions of consumers who want the product

is the vast array of affordable health plans out there because of the marketplace is set up by the affordable care act. every day more and more americans are submitting applications, and rolling, shopping, and finding out that they have access to affordable health insurance and that they are among the 15 to 20 percent of the american people who did not have insurance in the past. they're discovering that they have options available to them that make it affordable and that will provide them, come january january 1st, the security that they have lacked in the past. while the struggle that the individuals have had with the website are extremely unfortunate and we take responsibility for them and we are working around the clock to fix the website to make that experience easier, the struggle, as i said yesterday, pales in comparison to the uncertainty that a single mom who is a

breast cancer survivor has felt every day they she has lacked insurance because she cannot afford it, has been priced out of it or insurers simply will not give it to our because she has a pre-existing condition. the end goal is making this insurance available to millions of americans in need. >> it is being reported the white house will delay the individual mandate requirement in the affordable care act by six weeks. after technical problems with the website. you can watch this entire white house briefing and all of their programs on c-span.org. >> coming up on c-span2, a house committee looks at legislation to try and banned sex trafficking in the foster care system.

>> hours after the japanese attack on pearl harbor on the radio talking with america. >> good evening, ladies and gentlemen. and speaking to you tonight at a very serious moment in our history. the cabinet is convening. the japanese a massive stock into the present at the very time that japan's air ship was bombing our citizens in hawaii and the philippines. in the meantime, we, the people, are already prepared for action. for months now the knowledge that something of this kind

might happen, hanging over our heads. yet, it seemed impossible to believe the impossible to drop the everyday things of life and feel that there was only one thing which was important, preparations tac meet an enemy. that is all over now, and there is no more uncertainty. we know what we have to face. we know that we are ready to face it. >> watch out program at our website, c-span.org / first ladies. we will see it saturday on c-span. we continue this series light monday as we look at first lady pat harmon. >> now, a congressional panel investigates sex trafficking in a foster care system. a woman who was a victim of sex trafficking at this to our house ways and means subcommittee hearing.

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[inaudible conversations] [silence] >> turn my microphone on. that might help. welcome to today's hearing. we will start with my opening statement. this staff is prepared, sort of a -- some of what i have experience in my life. they have about two pages of my experiences to share, a detective working with people on the street. i think there were trying to put me in a box to shorten up my

statement, so i am going to read from that because if i don't, i will probably get off into all different kinds of examples and stories, and it could take us awhile. i think most people know that before being elected to congress i spent 32 years working in law enforcement in king county. and i became sheriff in 1997 and left in january 2005 to come to congress. i saw firsthand the tragedies that children face when they are not cared for by loving parents. it was in the sheriff's office where i first witness the horrors of child sex trafficking , and is convinced me that we needed to do more to protect our youth at risk of abuse. and in late summer 1982, i began

a 20-year journey that would focus my attention on this issue like nothing else ever could. on august 12th of 1982, i was called to investigate the death of a young woman whose body was found in the back green river just south of seattle and a suburban can't washington. of course, i did not know then that that was the beginning of 20 years. i thought that i was investigating one murder. three days later received a call about two more bodies being found in the river, and as i was investigating that crime scene we found a third body on the banks of the river. finding these victims began our 2-decade hunt for a man he became known as that green river

killer who once caught, confessed to killing more than 70 young woman who have been involved in the sex trade. of the 48 male victims, at least 17 miners, children who had been abused or neglected, who had run away from home, who had been victimized and ultimately killed . he pled guilty to 49 murders, and like he said, probably killed 70 to 80. the sad part about this story is the family's who will never see their daughters again. lives lost, of course. people recognize that. the community did not see these children. driving from home to work and

work to home. they were invisible. so this issue is not just an abstract problem from a faraway place for me. it is personal. as chairman, i focused on how we can improve the child welfare system and help children in foster care the successful lives. one of the most devastating examples of the vulnerability of kids in foster care is when they become victims of sex trafficking. in 2010 officials in los angeles reported that 59 percent of juveniles arrested for prostitution or in foster care. of children reporting missing to the national center for missing and exploited children who are also likely sex trafficking victims, 60 percent or in foster care or group homes when they ran away. research cited by the u.s. department of health and human services shows the majority of

six traffic you experience sexual abuse growing up. victims of sexual abuse are 28 times more likely to be involved in prostitution and children who have suffered such abuse. i think everyone in this room recognizes and i know that people across america recognize that we cannot allow this to continue. we owe it to these children to ensure our nation's foster care system. it does all it can to protect them said that they can live as safe and happy and successful life. for too many kids in foster care we are not living up to that promise. that is why the topic of today's hearing is so critical to me and why i know it is important to each of our witnesses today.

i yield to mr. dogged for his opening statement. >> we are aware that nearly 150 years ago our nation banned all forms of slavery to the passage of the 13th amendment, but the protection of that promise has alluded to many children who are in slaves effectively by cruel master's. while there is not any one piece of legislation that will stop at sex trafficking of children, we cannot allow complacency to stop us from doing everything in our power to put a stop to this. our first task in this subcommittee given our jurisdiction is to ensure the child welfare system does not become a pipeline to prostitution. the abuse and neglect that children suffer before coming into foster care already make them prime targets for those who prey on children. a sense of isolation that often comes when children are removed from their homes makes them even

more vulnerable. and when children run away from home the risk grows further still. without the protection of the foster care system abused and neglected children would be even more at the mercy of creditors and six traffickers. the system needs to become more cognizant of the problem and forceful in developing strategies to stop it. i note one survey that was conducted by the los angeles probation department revealing that a majority of juveniles arrested on prostitution were in the foster care system already and that often set off an alarm for us. some policies are generally helping foster children such as better connecting them with relatives in helping to lead more normal lives. important. this subcommittee has held hearings on these issues, and yesterday we passed a bipartisan legislation to better promote the adoption of children in foster care. i expect we will hear about the

need for increased housing options for the victims of trafficking, improved coordination and collaboration among all the various agencies and programs that come into contact with children, and we need to insured children who are traffic are not treated like criminals but the victims that they truly are. in texas we have a number of champions to have worked on this. i look forward to hearing from ashley harris who has come up from texas who has worked with the state senator and other members of our legislature to deal with this problem at the state level. i particularly look forward to hearing from all of our colleagues on their recommendations for what legislative initiatives we can take and how we can work collaborative leak on a bipartisan basis to address this truly serious problem, and i yield back. >> thank you. without objection each member

will have the opportunity to submit a written statement and have it included in the record. i want to remind our witnesses please, to limit their oral testimony to five minutes. however, without objection, all the written testimony will be made a part of the permanent record. on our first panel this afternoon we will be hearing from several of our colleagues. it is sometimes unusual in a subcommittee hearing to have the interest of a number of members, so it is really an honor to have the four of you here. we will be hearing from senator t h through video presentation later on. the first panel today is the hon. erik paulsen of minnesota who by the way was acting chairman of the subcommittee last year. the hon. louise slaughter of new york, the hon. ted poe have texas, and the hon. karen bass of california.

as i mentioned, senator orrin hatch of utah we will present later. mr. paulson, you're recognized for five minutes. >> thank you, mr. chairman, and ranking member. i wanted thank you for holding this hearing today and bring light to an issue that is all too often ignored. it is easy and comfortable to think that sex trafficking happens only asset the united states, but the truth is the exploitation of our children happens every day all across the country and even in our own backyards. i recently visited breaking free , a minnesota organization run by a survivor of trafficking his mission is to educate and provide services to women and girls who have been the victims of abuse and commercial sexual exploitation and while there i had the opportunity to meet with victims and to hear there stories. breaking free has beds that are exclusively used for child trafficking victims, and i was shocked to learn, mr. chairman, that these beds are fall almost every night and they're looking for additional capacity.

the department of justice reports that between 2008 and 201083% of sex trafficking victims were u.s. citizens, and the average age of a girl's entry into prostitution or sex trafficking is 12-14 years old. that is the seventh grade. the foster care system is ripe with opportunities for predators to exploit young girls. recently the chicago tribune reported ever facilities are breeding ground to the recruitment of children into sex trafficking saying because many girls in foster care feel starved for a sense of family coming experts say it is not uncommon for them to target group homes and ground rules for prostitution by giving them attention. they often let the girls think they are dating and even used one foster child to recruit others. also more likely to become runaways or homeless at an early

age. minneapolis police grand snyder who works full-time, there is a very strong connection between runner ways and homeless youth. of the victims are a part of the population. and use to age out of the foster care system often have little or no income support from a limited housing options and now the higher risks that and about on the streets. you that live in residential or institutional facilities often become homeless upon discharge. sadly the consequences for the children are dire. girls to become victims of self -- sex trafficking face a range of physical and mental analogies, reproductive health issues campaign, weight loss, depression, ptsd, anxiety disorders, and suicidal thoughts when i talk to experts over and over again they say their is a general lack of understanding of the problems and therefore victims are not getting the proper services and care needed.

earlier this week i met with the county attorney and he said, just like domestic violence decades ago, a child sex trafficking is not getting the attention that it needs. there is not a strong awareness. people don't know that it is going on and therefore they don't know what to look for. she went on to say that in order to prevent you from becoming victims any better information as to what is happening, where, and to whom. we need to identify trends and help fill in the gaps. that is why earlier this year i introduced bipartisan legislation along with representative slaughter to help provide reliable data, particularly as it relates to children in the child welfare system. takes an important first that by requiring that each state foster care and adoption assistant plant contain a description of the specific measures needed to be taken to provide services to children or the victims of seven track -- six trafficking and also requires notification of

the proper authorities when children go missing. this information will all go to the fbi where we can keep a comprehensive database and will also classified that these victims are just that the victims, not criminals, which they are sometimes labeled as. many to make sure they're able to come forward without the fear of prosecution and given the proper care and protection and not just thrown in jail. ..