you see multiple providers in multiple settings and a bundled payment on that and then if you set a reference price at that, you really are making it very clear just exactly what is included in this price but providers are clear about what is in a bundled payment and we see that as the next-generation once we get a little bit more experience with it in his providers get more experienced taking the bundled payment and we will see appearing events as well. so with that, turning it back to you. >> thank you very much. we are next going to hear from david, who is the chief of the center for innovation at the california public employees retirement system. you may know that they do a lot more than you might think or

imagine from the title of its organization and this includes more than 3000 public schools and agencies and state employers covering more than a million and a half and david is here to tell us about the calpers reference pricing and its impact on health care and the cost as andrea has said that he might been promised that he might. we thank you for coming. >> thank you, ed. okay. i'm going to talk about this program for hip replacement and it provides health benefits for 1.1 million members statewide and that includes active and retired state employees including school districts. about a third of those end up in

the preferred provider organizations with anthem blue cross of california and we spent about 7.75 billion and the impetus for reference-based pricing was also a variety of studies in this includes for knee replacements and we looked at cost drivers and it turned out that the osteoarthritis is one of the drivers in about a third of those costs come from hip or knee replacements. in addition, 2005 through 2008, there was about a 40% increase in the cost for the shift or needs untrendy replacement. one of the other studies looked at regional variation of costs

and when we look to looked about we saw not only the regional costs but a lot of are issued within the region and we will show you that kind of variation towards the end. and we alluded to this, one of those suggest that the hospital costs have little to do with the quality -- clinical quality of ship and knee replacements gratuity was through this with reference-based pricing, you have cost driver and potential that might increase quality and the last one is the procedures could be scheduled. january 1, 2001, calpers

implemented the case for neat untrendy replacement. in addition there was a volume to the quality gates and the volume be included that they conducted 10 heads and 10 knee replacements in the previous 18 months and the value of 30,000 dollars was chosen as a threshold and i think the doctor will talk a little bit about that later today. but about two thirds of the facilities charge less than i and i includes a large number of facilities that were well known and had a good geographic representation. and when you look at the implementation, anthem that a lot of working with them on the outreach and a lot of times they

act as the steerage of the patients and a lot of outrage was done with a lot of members themselves in this includes the evidence coverage qaeda materials and also whenever there was a precertification to the patient, that included the reference-based pricing and description of the program, as well as there was time between precertification in some would call a patient and advise them of the program as well. there's lots of travel needed and so there is not actual facilities there. included is a travel benefit for a member and companion. from the very important part of this is the reference-based

pricing is only for routine procedures and many nonroutine procedures would have a medical exemption. talking about these results are mainly from a study that we did with uc berkeley and tim brown that was published in august of this year and i think is in your packet. this is looking at hip and knee replacements and the first three lines in this chart have to do with calpers enrollees. what is unique as they were able to get the non-calpers and always data as well and so we can look at us before and during the program. in the first line is a volume in the number of procedures and the second one is looking at what percentage is part of this. this includes 50% or so before

the implementation and an increase of up to about 64% afterwards. if you look at the non-calpers members, 55% before and the slightly dipped one and then it came back and i have a representation for that as well, the dark blue line being the reference-based pricing and you can see it went up dramatically after implementation of the program they can see that it was nearly the same over time. and so this is a chart for the average hip or knee replacement surgery and again for calpers members and non-calpers members. the average of all facilities we can see that basically for all of the groups that there was an increase of 2008 through 2010. the average was about 35,000 and

2010 and after that, it dropped around 25,000 were 26,000 in that range in what and what is interesting is that the reference-based pricing stayed the same from 2010 through 2012 and it was basically the same. what was surprising is this impact which went from around 43,000 dropping to 28,427,000 and after that program. by having that be that for most parts of this, the charges say the same and i have a little chart that shows that. this includes the price facilities and are stable over time and the dotted blue line which is a dramatic drop in

prices. i have one more chart with what andrew is talking about. the variation in cost, and i don't know, they show the peak dogs here, but they were pink originally and thinking hadn't gone out. but the reference-based pricing, the blue dots are for the pricing facilities that are participating in the program and the pink dots are the charges for the non-reference-based pricing facilities and we see is that in 2008 in 2009 and 2010, a lot of variation with the pink dots clustered around 45,000 in 2008 going up in 2009 and about 50,000 in 2010. then after that, the pink dots clustered around 30,000 dollars. to reduce the variation on the high-end from the bottom in of the cost for procedures stays the same.

so jumping into this conclusion is jimmy robinson concluded there was about $5.5 million savings from this resulted in an average cost of about $9000 and 26% for us and also important to note is the clinical quality and the doctor will talk about this in a while, another study that they did. the clinical quality for better or stayed the same for the reference-based people who went there to those pricing facilities. so this turned out to be a hospital markets await as much as it was otherwise. including going to this facility and changed market as well and jimmy robinson concluded 40% of

savings for future market share and then also the reduction of the crisis and so another important thing is that it's working in the market as well from 46 of the beginning 261 now in the have expanded this reference pricing and as andrea alluded to, we have these low-volume high costs for hip and knee replacements that we have moved two and 2012, 12, this more high-volume high volume and low cost procedures we are looking afrikaner counteracts, colonoscopies, we are evaluating how that's working in the den, reiterating that those three procedures are kind of a checklist, which is a cost very nation in the region and focusing on volume increase in quality increase in making the schedule substantial costs as well. we have a variety of initiatives

went around, educating the consumer and the price transparency, trying to get that information across as we move forward as well. i would like to thank you for your time today. >> thank you so much, david. >> we will hear next from teresa. she is the vice president and she is part of the total corporate awards, which most of you know is a cincinnati-based corporation that is the country's largest grocery store chain in the fourth-largest retailer of any kind in the world. teresa is in charge of the welfare and retirement and pay plans and we had some experience as well and we have asked her to share with us. >> thank you for coming today. i just want to spend a little

bit of time talking about what we are doing around the reference-based pricing and we and we have called the target pricing because we thought our associates could relate to that. so i'm might refer to it as target pricing drama discussion today. giving you information about the company, we employ about 343,000 associates all us-based and we operate in about 35 states across the country and in the company health care plan we have about 85,000 eligible associates and the rest of our associates are represented under collective bargaining agreements provided through health and welfare funds. where we innovate are within the company plan and that is where the target pricing initiative is today. so that is where i will focus on our discussion and mainly we

operate retail centers and we also have distribution centers, manufacturing centers, fine jewelry storage and we get a few eyebrows at race and we say that, but we are one of the larger jewelry chains in the country as well. and to talk a little bit about what the objectives are within our health care plan, we really focus on keeping it simple and for 350,000 people to try to understand what we are trying to accomplish with the health care benefits that we provide to them, we really focus on two objectives in the first is to improve the health of our associates and family members and we truly believe that if we can improve the health of our associates not only we also think that it is a better place to be as an organization and more productive associates and a worklife balance and

improvement. we are very focused on reducing costs in the grocery business is not one of high margins and we refocused on where we invest our dollars and $1.5 billion on health care for all of our associates in all of the benefit plans. we are focused on health and reducing costs. ..re they making or where are they able to make decisions about quality and cost as their accessing health care when they need it. so a couple of initiatives, i'm going to focus most of my discussion today on our target pricing initiative but when implemented that in 2012, we took to initiative at the same time and focused on target pricing, which is our discussion today about putting a price in place for certain services. and we focus our services on high-tech imaging.

so cat scans and mris and the like. we also at the same time put in a very specific centers of excellence program to focus on hip or knee replacement and find fusion surgery. so that typical initiative is really focus on quality of care and cost of care. target pricing as my other panelists today have talked about is not so much about quality because we are assuming that the majority of the quality in a high-tech imaging service is relatively the same. the difference is in the variation and cost. so our two different initiatives are addressing those costs, and then on the centers of excellence peace around the quality of care. our target pricing program we partnered with anthem, they are our claims administrator self-insured plan so they are very instrumental in helping us

design our target pricing and are centers for excellence program. so the target pricing program only has three levels were associates and providers get involved in making a choice about where to access a high-tech imaging service. so the first thing that we put in place is that any high-tech imaging service has to get prior authorization or precertification. so the provider or the associate would call into blue cross blue shield before a service is received. and that is where it really starts. it's on the slide, you can see the aim or high-tech imaging. that is usually where a physician or provider would get some education about our target pricing program. to help them understand that the plan has a certain threshold of how much we will pay for high-tech imaging services, and help the provider then understand where in the market can they go our way they can send the patient to stay at or below the target price.

so that is the first level and use in some of the results that's usually where most of the services will get redirected them. the second public office shopper program and that's usually where a nurse from anthem will outrage to our associates or family member who is due to get an mri or ct scan, and help them in more educated on our target pricing program to let them know that the plan will pay up to a certain level and that there are a lot of choices in the market to help them understand what providers they can go to, if they want to be at or below the target price. or if they choose to pay more and go someplace else, they can do that as well. so completely voluntary program that we do help educate both the provide and our associate as they're making the choices on where to go to get their care. then the third piece is implementing that target price. so in 2012 we started with five high-tech imaging services, and

we started only in 10 anthem states. so is technically a little pilot for us, and in terms of how we implemented it. so you see you on the slide five tests in 2012. we added a sixth high-tech imaging service in 2013, and also in 2013 we expanded it to all of the u.s. states across the country. so we were able to capture a lot more of our associates in that initiative. a little bit about the results that we are seeing. you can see here from the three levels of the program the clinical review operational activities, so that's the first level where most of the services are getting redirected to a provider who is at or below the target price. you will see the 2012 total year savings, and remember that's just 10 states for us, and in the third quarter 2012, or 2013 year to date slightly bigger but again a cross the u.s.

the middle, the shopper program, not as much savings but we wouldn't expect as much there. we hope most of the services would get redirected, and they have, prior to getting the outreach call from a nurse to an associate. actually implement the threshold of the target pricing program we have about 30% of our population that still chooses to go over the target price, and we think that comes down to education. so if you think about a lot of people when they go to the doctor still aren't comfortable questioning costs or questioning quality, questioning whether doctor sends them for service. so celebrity and about 30% of the population chooses to still go to a facility that is at or above the private market price. to give you an example of the variation in cost, in ohio, where a ct scan of the abdomen, the cost ranges from about $260, to about $2600 depending on where you go. so that education alone both to

the provider entity associate our associate is critical. right now it's all telephonic-based comments are getting them to really have that conversation with her provider is difficult but we are making progress, as you can see in her numbers and getting people educated. early and 14 we will be implement in an online tool so that people can access, cost, and quality transparency, cost information online so they can start to make even better decisions. so what we actually saw with the unit cost, when the blue rose here, the 2012 results for the 10 states where we have had target pricing in 2012, and as you can see were actually able to reduce the unit cost through target pricing by redirecting people to a cost efficient provider. and by about 12% on both ct scans and mris.

compared to all other states in 2012 where we didn't have target pricing implemented, costs actually increased for both ct scans and mris in 2012. when you break that down by the five services, high-tech imaging services that we had in 2012, you can see each of the individual services and into 10 states would target pricing in 2012. all of those went down. summit in significant. if you look at the abdomen ct right in the middle, went down by 32%. in unit price in the states where we had target pricing. compared to some of the increases in the other states for the same services. so i the same time we implemented target pricing for medical services, the high-tech imaging, we also implemented on several prescription drug categories. so i wanted to give you a little bit of the results from the prescription drug side as well. kroger has her own tv him, so we

just kroger prescription plans to help us design a very similar target pricing initiative that we had in the medical world in the pharmacy world as well. so we took three categories of drugs in 2012 and that's the ppi's and the blood glucose test strip. and 2013 we added another category. that really focuses on education at the point-of-sale. when someone is in our store, the added from us and talking to a pharmacy tech or pharmacist, really being able to get that education about the choices that they have, because if you think that some the drug categories, that an act example, huge variation in cost or we are just starting to see that drug category kind of settle out with it going generic latch up with that huge variation in cost, and not a high variation ineffectiveness in that drug category. so we've seen some really great

results on the pharmacy site as well. and here is just some statistics on what we saw in unit cost in the prescription drug side. see you can see some pretty significant cost reductions on all three of the drug categories in 2012. utilization was not significantly impacted. i think initially what some people might think of is individuals might forgo a medication because of target pricing because some of that cost may end up with them if they choose a higher cost of drug. we saw a little bit of that in that in category but other than that the utilization -- in the ppi, the utilization was down on the bit but not significantly. we are watching that closely because what we don't want to happen is we don't want people to stop medications when you need but we want them to be better educated about the cost and the quality of the services that they are receiving. >> so just a brief moment on standard of excellence, and this is the service what we did is we

looked at me replacement, hip replacement and spinal fusion surgeries, muscular skeletal decision for us has always been one of our highest categories in our medical plan. so we looked at how could we look at a cost and look at quality of care that people were receiving, and could we take a network and parents will be to be a little more and include travel expenses if someone was willing to go to a high quality cost efficient provider, or a particular joint replacement or spinal fusion surgery. and so we are able to do that. we have four tiers within the network, and we leveraged at blue cross blue shield centers for excellence or blue distinction network, and we went for the. we started with quality and added a cost component. so this is some of the results from 2012 and 2013 when we implemented that. so we had about 264 joint replacements are back using

surgeries -- fusion surgeries in last 18 months or so. in the middle to embark you can see the impacts of the cost. someone who chose to go to the highest quality, most cost efficient providers around the country, we saw about a 28-30% reduction in cost. when you include travel, so we paid for travel and very similar to what calpers is doing. again, about a 30% decrease in cost. and from a quality perspective, no adverse side effects. so potentially avoidable complications, there were none in the first year by someone going to a facility that may not be in their hometown where they had to travel for that hip replacement in the first year in 2012 we had about 20 facilities in the network so we people traveling around the country for this surgeries and had really great feedback and great experiences. and as you can see, great quality and low cost for our members, or for our associates.

over all, i was in our associates are very pleased with the program. one of the things we thought we'd hear a special on target pricing and implemented it was a lot of pushback. you are just shifting the cost to me. instead what we're hearing is thank you. thank you for letting me know that there's such a big difference in cost in my community but and if i know i can go someplace else and do the same quality at a less cost, that's good for them and it's good for the company. and so we have seen a lot of positive results and a lot of positive feedback from our associates by doing things like target pricing and centers of excellence. so thank you for your time today. >> well, thank you, theresa. very interesting. finally, we are going to from dr. michael belman. is the regional vice president and medical director for programs and innovations for anthem blue cross in california. anthem and shivered as a part of wellpoint. he's been trained as an internist, specialized in

pulmonary medicine. he's been with anthem since 96, and he's in a great position to discuss with us the role of insurers in reference pricing and their various partnerships with employers. and by the way, dr. belman made a couple of changes in this life back from the version you have in your kids. -- kits. you can get the latest version on the alliance website after you get out of here. >> thank you, ed. ..

>> i live in west los angeles where it's not only important to look healthy, you have to look good as well. [laughter] so one of the striking features was that a free-standing surgical center in 90210, just around the corner from the gucci store, in fact, was a total price of $3500 for the cataract whereas the two largest west los angeles facilities -- one an academic institution and the other a very large community hospital -- the academic institution was about 6,000, the large community hospital was 11,000. for me as a individual who paid a 20% coinsurance, the benefit

was direct to me in the sense that the coinsurance on the 3500 saved me 2-$3,000 out of pocket and it also saved them money in the sense that they paid the 3500 and not the expanded fee. so i'm telling you this because my experience, although it was relevant for me, doesn't make much of a dent in these two high-priced institutions, and it didn't save that much money for anthem. but now what we're seeing unfolding and what you've heard today from kroger and from calpers is the realization or the actualization of these differences that make a big impact in terms of the price that everybody pays because, in fact, once these expenditures from these employers starts trending down -- and in some cases it is trending down -- that makes a difference to the premiums that they charge the following year. and that's the premiums that you pay. so this is a direct impact for all of us.

so i just wanted to emphasize that because it, obviously, has relevance. i'm also using my ipad because as good as the cataract surgery was, there is no way that i can read that screen over there. [laughter] so the point that i wanted to make at the beginning is that the costs outside of premiums, co-pays and deductibles are typically unknown to the average consumer and i might say, also, to the average physician. and that's why this is an education for physicians, and i commend kroger, in fact, on making sure that the physicians know about that. because physicians are totally oblivious to what the charges are. they know what they receive, but they do not know what facilities receive, what drugs cost, etc. and, in fact, a recent article in the new england journal of medicine highlighted this dilemma and actually called the coinsurance and deductibles an avoidable side effect of treatment or harmful effect. in other words, people undergo treatments and/or receive

medications and then have the unpleasantness of finding that the charges that result or the out-of-pocket expenses are so extreme as to make it extremely difficult to actually pay for these. so this becomes very relevant in this setting. so we also know that in california the hip and knee replacements vary between 20,000 to 110,000 across the network. so you saw a similar diagram to this where we talked i think when we had the talk for the, from from cpr. and, essentially, this shows the range of pricing in california of the 110 or so institutions that provide hip and knee surgery. so it was noted that when you choose a value of $30,000, that you encompass a significant number of institutions within the network. it also included a wide geographic distribution, so if there was travel involved, it was a reasonable amount of travel and p didn't require long

distances. and this was really, i think, the basis for the number. the other point that i think was important is that we did look at at -- am i going the right way? i'm going to wrong way. there we go. we did hook at the quality, and i'm going to come to that in a moment, but essentially, the value-based purchasing design establishes the payment for elective procedures. it limits the obligation of the payer and guarantees members the ability to choose a facility that will provide services within an appropriate cost range. one interesting term that has been used is it acts as a reverse dedoesn't bl. instead of the enrollee paying a defined limit and then taking over which is the standard deductible that many of you are familiar with, in this case it turns that on its head, and the plan pays up to to the limit after which if the enrollee

chooses an institution above the threshold, the enrollee is liable for the increment. the participating hospitals were based on the procedure volume, as you heard. they met the standard regulatory standards, so they were all accredited at high levels by the appropriate external agencies. and we also have an anthem quality program for hospitals. and a number of metrics are measured across a broad range of procedures and tests and treatments that the hospital provides and outcomes that they report publicly, and it's combined into a score. all of these hospitals were participants in the anthem program. so the overall impact was the shift of members to designated hospitals and shift away from nondesignated hospitals. and i think you would, it would be appropriate to reemphasize that point, that although there was a shift to the designated hospitals, the big, the big

change was the shift away. and the decrease in total costs -- and this, i think, was a critical point how the market reacted to this -- was the decrease in cost in the nondesignated hospitals, some of which prior, immediately prior to the advent of the program lowered their price in order to be part of the network. the other point that is made in the article by jamie robinson in health affairs is that the upward cost trend from 2008 to 2010 which ran from 28,600 to 34,700 was reversed in 2011 with the advent of this program. so the really was a very striking example of bending the cost curve down which i believe is the washington phrase for, or the goal that has been set for the affordable care act. on the quality side, we use the

hospital claims to look for general complications and jenin nexts, things that -- general infections, things that are not necessarily related to the surgery itself, but if there were results from, say, heart problems, kidney problems, lung problems as a result of the surgery or there were infections like pneumonia or kidney infections, so on after the surgery and, in fact, in the designated hospitals these rates actually dropped slightly. significantly, but they dropped. there was no difference in complications related to the surgical sight itself in terms of the process three cease, the hips or the knees, there's no difference, and no other site complications like local infections or bleeding and the like. we also followed the claims for 180 days after the surgery, and it's important to note that there was no difference in the readmissions either for joint issues or for other complications in the two populations that went to the two different institutions.

and also bearing in mind again, and i should have maybe emphasized this, we're also comparing it to noncalpers ppo anthem members whose claims we also had. so as you saw in some of the slides that were shown earlier, there was this comparison group of anthem ppo members in the same geography as was the, as were the calpers pens. members. we have a number of other clients that have as a result of the successful experience we had with calpers and with kroger have also joined the reference-based benefit movement, and so i've listed some of these. it's not as important as much as the fact that there is now, i would say, a shift, and a number of large employers are embracing this program as a way to disrupt the continued increase in health care costs very largely driven,

in fact, by institutional pricing. so this has been a very encouraging development. in addition, we also have expanded it to include what kroger has included and what others have used in the past to include for outpatient procedures which are for cataracts, arthroscopy and endoscopy. so this is definitely something which has really blown the lid off, i think, the veil of secrecy over pricing together with a number of other events that have happened in the past and some recent publications including the very notorious one in "time" magazine earlier in the year which i think was also a major, major impact. as was cms', actually, release of charge masters which occurred recently as well. should also just mention, because i noted in the "wall street journal" which was left outside my hotel room this morning, an article from

intermountain, the intermountain health system run by a very, very prominent health researcher, brent james, on the current initiatives within the salt lake city region which i would imagine is most of utah to develop not what they call a charge master, but, in fact, a cost master. where they're actually developing costs of procedures based on real data and not wishful thinking and numbers plucked from thin air which has been the basis of most charge masters up til now. and i think this is the start of a new movement where cost accounting will, i think, enter the health care arena and make it much more long call and much more sane -- logical and much more sane. so that, i thought, was an encouraging development. so in summary then, our with reference-based pricing expands the barrier of medical prices, it raises the question of why

variation in procedure is justified. there are a large number of organizations that are out there collecting quality, but there is still much work to be done in this regard. it provides a useful mean of helping purchasers, members make choices that help reduce costs both for the company, for the individual. and it's definitely a valuable tool in the overall approach to bend the cost curve down. thank you. >> terrific. thanks very much, michael. we are at the point where you can have input here. there are green cards that you can fill out a question to ask one or more of the panelists, and there are microphones that you can use to vocalize your questions, and i would invite our panelists as well, if you have comments about anything you've heard or if you wanted to ask one of your panelists another question to jump right in, and let's mix it up. in the meantime, the first mixer-upper, would you please identify yourself and keep the question as brief as you can.

>> i will do both. i'm bill rogers. confident in the statement that there's no such thing as a stupid question, my first question is do all of these reference prices include the professional or physician's payment, and then my second question is how do you all decide what to do in subsequent years with your reference price? >> two good questions. >> well, the answer to the first one is, yes. it was the total claims, institutional and professional, that were included in the calculation. >> and andrea, you talked about bundled payment being a part of this calculation. >> right. so i think, um, i think in the calpers example that that's one not all reference pricing programs include both. so that's something you need to distinguish. but if you, as this evolves and as reference pricing gets paired with a bundle payment, then, yes, you'll see them be bundled together and paired together. >> so if i could just make one additional comment which, when

you look at physician reimbursement across the state -- and i'm referring now to anthem's reimbursement -- there is variation geographically minor, and in some cases if there is special expertise. but the degree of variation or the standard deviation of the reimbursement is a fraction of what it is for facilities. >> and and how about adjustments? those of you who are involved in this business, how do you go from year to year? can you ratchet down further, or do you have to take advantage -- take into account what's going on in the market? >> well, from kroger's perspective, we looked at it of the five services that we target priced in '12, we did look at the cost data for 2013. we decided to leave the target price where it is, and it's roughly around $800 for one of those high-tech imaging services. but we found we didn't really need to adjust it at in this point. but our plan is to look at it

every year because what we don't want to happen is our target price stays the same, but the cost of services continues to go up. so we need to adjust that, and we will as we need to as we move forward. but our hope is that it brings down the cost and that we have more and more people staying at or below that target price wherever we can. >> okay. yes, ma'am. >> hi. sandra -- [inaudible] from senator heinrich's office. i believe it was mentioned that education was the variable that was distinguishing between those who were opting for reference or target-based procedure or facility and those that weren't. and i'm wondering if there's any evidence of that or evidence of any other variables that would distinguish between folks who do and don't and also providers who opt for that and don't. thank you. >> well, i'll talk about it from kroger's perspective. we have anthem after every individual that does have an mri or that's going through our target price program. they're actually surveying them

and asking them a series of questions, did you know about the program before you had the service, do you understand how it works. and what we're finding is that there's a vast majority of people that didn't understand it. so i think there is a big education component, getting people to understand, one, what their benefits are because it's complicated, you know? they understand deductible and coinsurance, and anything past that they don't. it's complicated. so having that initial education up front, we do a lot to the communicate to our associates on their benefit plans and give them access to a lot of resources. but it's going to take some time, i think, to really get people to understand that they do have choices to make and that there is a lot of variation for certain services in the health care system. so we're going to continue to educate and continue to give them access to resources. i also mentioned i think that right now we don't have an online tool where people can go to get information about cost and quality of providers in

their community, and we will be implementing something like that in the first quarter of 2014 so that a they can access information before they go to their providers and before they have to get a particular service. so we're hoping that will help further educate people. >> okay. david? >> pretty similar to calpers' situation as well in terms of we -- anthem does a patient experience follow-up study in looking at members' knowledge of the program and all of the follow-up questions and their awareness. so similar to kroger, we're rolling out in mid 2014 a much more web-based and mobile tool to provide cost and quality information as well. >> okay. well, you've unleashed a tremendous volume of questions on green cards, and we're going to plow right in. a lot of them are very basic and i think will help fill in some

of the blanks in the people's knowledge. how do insurers handle complications in procedures that extend the costs above the reference price? and are consumers forced to accept that burden? >> right. so the reference price is for routine procedure, so if the procedure becomes non-routine, it would not fall under the reference-based pricing program. and i think you see that when i was showing some of the variation in the chart. some of those dots are outside of the 0,000 or above -- 30,000 or above that, and those are falling into the non-routine procedures which are not excluded from the way the claims data is set up. >> before -- don't forget what you were going to say, but i did want to follow up because there's another question in the be pile that asks about how you work that medical exception. does it happen before or after? how big is the acquisition between the two -- the division

between the two categories, that sort of thing? >> my understanding is that it works through, it's before, and it would also occur after, say the colonoscopy gets in, and they need to do some other procedure. >> right. it's a question of communication between our case manager and the calpers staff so that the aberrations or the exceptions are picked up and then can be dealt with. >> okay. andrea? >> i was just going to say that so when it falls into the exception and outside of the reference price, the normal cost sharing would apply. so just to round out the story that if you're outside of the reference price, meaning you're an exception to the rule that would qualify you, then your normal cost sharing and your benefit applies. >> and could i -- actually, one of the questions that came in before ties into that, that line of observation, and that is, um, you're talking about major

procedures with potentially thousands of dollars even in the co-pays. how do these potentially large out-of-pocket expenses square with the out-of-pocket limits that are supposed to go into effect in the affordable care act next year? which i think are something like $6400 a person per year? or has no one -- >> my impression is that at present this particular program where there are options to go to a reference-based -- a facility that is designated within the reference price range is not the same as the standard open-ended out of pocket when you go to any number of institutions. so there is the choice that the member has here to make, to stay within the range of the expenses. that's my understanding of the current perception.

>> and i rephrase that, that means if the patient chooses a nonparticipating program that doesn't meet the price point, whatever that excess is does not count toward the whatever hundred dollar out-of-pocket limit in the aca? is that a fair reading of what you just said? >> that's my understanding. >> okay. >> that's my understanding as well. i think we have some, i think there's some resolved interpretations because one of the things as representing purchasers, purchasers work with many health plans around the country, and not all health plans are equipped or able to -- or want to implement these kinds of programs. so i think there are different interpretations around that particular issue. which, you know, is maybe health plan dependent. it could be other variables about why someone won't

implement it unlike wellpoint that has decided that it's viable. >> question, another question about prices. how do you monitor whether the prices rise for the nonreference price procedures? that is to say, is there some sort of cost shift going on? >> well, i'm sorry. >> go right ahead. >> i will jump right in. when cpr's been advocating for reference pricing or at least encouraging our purchasers to use it a as a strategy, the criticism is, well, that's -- as i said before, it's a really blunt instrument to use in the marketplace, and you just whack at it, and now you've disrupted the market. but the, the reality is that, you know, employers do have to kind of stand up and say, you know, we're not going to tolerate the variation anymore. and, you know, i think when you,

when you send that message into the marketplace, they're going to respond with a shift this volume. and when there's a shift in volume, then you see a change this behave. in behavior. >> and sort of a variation of that same question has to do with the impact on physician incomes. has there been pushback from physicians on this aspect because the total amount is higher -- is lower than it would have been otherwise or volume isn't flowing to the hospitals where they have privileges? have you heard anything like that? >> i can't -- from no? >> i think anecdotally, the orthopedic surgeons have all been pretty positive in terms of coming fort in terms of participation -- forth in terms of participation programs. as was mentioned earlier, the variation in costs have little to do with the professional fees that we see. so there's a little less, you know, pushback from that.

>> okay. >> just the one point i would make, i think it's logical to assume there's going to be disruptions, and that's clearly part of the goal of these innovations is to reduce the cost trend. and a number of stakeholders will get impacted through various interventions. this one happens to possibly impact physicians to some extent and facilities, but there are others that impact individuals' plans and so on. so i think we're all in this together that we're searching for ways to come to, you know, reasonable adjustments to the fact that the trend has to come down. but it does raise the issue both with bundle pricing and with reference-based men b fits that -- benefits that in this case we assume that the physicianing's decision to operate is correct -- physician's decisioning to operate is correct and the procedure gets done. so, well, maybe you didn't even have to do it. it's all very well to have

reference-based prices, but you can make it up on the volume. and so everybody, and so the physicians would certainly come out equal in that setting. so it's encouraging to see that some of the quality metrics that are being developed -- and there are registries now being developed around the country, there's one in california, the california joint replacement registry -- which will, which is collecting data on preoperative and postoperative enrollee function, pain, etc. so that these indices can be incorporated into the decision-making process. so when the surgery is decided upon b, it's based on some rational information. and there's tracking of provider performance in each of these metrics. >> and, of course, kroger program has a reauthorization -- >> we do. and i think the disruption is exactly why we're doing what we're doing. we want people to understand that there is a variation in cost that isn't necessary. and so the more that we have

providers calling anthem questioning why the slower the volume going a different direction is great. that's exactly what we want to happen. >> andrea? >> yeah. i was just going to follow up on a point that dr. belman made cans, you know, will -- there is a risk of the payments being made up for on other services. but i think if you speak with a hospital cfo, they will say, well, i know what my margins have to be, i know that if i'm going to take a hit over here, a haircut over here, i'm going to have to increase something somewhere else whether it's on rice or utilization or volume. and i think there is the risk of that happening. i don't know that we have any evidence of it, of that sort of shell game actually happening. i think the insurers once they have a little more experience with reference pricing and as they see how charges if they

have their payment tied to charges and those change, then they will, you know, we'll have a little more evidence of whether there is that kind of cost shifting within a facility's procedures. but i think the, it's -- while it can happen, it should not limit the first step which is to implement the reference pricing on front end. >> yes. david? >> yeah. we get the same question as well for the hips and knees, kind of looping back around. as you saw in our muchs, we didn't actually see an increase in volume over the time, and then on the other three procedures that we're looking at, i think we've seen a little bit of increase in colonoscopy, but that necessarily isn't a bad thing. that's, for screening like that, it's probably a good thing. >> be okay. yes, ma'am. >> my name is lisa summers, i'm with -- [inaudible] health care institute, and my question is for andrea or anyone else on the panel, but particularly given cpr's work on

pa a alternativety care payment reform, certainly ob care is not entirely elective. once you're pregnant, you have to deliver, but women certainly have months to shop for prenatal care and delivery services, and we know there's huge variation in cost and quality. and it's a very high frequency occurrence with four million births a year. so i'm interested in whether or not any of you are looking at reference pricing for maternity care, and if you have thoughts about whether or not the lessons we've learned from the global payment in ma a alternativety care -- which is somewhat like bundled care -- informs this discussion at all. >> so i'll start by saying that so far i think while we work with some very progressive employers, they sort of self-select to be that way by being part of catalyst for payment reform, i don't know that maternity care will be, maternity care services will be

at -- that's probably farther down the road in terms of reference pricing. i think maternity care is much better suited for bundled payment or a blended payment methodology because you have so many parts of, you know, you do have time to look around and shop, but you also have many providers within that system. and then once you're in the facility delivering, there are other variables that can come into play. so i'm not sure that we'll see reference -- maternity care be a reference price bl, if that's a word, benefit. it may be, but i haven't seen it yet. i think it's more appropriate for different kinds of payment reform like bundled or blended payment. >> the one comment i would make is that, you're right, that there is wide variation. we haven't looked at bundled or reference-based pricing, but because of the wide variation in, for example be, c-section

rates amongst hospitals which in california range from 22 to 50% and the appearance or the fact that there is now a decreasing but up until now a fair number of women who were induced, where labor was induced prior to the 37th week or just shortly after the 37th week, between 37 and 39 weeks which is now recognized as a non-- actually, a counterindication. if there were no other complications, a term should be 39 plus. and the rate of these non-medically indicated, premature deliveries has gone down dramatically, but that particular target plus the c-section rate, be the those are reduced, can reduce costs enormously because a large number of those infants end up in the intensive care unit where costs are astronomical. so one of the early successes

we've had is, in fact, with reducing c-sections and with reducing premature induction of labor where it's not indicated. so that can have a big impact on total costs and out-of-pocket costs. >> and this is -- i'm sorry. this is actually an area where the private sector can learn from medicaid, because we have several state medicaids, and we just did a, we just released a case study on south carolina's birth outcome initiatives where it's not a reference pricing ram, but it is a non-payment policy for early elective inductions. and so the, you know, the commercial private sector could learn a lot to reduce those c-section rates and the early elective inductions which are a major cost driver. >> yes, go right ahead. >> hi. my name is -- [inaudible] from the national academy of social insurance. and i have two short questions. so in addition to consumer education, are there a new set of challenges for implementing

reference pricing for orthopedic and other health care services versus implementing it for trucks and pharmaceuticals? and then -- drugs and pharmaceuticals. and be then really quickly, my second question, are there examples either at home or abroad where reference pricing has not worked in bringing down the cost of care or in bringing down the quality? >> i think reference-based pricing, target pricing is still so new that it's hard to say, um, you know, where it hasn't worked right. we're all kind of in that version one type of initiative where we're just trying certain things. we're trying different things between calpers and what kroger's doing and what other employers are doing. so i think it's early to tell where it's not working. i think in kroger's results we've seen positive results both on the quality cost side and from feedback from our associates. so we haven't seen any one of the things either on the pharmacy side or the medical side where it's not working yet, but we're certainly watching

things like it here on the pharmacy side because, like i said before, we don't want people to forgo medication when they need it because of cost. so we need to look at that very closely and make sure that's not happening. but right now we haven't seen anything negative or something that's not working yet. >> in our research, we haven't found either at home or abroad. i think at home it is too new. abroad where reference pricing on druggings has been, um, quite common, i haven't read anything that would indicate that there was a decrease or that it didn't decrease costs and it also decreased quality which we want to improve quality. on the consumer education piece, i don't know if anyone on the panel can answer that question. i don't know that there is -- there are different challenges for implementing different types

of reference pricing programs, so it's obviously, when you're implementing a reference pricing program for hip and knee replacement which is far more complex than just a lab test or imaging, you know, there are lots of variables in there. the consumer education piece has to be tailored to the type of service, or if you're doing multiple services, it has to be tailored to it. i don't know, you know, i think a lot of it would -- it's around medical literacy and being able to articulate something in an easy-to-understand way whether it is a lab or a knee or hip replacement, but it's highly dependent on the type of service. >> i think the other thing is it's easier to know or ask about the cost of a prescription drug than it is to know about the cost of a medical service. so when you're going to the counter at a pharmacy, you can ask about different costs for different levels or categories of drugs, the generic versus a brand name, etc. and it's not so easy on the medical side. you have to do a lot of digging

and a lot of research to even know where to go to get cost information on the medical side. so it's a little easier on the pharmacy side today, but we're hoping on medical side it gets to be just as easy so that people can make better choices. >> a couple of times in the last few minutes we've talked about elect i versus non-- elective versus nonelective health expenditures, and we have a specific question asking if we have some sense of what share of health care spending is elective as opposed to trying to negotiate while you're in the ambulance on the way to the emergency room. >> i don't know the proportions of spending. >> i have no idea. >> could find out. >> could find it, but -- >> and since chronic care counts for such a large percentage of spending particularly in medicare, does that count as elective or not?

one would think that if you're taking a preventive drug or going through some sort of service to keep you from worsening in your diabetes, that that would not necessarily be elective. >> well -- >> could you apply that, apply reference pricing to those kinds of things as well? >> so in the kroger program on the pharmacy side, it's any script in those four categories of drugs. on the medical side with the high-tech imaging, we don't do target pricing for children. although we're finding that what's happening with our associates and their family members who are over the age of 18, they're starting to ask questions when their children need an imaging service. so that's good. and we're also not doing it on emergent services. so don't really call it

elective, right in you're getting an mri or a ct scan and it's not a an emergency, target pricing's going to apply. >> david, do you have something to add on that? several people are interested in the application of your travel reimbursement policy. you might call it domestic -- >> domestic tour itch. >> -- tourism, medical tourism, yes. so let me just read them off because there are a bunch of aspects of it. if somebody had to travel to a distant hospital, are travel expenses paid before travel in the event the patient can't afford it? what kinds of expenses are covered such as lost wages for extra time off, child care, postprocedure follow-up visits, expenses for a traveling companion, i think we may have heard a little bit about that. that's all on one question card. do you pay for follow-up care for patient and family after a

procedure at a preferred provider who's located far away from the patient's home? and finally, are reimbursement for travel expenses is good, but what about for conditions where travel is difficult and painful or people who don't have a companion to travel with them? what is, what are the conditions under which you're requiring people to pay for travel impacting their mobility and ability to get to the high quality care? lots of interest. would you like to expand on your descriptions of the travel policy? >> sure. so in the kroger program in our centers of excellence program, if someone chooses to travel to use one of our we call them tier one facilities and they don't have one this their community -- in their community, we have a group of professionals at anthem

that that's what they do. they help to coordinate the flights, the hotels, the meals, the companion traveling with them. all of that is taken care of so that it's not coming out of the pocket of the associate. so it's billed as a claim through our billing process that we have with anthem. so all of that is taken care of for them. if someone can't travel, then we have accommodations for that as well. so they're not penalized for having a comorbid condition that prevents them from traveling or some other type of barrier. so it isn't intend bed to be such a stiff penalty just because they can't travel. so we try that first, and if they're willing to do that and if they can physically do that, if not, then we also accommodate them to try and get them to another centers of excellence be, a tier ii provider to take care of that for them.

so we really try and coordinate all of that. i would say one of the challenges that we experienced early on went we implemented the centers of excellence program was the postoperative care. so moving someone back from a centers of excellence facility that might not have been in their community and getting them back into their local provider for that care. and so it's taken a lot of coordinationing between an hem finish coordination between anthem and the nurses that help us do this at anthem, the surgeon and the local provider community. i think we finally got it all figured out, but that was really where the challenge was. it's not getting them to the high quality facility, getting the great services there. the challenge for us is really getting them back into the local provider community. but it's working, and it seems to be something, i think, that barrier has been worked out for us. >> david? >> follow up with the same, anthem has a concierge service

which provides all the travel arrangements. the -- also, again, the same. if they're not allowed, if they have a chronic condition that doesn't allow them, they would get a medical exception which wouldn't force them to use the facility. so they could use something in the community if it was too far. and in california, luckily, we have enough facilities, that only happens at a very small number of facilities in northern california where we have this kind of issue. >> and, actually, this question goes in the other direction. if examples provided today -- in the examples provided today, we see large insurers pushing for competition in procedures for which there are a lot of providers in an area. do you have any thoughts on how this model might work in an area with just one or two providers and a small insurer network? we're at -- is that what you find yourself addressing when

you have somebody in eureka? >> right. so, i mean, that's the challenge, right, of having enough regionally-located, geographically-dispersed reference-based pricing facilities and then having to have that travel and the canyon package -- companion package. and so in terms of the impact of that in terms of on the market, well, if there's only one facility and they're either meeting or not meeting, so it's, you know, it's a little difficult to look at the variation in a region like that. >> yeah. i was just going to comment that if you have only one or two providers who can perform a procedure in a geographic area, you -- if there is variation, which most of the time if it's -- it's really only one or two providers or very few that are clustering around each other, so you don't see the same variation. therefore, you, you know, this type of pricing doesn't necessarily have the same impact

for those providers, and it won't have the same kind of -- and if you think about it, then you could end up if some kind of antitrust issues where if you have two providers and they're agreeing to either set or be close to one another on price, i mean, we get into a whole other area of complicated issues when you're really only talking about where you don't have competition and you only have one or two providers so you can perform a service. so it's not likely that these will occur there. >> okay. we have only a few minutes left, and i'm going to ask you to spend those minutes not only listening to the qs and as but also filling out the blue evaluation form if you would. and we have another california-centric question here. how about you've got a market in california that is heavily penetrated by hmos, and the

questioner wonders how the reference-based prices for anthem's ppo compare to the prices in california hmos. the prices that they pay. >> well, the hmo in california in general is significant, although it's actually decreasing gradually over the past few years, and the ppo is increasing overall. but there's still a very large number of hmo members. in most cases as far as anthem goes, the hospital pricing is a contract between anthem and the hospital. so the professional component is where the capitation occurs on the hmo side with the exception of about 15% of our network which is in a full risk or more of a global capitation setting.

so the answer, in short, is that the hmo is not currently part of this initiative. and the prices paid at those institutions are the prices that the standard anthem price. >> and, actually, this is a related question, at least poor country lawyer thinks it's related. it might not be. why can't reference pricing be part of the carrier networking contracting negotiations, that discounting up to the reference price versus usual and customary? is that a reasonable question if this context? in this context? >> well, first of all, i'm a physician ad hoc, so -- [laughter] i don't want to venture into that. but be i think you're asking is it, should it be part of the normal contractual negotiation or rather than the negotiated price it is a agreed upon

between both parties s that the essence? >> i guess that's right. that as you establish -- >> right. >> -- a network that's willing to meet that price, can you leverage that into going to those who are outside that range and negotiate that as art of your new contract? as part of your new contract? >> >> well, i'm probably not going to venture too far into that other than just to reemphasize the fact that there was that pressure on the nonconforming institutions with the calpers initiative to actually bring the prices down. which actually happened without it being a direct goal. so it may well be that it could be effective. >> i was -- >> [inaudible] >> from a payer's perspective, it's where we want it to go, right? so we want to be able to bring the cost down of all of those services in a particular category, so hopefully, target pricing or reference-based pricing is eventually going to lead us there. it's just one of the initiatives

trying to get costs more aligned in a community. >> i think it's really important to understand that, i mean, reference pricing is ultimately a benefit strategy. it's not a payment strategy. so while you are capping the payment, you could still pay for it on bundled payment or fee for service or another method. so reference pricing is a benefit design. so while, you know, calpers -- i don't want to speak for david here, but calpers implemented reference pricing without having to renegotiate contracts, and anthem didn't renegotiate contracts during that period. they looked at the data, and they set the benefit design price of $30,000, and then hospitals moved cordingly. and then surely, i would imagine, in subsequent contracting cycles with those facilities that were either outside or at or below, that becomes part of the conversation.

but you don't have to implement reference pricing through a contract negotiation although once it's occurred, it probably does become a part of it. or i think there's a question. >> [inaudible] >> you want to get to a microphone? right behind grow. right behind you. >> right now -- i'm a taft-hartley fund, but anybody who has a relationship with a good carrier like an anthem, they say we'll give you a guaranteed discount of 60%. but it's based on the usual and customary. and what i'm suggesting is we would have a lot more manpower if our carriers weren't just negotiating on my behalf or kroger's behalf, but on their of business and telling some of these facilities we will take a 60% discount but be up to a reference price as opposed to the usual and customary which is

more supply driven. and so it's a really kind of out of the box way to think, but it's something i think everybody in the room could benefit from if they have, you know, stronger negotiations while we still have a chance before network negotiations go away because everyone in the country's going to have insurance, and a hospital won't take a discount anymore. >> that's a very improved formulation of your question from if -- from mine. and does it elicit some further response from any of our panelists? >> well, again, the point i would make is that i, that in this whole area of pricing has been changed as a result of the, let's say the shroud has been lifted. and so the previous discussions that occurred on discounts or the desired target price were

discussions around the argument about percentages off. now discussion is different, and those high-priced institutions from my own personal experience in california are aware of the pact that their prices are now out this and can be seen by the public. and so it is a different discussion. to the extent that you're -- the end point you've described, i can't speak to that. i'm not expert at that. but i believe the nature of the discussion has changed because of the fact that when the target prices are put out by these institutions, they are -- they could be recognized as way out of range of averages and reasonableness. so i think it's a positive. i'm not sure exactly where you want to get to yet. >> okay. all right. and by the way, one of the best illustrations of the impact on the upon the participating hospitals is this the -- on the nonparticipating hospitals is in the chart. jamie robinson, and we have our

friends to thank for these very readable one-pagers summarizing jamie robinson's article. there's a lovely chart on that second page that shows you the impact on the pricing of these services in the hospitals that were not participating in the calpers experiment. yes, bob. >> bob grist with the association of community health. with all the discretion that the payers have in setting reference pricing that you've disclosed in this panel and with the tendency of employers to cost shift onto employees usually in the form of greater deductibles or co-payments, what are the protections for consumers from reference pricing which sets a

standard price and expects the consumer to pay anything over that reference price? it seems like a very dangerous precedent even if it's in the interests of the payer in the short run. you haven't given any indication that this is a way of actually reducing total health care costs. we don't know whether the hospital is going to follow this procedure with regard to other payers or whether they're going to shift those costs onto other procedures. and i'm not sure how comfortable we should feel about this particular short-term strategy to help payers reduce certain costs. the panel itself is telling one story, and we don't have on the panel providers or consumers who

have been discriminated against because their unique needs did not fill the, you know, you sort of assume that quality remains the same. but, in fact, that may not be the case if most health care situations -- in most health care situations. >> well, for us, i think, it's about being an informed patient. and it's completely sol p tear -- voluntary for our associates and their family members to choose where they get care. we don't tell them they have to go anywhere. the choice theirs. and they have an opportunity to be informed before they obtain a ct scan or an mri or get a particular prescription and to make a coys as to whether or not -- a choice as to whether or not they want to stay under the target price or if they prefer not to. so the choice completely theirs. it's about, for us, it's about information and about helping

them be informed consumers of health care and to make a choice from that perspective. so they know whether or not they're going to be paying more if they choose to do so. >> go ahead. michael. >> yeah. no, that's a very good question, and i would say to the issues of patient protection, there is the protection that if the enrollee or the member stays within the defined reference-based network, then their share is fixed as to whatever benefit structure they have with their employer. the only time they would be subject to additional cost is if they went outside the network. so i don't think it's necessarily bad in that sense. the quality issue is relevant, and i agree that when you're talking about quality in general, there are a large number of metrics out this, and there are a few hundred that have been developed by very

prestigious organizations. but be when it comes to -- but when it comes to specific quality issues within these very detailed procedures such as hip and joint replacement and so on, a lot of quality metrics that need to -- or a lot of quality information that hopefully will come out of registries. what we have at the moment is not completely adequate. so in terms of the overall success, i would just say that there are a number of initiatives that have been put out there, and there are various organizations that describe various initiatives for bending the cost curve down. very many of them have failed. and this is one of the few that at the moment has had some success. and it's had success as well documented not just by calpers and not just by anthem, but by an impartial third party here with the health economists at uc berkeley. so i think there is some validity to this study the. i'm pretty sure. these are very good researchers. and i think it is a success

story. now, whether or not it can be replicated a across the country, that remains to be seen. but in this has been a successful initiative, and i think it's -- i mean, i'm biased, of course, but i think it has done something to push the knowledge and the practice of health care delivery along. >> go ahead, david. >> okay. calpers is exreamly sensitive to this -- extremely sensitive to this question given who we represent and, in fact, the jamie robinson article includes an analysis of the out of pocket to the payers. i didn't include it because it gets a little complicated talking about coinsurance, co-payments, deductibles, but we did see the out of pocket went down to our members over time with the implementation of the program. and in general, if you think about so something like -- so in that case with the hips and knees the deductible plays a big role in terms of how the out of pocket hits you. something with the more, the

colonoscopies, the cataracts, you know, the coinsurance still plays a role there, and, you know, the lower costs are going to benefit you. so that is going to be included as well as when we do our follow-up economic analysis of those three other procedures we're doing on reference pricing. in terms of total costs, that was also included looking at the out of pocket plus the net pay, so that went down dramatically as well. as i said, for the hips and knees. and that may have been due to the deductible being reached in a number of cases. and then i think your last part was a little bit about, talking about the bubble. if you push down on the balloon here, it comes up over here. i think that's just for calpers something we'll have to look at in the future and be aware of and be concerned about. >> and i just wanted to comment that i think there is awareness on behalf of the payers and the purchasers that this is somewhat of a short-term fix. but it is one of the few short-term fixes that actually

is seeing positive results. and so in the absence of being able to look at the total and being able to bend the total cost curve down, i think the strategies are having to be, they have to be a little bit more piecemeal. so it's not that we're not conscious of the impact that it could have, it's just that sometimes things have to occur incrementally. and as dr. belman said, some of the incremental things haven't worked so far, and this is actually starting to work. and then we'll have to see what lessons can we learn from this to look at the more total population costs and the total costs and not having that cost shifting occur in the balloon impact. but part of this is disruption and inthough sative disruption -- innovative disruption that could help with short-term costs which we are all struggling with and then learn from that to see what are the long-term lessons and

strategies we can put in place. >> all right. my, that is a fittingly big picture end to this discussion, final comment anyway, if not the end. this has been quite edifying for your moderator anyway. i've learned an awful lot about the way this mechanism works and might work for others in a similar situation. and i'd ask you to while you're filling out the evaluation forms that you've not had a chance to do yet note that we are indebted to our friends at wellpoint for helping us think through this session and put it together and for your great questions which covered a number of aspects of this that weren't all that clear. and finally, ask if you would join me in thanking our panel to help us understand this concept. [applause]