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those go hi good to see you again. tell us why he wrote this book. >> guest: as they say in the acknowledgments a reporter from the new york times called me up when she was switched over from foreign affairs to public health and i talked to her about the american health care system and explained to her the american health care system and she wanted to know if we could meet for tea. i thought that's a bit ridiculous. you can't explain the health care system and an hour. when it be nice if there were 250 page book i could give to someone and that would explain the system. when a lookout there there is no such book and i always figure if you're a tenured or faster

health policy person it's beneath you to write a book explaining the system and if you aren't untenured trying to get tenure you figure if you read this book you will never get tenure because the tenured peeper -- people will. once i got into writing the book i began to think it sets the platform for what's going to happen. why don't i start making predictions about the future from what i now and all the people i have talked to and i had been trained well enough because one of my colleagues has done a lot of research about forecasting and making predictions and warned that it was a bad idea because mostly experts don't do so well. nonetheless we all have to make predictions whether we are running hospitals for our investors. i did my best on the predictions. >> host: a lot of people know you as one of the architects of the aca the affordable care act otherwise known as obamacare is but before we talk about that how did you meet and get to become an architect?

what was your path and let star with medical school. >> guest: is pretty circuitous. i was in medical school and not very happy about what i saw around medical school that we were failing in one of the most frustrating aspects of it is when i was working in the emergency room as a student and seeing -- we took care of the patient who had say heart failure or difficulty breathing, admitted to the hospital and he worked hard to make sure that patient was dried out and the excess fluid was taken down and everything ws tuned perfectly discharge the patient home and inevitably he or she came back six, seven, 10 days later and we had to do it over again and we were not following -- i remember a patient that was in the hospital for six weeks with end up -- bacterial end up card -itis.

it was extremely frustrating. i did a ph.d. in political theory at harvard thinking that i would some of this was the value of the health care system so i worked on end-of-life care and the physician patient relationship and i came to the nih annual worked on research ethics and the end i was seeing the end after seven years seeing the end of that i decided i should turn my attention to resource allocation and the health care system. i had the good fortune of teaming up with a prominent health economist from stanford. when everyone at health policy was depressed about there would be no conference of reform we were thinking what would a conference of form we would want to have and we developed a voucher-based system. that got me into thinking more about health policy. then when president obama one the appointed peter orszag as the office of management and

budget i knew peter from a lot of conferences and meetings and i e-mailed him and i said peter do you need a doctor to work on healthcarhealthcar e reform? we talk that afternoon and worked out an arrangement where i would work at omb assisting. >> host: as far as the problems with the aca which you devote perhaps the first half of the book to that you set out to fix collectively can you outline those? >> guest: the american healthcarhealthcar e system as they say in the subtitle is terribly complex. >> host: let's read this. how the affordable care act will improve our terribly complex, blatantly unjust, outrageously expensive, grossly inefficient, error prone system. >> guest: right, so i think the health care system in 2008 in 2009 before we reformed it were all those things incredibly complex trying to explain to people just how it's paid for through insurance and medicare and medicaid and it takes about

40 pages. i don't even go into all the details. then you explain how doctors are paid and how are hospitals are paid and what the incentive structure is what the regulation for drugs is, for devices. all of that is incredibly complex and we were doing well. i any metric, 50 p. -- 50 million people were uninsured. some of our greatest academics centers are fantastic but pretty uneven. we have millions of people with high blood pressure not hard to diagnose and not hard to treat. we know that increases your risk of stroke and heart disease and shortens life. that is full in the system. before we pass the affordable care act one and people -- 20 people got a hospital-acquired infection and then there was the cost taking ever more of the economy making

states trade-off between medicaid and education making individuals get health insurance by keeping wages low. lots of reasons to change the system and i explained all of those. i think you know anyone of them them would be good enough and i don't think there was a republican or democrat in the world in 2008 or nine who understood the system who would say oh no it's great. really by 2008, 2009 almost everyone agreed we had a system that was broken and needed repair. the question was is what kind of repair? >> host: you explain that very clearly. the health care system is a daunting enterprise and incredibly unclear and what's also interesting in the beginning of history and i guess you could go way back let's start with nixon and work our way up to clinton. >> guest: well one of the surprises i decided let's give people a feel for how long we

have been trying to change the system. it does go back to 1912 but one of the surprises to me is to uncover how engage republicans weren't health care reform in 1945 at the governor of california at that time earl warren a republican pretty conservative proposed conference of health care reform for california and came within one vote of getting it passed in california. and he had gotten sick and said we really need to protect people from a cost of getting sick. when nixon got elected in 1946 the congress one of his first legislative ills he introduced was it till about conference of health care reform and here's the crazy thing. if i describe it to you you will say was he one of the architect? he wanted to give people subsidies based upon their income so they could go and buy private insurance to cover themselves. the government would provide those subsidies.

sounds a lot like obamacare to me. he proposed that in the late 1940s and then when he was running for president in 1960 against john kennedy there was a big debate both republicans and democrats trying to figure out how to get the people left out of the employer-based insurance, poor people especially the elderly, how to get them insurance. he reintroduces idea of subsidies where people could buy private insurance and then when he gets to be president in 1973 and 74 he he negotiates with ted kennedy and the senate and wilbur mills in the house about how to come together on a comprehensive health care reform bill and they were this close to a bill that they could agree to and then a typical washington, as typical washington scandals broke out. wilbur mills with a fanny fox scandal where an exotic dancer falls into the tidal basin is or

stop the chairmanship of the ways & means committee. watergate overtakes nixon and it all goes poof. we also need to say that liberals and unions at that time did not want to have a deal that would have private insurance continue. they wanted single-payers and they were resistant to making a deal with nixon and they withheld their support. so you have accommodation of scandals which mainly put the kabash on this bipartisan agreement with the unions and liberals opposing it. for 20 years after that until bill clinton we didn't have another reform and clinton comes in and wants a market-based reform, proposes his health security act and unfortunately there are lots of other things. overtook single focus on it. he had to pass a tax increase. they have been off the bill. by the time all the rest of the stage was clear for health care opposition had gained and had

defeated the bill. he didn't get one bill passed out of committee. health care reform is dead for 15 more years until 2008 and the system become so onerous we needed reform and that's why i called the passage of the affordable care act -- and this will be the framework for the next 20, the 30, 40, 50 years. >> host: well i think it might be fair to say that the most interesting part of the book of course is the fact that you were there at the revolution. in addition to the run-up when you do devote a good portion of the book to that it's very good foundation again and when i showed this to people they go where is that part? the chapter is eight through the rest of it that when you talk about your own observations and

insights as someone who really was there and you he specifically talked about in the quoting here the complex interplay between policy and politics and interest groups and if you would elaborate on that and maybe focus on let's start with malpractice. that was one of the more easy ones to understand. >> guest: yeah and it does illustrate that is not nearly as simple as people lay it out to be. going into reform i would have thought getting malpractice reform there was a reasonable chance of it. first of all we should also be modest in the expectatiexpectati on so malpractice is something regulated at the state level and not regulated at the federal level sub putting malpractice reform in a federal piece of legislation is not going to solve the problem. you can't force states in the federal government to do malpractice in this way so we provide incentives but we had a

very good combination of arrangements that made it look likely. the president himself was more about practice reform. he had articles in the new england earl of medicine co-authored with hillary clinton before he advocated for malpractice reform. he thought this was an important issue. there were two doctors in the white house myself and bob cochair. both of us thought malpractice reform is a good thing to do. there were other senior advisers larry summers and peter orszag who thought malpractice could encourage quality care and could encourage doctors to focus on quality. we had a good arrangement. we studied a number of options and as i tell it in the look we had laid out nine different options the pros and cons a detailed memo. one day in the summer of 2009 is we are putting various things together i go to my brother's

office which i tended to do towards the end of the day and ron wants a piece of information about analysis of insurance options and i was reporting back to him and in his usual way he says so what else are you suing suing -- doing seek? he basically said they asked word showed up. we are not doing that and he explained to me why we are not doing it. when the ama whatever they say in public they come in to my office and were talking about what they need out of this bill and we are cutting the sausage of legislation. they never talk about malpractice. all they ever talk about is basically held medicare pays doctors and they want that fixed so doctors can get more money. they never mention malpractice. i'm not doing malpractice because malpractice will require we have to effect -- often the democratic base.

by the way no republicans are coming to negotiate. if they came as a part of the negotiation for our our support with the malpractice we would have done it but that wasn't the case. here you had a situation where on policy grounds the white house was for malpractice reform and we had to buy some reasonable proposals but the interest groups, the ama and the politicians the republicans weren't interested. people say a oh no but that's the way it wound up. if either the doctors had said all right we understand about payment but here's malpractice and we have to have something on malpractice or we will negotiate with here and here are the things we needed to build it would have happened. that's not the way it a lot up and nonetheless the president had two elements of malpractice one in mid-september speech to the joint session of congress where he said look we have a

private program and we are going to make grants available to improve patient safety through malpractice reform and made grants available of more than $100 million in the affordable care act could take the provision of 10607 if i remember correctly that says we will give grants to states to reform them are pat -- they're malpractice law and study to see how it affects cost of malpractice insurance. president obama marketed the malpractice reform and did two pieces of pilot programs on malpractice reform more than anyone else. you can't say he was not committed to it. i am disappointed but the main interest groups and politicians who needed to support support it weren't there in the cause. >> host: as a clinician of malpractice interests me a lot and to pursue it a little bit

more you had a very interestiinteresti ng fact here supported by several studies which i admit i didn't know which is most people who really are big air adults do and the vast majority of malpractice lawsuits are frivolous so your preferred approach as i recall was a safe harbor kind of strategy. say a little bit about that. >> guest: again one of the things i point out in the book when i catalogued the problem with health care system is no one should be happy with the malpractice system whether you are doctor a patient the hospital or a lawyer. it's broken. it doesn't do anything is supposed to do to incentivize doctors compensate patients who are afflicted and to make sure it's done efficientefficiently without overhead costs. it doesn't do any of that. there is not a single metric that would measure it where it

succeeds. patients as well as doctors should want reforms. some people lets m. we save and put a short statute of limitations on it so people can't sue. i don't like those. in some ways they harmed the victim of malpractice. our fewest let's use malpractice as an incentive to improve the quality of care and make doctors adhere to guidelines we agree on so we basically tried to think of the program that would do that it may call this safe harbor. if doctors adhere to guidelines for the treatment of the patient they are resumed, is a presumption which could be rebutted their presumed to be innocent. this way doctors say the patient comes in with simple head trauma and the guideline says don't do a ct scan but to protect my

bottom i do a ct scan. in the safe harbors is no if you follow the guideline you would via the safe harbor and you would be presumed to be innocent. that seems to be the way to go. it incentivizes using the electronic record and that's exactly what we want doctors to do. we prefer that. are there other alternatives? yes. the university of michigan has pioneered the say you are sorry which easily identifies a problem it is up to the patient propose to them a simple solution according to a set schedule. if you have a medication error here is what we are going to do and that is substantially reduce the number of lawsuits in reduced payments. it has reduced the time to resolve it so that looks

promising but again we don't have enough research. >> host: thanks. let's move on to the actual aca here. as january 1 rolled around and things went into effect and some stuff went right in some stuff went wrong. talk a little bit about what went right and then we will talk about what went wrong and how it was fixed. >> guest: first of all the affordable care act is very unfair to say it just came on line. the fact is right after passage in march of 2010 lots of things came on line. many people should remember although they might have already forgotten the idea that young adults up to age 26 can stay on their parents plan. that came on line by september september 2010 and many insurance companies made it effective before within six

months of passage. similarly there has been a revision to encourage hospitals to reduce their readmission rate patients on medicare who are discharged from the hospital there's a 20% chance they will be returned to the hospital within 30 days. we created a program to incentivize hospitals to worry about what happens patients when they leave the hospital. that went into effect within a few months. the patient-centered outcome research institute went into effect quickly after the bill. we didn't wait until october 1 of 2013 to open exchanges for the affordable care act to be implemented. a lot of those provisions went into effect in some of them are very successful. some of them we were disappointed and to be perfectly plumb. it has been quite timid and we

have been trying to push that to undertake more comparative studies. >> host: is that in the hhs? >> guest: no, it's an independent private not-for-profit funded by an assessment on all insured people the board is dominated by the gao the government accountability office so it's independent and not part of the government. >> host: with the iowa institute? >> guest: correct. it is god until i think 2019 and unfortunately to my disappointment they have not undertaken the right kind of comparative effectiveness research. they have spent a lot of time worrying about dissemination but you need information to disseminate in getting that they seek information about which treatments work better whether we ought to give this kind of treatment say a surgery compared to medical treatment for a

particular element's. again they haven't done enough of that. nonetheless in the larger context the bill has had a pretty remarkable -- and let me mention one other program we undertook the partnership for patients in 2010 was an effort to reduce hospital-acquired conditions, infections falls medication errors surgery on the lower part of the body and three-year major program preliminary data are very encouraging. the total number of conditions fell 9% across hospitals and more importantly some major problems like ventilator assisted infections were central line infections have gone down by 50%. that's a remarkable improvement in hospital infections and it shows you what can be done if

everyone is given the right incentive. >> host: you are very transparent in the book about some of the problems with the web sites and the rollout. who do you think at this time, who would you consider the losers in the environment right now and what can we do about that? yes go i think the american public unfortunately execution on the exchanges is not everything it should be. other people have used the word fiasco and disaster and it really was terrible. you couldn't get on. many people were sorely frustrated and it didn't have to be that way. the most important issue to me is look we know connecticut succeeded in california did utterly well. i think it was improperly

manage. when you had a reasonably confident team to come together to fix fix it fix it it shows yx it. >> host: why did it take so long? again you are refreshingly transparent about the dynamics of the group and someone with managerial skill and health care experience. what was the resistance? >> i can't explain it but if you look for example that the two exchanges that i think have been really good art connecticut and california. it's just that connecticut has a health insurance executive who runs it. it's a quasi-private arrangement. massachusetts when they said there's up in 2000, the same thing.

they had a health insurance executive. these are people who understood what the health insurance companies need in the marketplace. they also have managerial experience. they are waking up everyday and saying how do we make the exchange better? what do we need to do to make sure the insurance companies operating get the information and what we have to do to make sure the shopper has a good experience to get the information they need in a reasonable amount of time. you see those places. they are running it like amazon. i kept saying and not just me but lots of other people kept saying that is what we need. it has to be in amazon like shopping experience for people. maybe not right out of the box. it had an evolution in its been out there for more than two decades now so we need to have that kind of relentless focus

managing an e-commerce web site. we structured it the old way running a government program. we have to attract customers and give them a product and make sure they are satisfied. we have to give them customer service, different mentality and again i hope that's the mentality that takes over. i think once you have that mentality the american public is going to love shopping for insurance on the exchange. >> host: we will see of maryland can manage to catch up or go to federally suppose. >> guest: connecticut has said we think we have a good package and we are willing to provide that passage to other people. we don't have to reinvent the wheel. some of the states that have signed up for the federal stranger saying can we take the connecticut thing and put it in place? that would be good to matt. >> them make a lot of sense.

>> host: this is probably one of the more sensitive parts of the experience and i'm quoting medicare. one of the president's core beliefs was that the public should be able to trust what he said. consistency was a virtue. clearly this took a big hit if you like your doctor you can keep them and premiums will go down by 2500 or family per year. those things didn't come to fruition completely. the public perception. we can agree that the public perception was in violation and the pulse did reflect that. if you were advising, if you are going to go back in and offer the chance. >> guest: first of all it's important that yes the public perspective is that he wasn't

telling the truth. let me make two points in the first thing is the president in dealing with him there were a number of meetings where he would often say how does that square with what i said on the campaign and how did that square with what i said in speeches? he takes the idea fidelity that the american public should trust what he said. you can keep their health insurance plan and people saying the oh no that was violated. here is why i don't think it was violated and i know i'm in the minority. i do know what we were thinking which is there is nothing in the affordable care act besides you insurance companies have to focus. you keep the same plan and you can stay on it. the insurance company says you know the market we don't want to stay in that plan. there's a good good rational reason for them to say that.

individuals are going to the exchanges. these individual plans are going away. we are getting out of this market. it's true the marketplace responded to that but it was insurance companies that decided they were canceling the plan. we grandfathered those plans. nonetheless as you point out the public thinks we didn't hear to that promise. right now you have to go to have a major campaign explaining to the american public the affordable care act. i think we need to be quite honest about it and again this is one of the frustrations. implementation of a complex bill and changing the american health care system is going to be bumpy. it's not going to be a bed of roses. there are going to be ups and downs.

let's put that on the table and some changes some people are going to lose on the way that to a better day. second the better day is the system that will be much better for everyone on all metrics. access to insurance and care quality of that care and the cost of the whole health care experience and the fact is on each one of those we have already had success in the american system and we will continue to have success. your last point which is you can -- every family will save $2500. first of all that's not tomorrow and second of all against the backdrop of health care costs going up by 2.4% greater than the growth of the economy and the cbo is pointed out look, premiums have been a lot lower and they are lower then we calculated. yes inflation has come down. not all of that through the affordable care act.

part of it is the affordable care act and whether it will turn out to be 2500 that was projected we will see but it certainly is the case that people have saved money. let me give you a concrete example. if you look at medicare beneficiaries they are premiums for the drug benefit program and part b have in fact stayed relatively flat and i'm talking about penny's indifference not not -- relatively flat. there is no doubt about that. health care costs in the last few years have remained flat and those people are seeing real benefits. they are paying the same despite inflation. so i do think there is a benefit. my advice to the white house with the immediate strategic campaign not just to get people to sign up for to explain to the

american public what are the benefits and my frustration that has never been done. we have never had a concerted long-term campaign. i don't think it's that complicated but i've been frustrated and i say that early in the book. the two self-inflicted wounds never a conference of communication strategy and the law once we enacted it to the best of our ability. >> host: i know you have a day job. >> guest: i am vice provost and chair of the department of medical health policy at the perlman school of medicine at the university of pennsylvania. >> host: so you are busy but just fantasizing would you ever,

would you go back if you were called to help tie up loose ends? >> as you know sally my experience in government was filled with bows and arrows and some slanderous attacks of me wanting to create death penalty. all of this was shown to be completely and totally false. i love despite all the hardships improving the system for the american public. i know a lot of people who know how frustrating it is. given my skill set one of the things i could do was to think of policies that i think would have the likelihood of pushing the health care system and doctors in the right direction. if i was asked to i think people

think my skill set would help knowing the downfalls of being a government servant, that is minor compared to helping the american public and improving the system. that is something that will last for generations. it's really important by the way one of the things that motivates me is the american health care system is so expensive, so much money that it influences our debt and influences state budget. one of the things that motivates me is i care about future generations. i care about the it education our kids are getting and the best way to help that is health care costs. what is driving the long-term debt in this country? i health care costs. what is driving states to take away from college and primary and secondary school, high health care costs. it frees up resources for paying

down the federal debt and states being able to support education. that's one of the reasons i motivated to do everything i can whether in government or not to improve the american health care system. >> lets go from large board to very contain. you said you loved working in the white house and i can imagine during this time revolutionary as the word as the wordy use but what is an average day like for you? >> guest: they almost always start the senior team meeting with peter orszag. >> host: at 6:30 the morning? >> guest: it became more civilized but early on at a quarter to seven we met regularly and that became more civilized. then you work on whatever task it is you're working on whether some provision of the bill or in my case i had the pleasure of working on the first ladies

let's move initiative and working on global health issues and you would have other meetings on those things and at the end of the day a recap. >> guest: . >> host: which for you is a lemon? >> guest: the thing about working in the white house it's not so much how long the days are although they are long but the uncertainty that some important thing can happen at 10 or 11:00 at night where you need to sit down and work on it. that unpredictability and the inability to control your subject is the worst aspect of public service at a high level. that is most people, most of the psychology and economic researchers will tell you part of the key elements of controlling parts of your environment. once you work in politics and policy development at a high level that control completely disappears and that was the most frustrating. on the other hand you are trading off.

can i make a big difference and can i push the system in the right direction? that's an honor. that's a deep honor to have that impact. >> host: speaking of the right direction the end of this month, march 31 is the time in which there will be another account mid-march -- >> guest: march 21 is the end of open enrollment periods be it's a measure of how many folks have enrolled and i know you and others have said the exchanges which obviously need to spread the risk around primarily through the enrollment of younger and healthier people is incredibly important and the estimated need for a moment was five to 7 million. where are we now and what are the prospects?

>> early march. the last numbers had about 4 million enrolled. there's a high bump in the moment. my best guess is between five and five .5 totally enrolled and at the moment we are 27% of the 4 million who signed up our young people. that percentage is like you to increase after we get closer to the end because they are the most people sitting on the fence. that is below the 7 million that cbo predicted and below what was expected nonetheless it's enough and enough young people that the risk pools as it were the balance between healthy and sick is probably going to be okay. we won't see a lot of insurance companies exit.

i don't think anyone can be missing the target and being low. again this is between the end of march and october 1. this is another opportunity to improve the web site and get the experience to advertise and to educate people and to get them involved. people by that time will have experienced their 1040 and the question of do they have insurance and the notion that it's really their obligation to get insurance and if they don't have that they will be paying a penalty. i think over the next few years we will see a ramp up of more and more people and my own personal view is the estimates by the congressional budget office and others by the end of the decade we will have many more people than 25 or 30 million people they estimate

getting insurance. >> host: now a few months ago or weeks ago there was a new health care proposal on the block the burr hatch coburn as an alternative to the aca. i guess i have two questions. if that were around in 2090 think the tree of health care reform might have been different? >> i think people at c-span only who remembers there is this burr hatch proposal and coburn proposal because no one else out there the day after it was announced it disappeared. part of the reason it disappeared is it's a proposal that is bad for the average american. i did a column in "the new york times" for a set all right let's take your proposal. if you are in the 28% income tax

bracket that proposal means 1500-dollar additional taxes, not something most americans want to run out and get the same old insurance so it's not a good deal for the average american. i don't think it would have changed their view. this is what i can't get and i will be quite -- the core of the obamacare proposal in terms of exchanges we are going to have the marketplace and compete in four tiers. people are going to have subsidies and individual consumers will decide which insurance product they want with their needs and they will have an incentive to have cheaper plans. that sounds very republican to me. it sounds very bipartisan and market-oriented. i think what happened here is the democrats said look republicans at a reasonable idea. it may not be our first choice

but we can live with that marketplace orientation with private insurance companies offering plans. let's embrace that and the republicans said we don't want anything to do with it even though was originally a plan. once the democrats took it in the republicans said no there's no republican plan that makes any sense that can address the issues of quality cost and access altogether. i think republicans have painted themselves into a corner. they don't have an alternative plan and every time they offer a plan weather was mccain's plan for the latest burr hatch coburn plan it really doesn't work. that's because the republican plan that does work is called the affordable care act. >> host: my colleagues back at aei -- >> guest: we had joe antos come to my class on health care policy at the university of pennsylvania. he didn't have an alternative plan that addressed the issue. it turns out he wanted tweets around obamacare.

i think that is the true republican plan. this is the marketplace. it is market-oriented. it does have private insurers. that is really the republican approach. that's the plan richard nixon originated. i don't think republicans ought to accept that this is a free-market proposal and say that's the structure lets try to make it better. right now we all know things need to be done to improve the affordable care act and we should get on with trying to do this. >> host: just enumerate some of those. >> guest: well i have a chapter in the book where talk about health reform 2.0. >> host: is that megatrends? >> guest: the chat group for megatrends. i would like to raise the cigarette tax. the cigarette tax we know if you raise the cost of a package of cigarettes you can get a very predictable declined in smoking

and everyone wants to have fewer people smoke. it's good prevention and that's the most effective way to do it. >> host: can't smokers i guess eligible is the wrong word but the susceptible to a fifth descent increase? >> guest: 50% increase. >> host: isn't there penalty? >> guest: the ability for the insurance company to charge people 50% more if they are smoking but that doesn't help when you buy the pac. one of the things we know from behavioral economics is it has to be immediate. 50 cents on a package of cigarettes is more immediate and we know that 50 cents would decrease smoking. i think everyone should agree to that. certainly smoking is one of the most harmful things whether heart disease or cancer.

second i think one of the most important things for cost control and increasingly that doctors and hospitals won't be change in the fee for system -- the first or a system. there's a thing called bundling where you put all the services associated with one medical treatment like bypass or orthopedic surgery or cancer care and to one payment and measure the quality of the care and give people that payment. if they do good quality care they can share in the savings. we have programs that are ready to go. i think we should roll them out across medicare and experiment with other programs for example like cancer care. third part of the affordable care act is his proposal that we have in the marketplace competitive for things like oxygen equipment hospital beds wheelchairs walker's durable medical equipment.

it's better that the marketplace set the price but we are going to pay this. does anyone in america believe in government setting prices? no so let's have a competitive marketplace. affordable care act has that and a limited experiment. in those experiments we save 40%. that's a lot of money and it saves seniors a lot of money and not having to do the co-pays. why don't we expand that? roll it out nationwide. we don't have to wait until 2016. we can begin in 2015 and second expand other services. i propose in the book let's have a business group that oversees it. wouldn't you love to have this kind of thing marked by the head of acquisitions and products by walmart? there are people who understand maximizing quality.

so i think those are three proposals that could quickly be implemented have a big impact on saving money and improving quality. >> host: getting two predictions you had an article in the republic which is based on the book about how you see insurance companies evolving. >> guest: yeah so the first -- in the book is and that the insurance companies as we know them. there is no better line for a politician to get applause than bashing insurance companies. i often think it's sometimes it's fair and sometimes it's unfair. i think they are going to have to evolve. i think competition in exchange is going to force them to evolve. why do i say that?

we have got growing health systems whether it's the cleveland clinic or in massachusetts the mass general then and the brigham hospital in my area are hospital system the university of pennsylvania as a growing number of affiliated hospitals. the systems are able to take care of patients in the doctor's office and the hospitals and then they go home and the skilled nursing facility. soon they will begin offering their product on the exchange managing the money to provide the care. they will become what i call integrateintegrated delivery system. they will look a lot like kaiser or group health in puget sound and they will be heading -- competing head-to-head with insurance companies and taking the private insurance companies and rolling it into their operation to offer a lower-cost plan with pretty good rand recognition. we already nice these brands.

hospitals and doctors. how are insurance companies going to respond? i think they will have to respond by developing systems not just acting as insurers. they are going to begin delivering care as well. i note in the book early examples of this. wellpoint body system called care more which not only provided insurance to seniors as part of the medicare managed care arrangement but did it at a very high quality level and relativelrelativel y low cost. they save 20% off the usual payment. that high cost, high-quality low-cost arrangement wellpoint is trying to figure out what the secret sauces and spread it to its other arrangement. similarly united has a group and

they have now employed 5000 doctors. again i think they are getting into the provider arrangement. i think you will see this evolution of hospitals having the insurance function integrated delivery system and insurers offering to provide care and the traditional insurance company going the way of the dinosaur. it's not going to happen overnight. it's an evolution over the next decade but as i predicted in 2025 that is where a lot of these insurance companies are going. >> host: i don't think you mentioned the term for these integrated systems. >> guest: accountable care organizations are part of the affordable care act and i call them intermediate species in the evolution of the health care system because i think they are a bit like the neanderthals.

what they lack is the insurance risk management function. when you add that they are integrating the insurance function with the delivery system and integrate care over the continuum of the outpatient, it skilled nursing facility being. that sealed and that is where we will begin increasing. >> host: one of the ideas you spoke about and frankly everyone in health care is spoken about for a long time is making information available to consumers. there is, granted it's challenging enough sometimes to know how dura% them but then how do even understand them if they are well presented. how do you envision that working? >> guest: this whole idea of transparency up traces and quality are definitely going to be the key to the future. right now we don't have

transparency operations and we don't know how much that colonoscopy is going to cost and how much is that ammori going to cost not just the list price but the actual price we will be responsible for or the insurance companies. that transparency is going to come and one consequenconsequen ce especially as an insurance company begins to say to people here is a reasonable high-quality place in here's the price. we are going to pay this price. that is going to have it downward president but then the question is am i getting quality at a low price and measure that quality is a little more challenging. we don't have the best quality metrics across-the-board. we have good in some areas and not in others and understanding which hospital and surgical

facility but which doctors will be the challenge for the next decade. can we solve the problem? absolutely. we will get a mash-up of medicare insurers and i think again a lot of money to be made in developing those quality metrics and to provide them to the public and i think we will see a lot of smart people working to develop them and i think some of that will become public companies. that is actually going to be making the system more efficient. once people know what good quality is in reasonable prices are have to believe they will respond to those incentives. >> host: we only have five more minutes left so not enough time to go's to the list in depth but it's very interesting and we should mention five other megatrends.

would you like to read the list or would you like me to? you mentioned insurance companies as we know them and this one that i'm interested in, the care for the chronically ill and mentally ill. >> 10% of the population uses two-thirds of the dollars in the health care health care system. that is where the quality problems are in the health care costs are. every health care system will try to figure out how to focus on those people with chronic illness. from what i can see around the system the best places to cut the expense 20%. once they have got a system in place a standardized care process attending to people at home preventing them from getting sick second going into the hospital they will look for the next thing. it turns out almost everyone

agrees and i mean the group of health policy people, it's not the severe schizophrenic but the severely anxious patients who use the health care system to sue's beran psyd. visco truthfully i think we know what a treat the severely mentally ill. in conjunction with the legal civil system. there's a lot to be done there. >> guest: i agree. as i say in the book by the end of the decade the system will focus on improving mental health and we will have parity between physical and mental health because people realize it's improving the quality of care and saving money. >> host: count down to three, emergence of digital medicine and closure of hospitals. >> guest: i think we will see a lot more wireless monitors.

they can diagnose it and tell you whether it's so severe that you need medical attention or a prescription. you monitor glucose every day. that's going to be very economical at the end of the day. >> host: we have one minute. and if health care inflation and finally transformation of medical education. i find that very interesting. >> guest: i'm frustrated by the fact that medical education is the same as a was 100 years ago despite the changes and i don't think it is kept up in any dimension. if you look at the time. we could train them in three years at a medical school as opposed to four. we could do more efficient job in spain -- training specialist. when i was a trainee we did one

year of clinical work taking care of patients and them we did two years and said not many of us stayed -- and you don't need three-year training for one year of clinical care. 15 or 20% of trainees will go into research and you don't need to train everyone. similarly we need to have more management learning how to work in teams. the future of health care is team-based care with nurses, nurse practitioners home health aides pharmacist dietitians. we don't train teams. similarly when you are resident brady trained? the future of medicine is not hospital care. it's in care at home in the nursing facilities. we need to train doctors in outpatient care. this will be a revolution in terms of how long we trained

where we are training people and what we are educating them on. i see that happening again medical education hasn't changed radically in 100 years but i think the next decade and a half will see a big change. >> host: thanks very much seek. >> guest: . >> thanks for having me. >> host: "reinventing american health care" really is a tour de force. >> guest: thank you very much. appreciate it. ..