.. as i say in the acknowledgment, a reporter from "the new york times" called me up when she was switched over from foreign affairs to public health, and said, would i take to her about the american healthcare system

and explain to her the american healthcare system. she wanted to know if we could meet for tea. i thought, that's a bit ridiculous. you can't happen and it in an hour, and i said to myself-wouldn't it by nice i there were a 250 page book i could give to someone and that would explain the system. when you look out there, there's no such book, and always figured the reason you're a tenured professor, it's beneath you to write the book explaining the system, and if you're trying to get tenure, you figure you right this become, you'll never get tenure. so i wanted to fill that void. and then once i got into writing the book i began to think, sets the platform for what is going to happen. why don't i start making predictions about the future from what i know and all the people i've talked to, and i had been trained well enough, because one of my colleagues at penn is a professor at warden and has done a lot of research on forecasting forecasting and g

predicts, and warns it's a bad idea bus mostly experts don't do so well. nonetheless we all have to make predicts, whether we are running hospitals or doctors investors so i did my best. >> host: a lot of people know you as one of the architects of the aca, affordable care act, otherwise known as obamacare. but before we talk about that, how did you even get to become an architect? what was your path? start with medical school. >> guest: i was in medical school and not very happy about what i saw around medical school. that we were failing and one of the most frustrating aspects of it is when i would work in the emergency room and see -- we took care of the patient who had, say, heart failure, difficulty breathing, admitted to the hospital we worked hard to make sure the patient is what we called, dried out, excess

fluid taken down, on the right medications, everything tuned up. discharge the patient home and inevitably he or she came back, six, seven, ten days later, and we had to do it again and we were not following up. i remember one parent who was in the hospital for six weeks for back tealar endocarditis, and sent the page home and literally two weeks later was back in with the same. then i win to do a ph.d in political theory at harvard, thinking that i would -- some of this was sort of the way -- the values of the healthcare, so i worked on end of life care, the physician-patient relationship and then i came to the nih and worked on research ethics, and after seven years, i decided i should turn my attention to resource allocation and the healthcare system, and i had the good 2014 of teaming up with a

prominent health economist from stanford, rick fuchs, and when everywhere was depressed about reform, we developed avoucher-based system, and that got me into thinking about health policies, and then when president obama won and he appointed peter as the office of management and budget, i new peter from conferences and meetings and i said, peter, do you need a doctor to help on healthcare reform? he said let's talk, and we work out an arrangement where i would allergic another omb assisting. >> host: and as far as the problems with the aca, which you devote perhaps the first half over the book to that you set out to fix, you collectively, can you outline hose? >> guest: the american healthcare system, in the subtitle, terribly complex.

>> host: right. let's read this. how the affordable care act ill. prove our terribly complex, blatantly unjust, outrageously injustice, grossfully expensive system. >> guest: the healthcare him in in 2008, 2009, before the freeway, was although things, complex, trying to explain to people just how it's paid for through insurance, through medicare, medicaid, the va, takes about 40 pages, and i don't even go into all the details. then you explain how doctors are paid, how hops are paid, what the incentive structure is, what the regulation for drugs is, for devices-all of that is incredibly complex and we weren't doing well. by any metric. 50 million people up insured. uneven quality. some of our great academic centers, but pretty ounce even. we have millions of people who have high blood pressure, not hard to diagnosis, not hard to treat, who are either informant

-- not diagnosed or inadequate treated and that increases risk of stroke, heart disease, shortens your life and that's full in the system. before we pass the affordable care act, one in 20 people going into the hospital acquire an infection. tens of thousands of people die. then the was the coast. taking ever more of the economy, making states trade off between medicaid and education, making individuals get health insurance but keeping wages low. lots of reasons to change the system, and i explained all of this, and i think any one of them would be good enough justification, having all of them -- not a republican or a democrat in the world in 2008 or 2009, who really understood the system who would say, oh, no, it's great. by 2008, 2009, almost everyone agreed we had a system at was broken and needed repair. the question just was, what kind of repair?

>> host: you explain that very, very clearly. this is -- >> guest: thank you. >> host: the healthcare system is a daunting enterprise, and it is incredibly clear. what is also very interesting at the beginning, it's a history. now, i guess you could go bay walk but start with nixon and work up to clinton. >> guest: well, one of the surprises is -- i decided to let -- let's give people a feel for how long we have been trying to change the system. it goes back to 1912. one surprise to me is to uncover how engaged republicans were in healthcare reform in 1945. the governor of california at that time, earl warren, republican, pretty conservative, proposed comprehensive healthcare reform for california. and he came within one vote of getting it passed in california. and he had gotten sick and he said, you know, we really need to protect people from the costs of getting sick. when nixon got elected in 1946

to congress, one of his first legislative bills he introduced was a bill about.com mensive healthcare reform, and if i describe it to you'll think, did he write obamacare? he wanted to give people subsidies, based upon their income, so they could go and buy private insurance to cover themselves, and 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. all the republicans and democrats were trying to figure out how to get the people left out of the employer-based insurance scheme, poor people, the elderly, how to get them insurance, and he again reintroduced the idea of subsidies for people to buy private insurance, and then when he gets president, in 1973 and '74, he is negotiating as president with ted kennedy in the senate and wilber mills in

the house, how to come together on a comprehensive healthcare reform bill, and they were this close to a bill that they could agree to, and then in typical washington arrangement, scandals break out. wilber mills has the fannie fox scandal where an exotic danner falls thety tidal bay sip and he is forced off the commit year, watergate overtakes nixon and it all goes poof. and we have to see liberals and unions did not want to have a deal that would have private insurance continued. they wanted single pair and they -- single payer and they withheld their support. so a combination of scandals which mainly put the kibosh on this bipartisan arrangement with the unions and liberals opposing it. and for 20 years after that, until bill clinton, we didn't

have another reform, and then clinton comes in and wants to sort of market-based reform, proposes his health security act, and unfortunately there are lots of other things overtook single focus on. had to pass a tax increase. they had the nafta bill. by the time all the rest of the states was cleared for health care, opposition had gamed and had defeated the bill. didn't get one bill passed another of committee. healthcare reform is dead for 15 years until 2008, and the system just had become so onerous, we needed reform and i call it the world's historical act. it did take 100 years and this will be the framework for the next 20, 30, 40, 50 years. >> host: well, i think that it might be fair to say the most interesting part of the book is the fact that you there at the

revolution. this is what zeke saw at the resolution. when you do a good portion of the book to that and it's very good foundation. the part -- i show this to people and they go, where is the zek can e part and it's chapters -- you talk about your own observations and insights as someone who really was there, and you specifically talk about, i'm quoting here, the complex interplay between policy, politics, and interest groups. and if you would elaborate on that. maybe focus on at least start with malpractice. that's one of the more easy ones to understand, frankly. >> guest: it does illustrate it's not nearly as simple as people lay it out to be. so, going into reform, i would have thought getting malpractice

reform was -- it was a reasonable chance of it. first of all, we should also be modest in the expectations going in. malpractice is something regulated at the state level. it's not regulated at the federal level. so putting malpractice reform in a federal piece of legislation is not going to solve the possible problem you. can't force states as the federal government to do malpractice in this way. but we had a very good combination of arrange. s that made it look likely. the president himself was for malpractice reform. he had written an aural in the new england journal of medicine co-authored with hillary clinton, before declared for president, advocating for malpractice reform. he thought about and it thought it was a very important issue. there were two doctors in the white house, myself and bob coacher both thought malpractice reform was good to do. other senior advisers who

thought malpractice could encourage quality care and encourage doctors to focus more on quality. so we had a good arrangement. we studied a number of options, and we had laid out nine different options, pros and cons in a detailed memo, one day in the summer of 2009, as we're putting various things together, i go into my brother's office, which i tended to do towards the end of the day if i went in at all, and rahm is -- wants some piece of information about some analysis of various insurance options and i was reporting back to him, and then as is usual way he says, what else are you doing? and i begin to explain the malpractice thing, and he basically said the f-word, shut up. we're not doing that. and the explained why not. he said when he ama, whatever thaw saw in public, they come into my moves and we're talking about what they need out of this bill and we're really cutting

the sausage of legislation. they never talk about malpractice. all they ever talk about is what the -- how medicare pays doctors. they want that fixed so doctors can get more money. they never mention malpractice. i am not doing malpractice because malpractice will require that we have to offend in of the democratic base, and if i don't need to offend the democratic base to keep the doctors on board, i'm not going to do it. and by the way no republicans are coming to negotiate with me if they came and said part of onegotiation for our support would be pal practice, we would have done it. that wasn't the case. so, here you had a situation where, on policy grounds the white house was for malpractice reform and he wad to buy some reasonable proposals. the interest groups, the ama, and the politicians, the republicans, weren't interested. now, people say, oh, no, no. but that's the way it lined 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 the republicans said, all right, we'll negotiate with you and here's the kinds of things we need in the bill. it would have happened, i'm sure. that's not the way it lined up. and nonetheless, the president had two elements of malpractice he pushed. one in his september speech to the joint session of congress. he said we have a pilot program on patient safety and we're going to make grants available to improve patient safety through malpractice reform. made grants available. more than $100 million. and the affordable care act contained a provision, i think it's 10.607 if i can remember correctly, that says we will give grants to states to reform their malpractice laws and study them and see how it affects care and costs of malpractice insurance and costs of health care. so, president obama, more committed to malpractice reform than any president, actually did

two pieces of pilot programs on malpractice reform. did more than anything else. you can't say that he wasn't committed to it. now, that we didn't get more comprehensive reform, i've disappointed, but the many interest groups or politics needed to support it wasn't there in the clutch. >> host: as a clip issue in san, malpractice interests me a lot. just to pursue at it. bit more, you had a very interesting fact here supported by several studies which i admit i didn't know, which is that most people who really are the victims of error, don't sue and that the vast majority of malpractice lawsuits are frivolous. so, your preferred approach, if i recall, was a safe harbor consistent of strategy. talk about that. it's interesting. >> guest: again, one of the thing is point out in the book when i catalogue the problems with the healthcare system no one should be happy with the

malpractice system, whether you're other doctor, patient, hospital, lawyers, it's broken. it doesn't do anything it's supposed to do, which is to incentivize doctors not create errors. compensate patients who are afflicted with an error. make sure it's done efficiently without a lot of overhead costs. doesn't do any of that. there's not a simple -- single metric you would measure the malpractice system on where it actually succeeds. it fails on every score. so patients as well as doctors s should want it reformed. some people want, let's just cap how much we pay and put a short statute of limitations so people can't sue. i don't like those. in some ways they harm the victim of malpractice. our view is, let's use malpractice as an incentive to improve the quality of care, make doctors adhere to guidelines that we all agree on.

so we basically tried to think of a program that would do it and we call that safe hash pore. if doctors adopt electronic health records-ed a her to a guideline, if a guidelines exitses for treatment of a patient, they're presumed, it's a presumption which could be rebutted -- they're presumed to be independent. so doctors say patient comes in with simple head trauma, you normally wouldn't do a ct scan. the guideline says don't do a ct stan but to protect my bottom i do a ct scan. the safe harbor thing it says, no, you followed the guideline, wow would be in a safe harbor and presumed to be innocent. that seemses to me to be the way to go. invent vies using the electronic records and adhering to guidelines, and that's what we want doctors to do. so, we prefer that. there are other alternatives which could work well? yes. i don't think we have enough research to say which is the optimal system. the university of michigan pioneered this, say your sore,

which is easily identify a problem, admit it to the patient, propose to them a simple solution according to a very set schedule. with we cause a laceration, here's what we'll do. a medication error, here's what we pay you. and that has substantially reduced the number of lawsuits, it's reduced their payments, it's reduced the time to resolving the cases. so that looks promising. again, we don't have enough research. >> host: okay. thanks. let's move on to the actual aca. so, january 1 rolled around, and things went into effect, and some stuff went right and some stuff went wrong. tell me -- talk about what went right and then we'll talk about what went wrong and how we can -- how that can be fixed. >> guest: first of all, the affordable care act is more than just the exchanges.

i think it's very unfair to say, oh, it just came online of the fact is right after passage in march 2010, lots of things came online. so, many people should remember, although they might have already forgotten, the used that young adults up to age 26 can stay or their parents plan. that came online by september 2010 and many insurance companies made it effective before it does that's within sucks months of passage. similarly, provision to encourage hospitals to reduce their re-admission rate. so, patients on medicare, who get discharged from the hospital, are -- there's a 20% chancer they'll return to the hospital within 30 days. we created a program in the affordable care act to innocent size hospitals to worry about what happens when patients leave the hospital to make sures they're continuity of care. that went into effect in a few months. the patient-centered reresearch

indent. so we didn't wait until october 1, 2013 for the affordable care act to be implemented. a lot of those provisions went into effect, and some of them were very successful, some of them i'm disappointed in, to be perfectly blunt, like i don't think the patient centered outcome research institute has been sufficiently progressive in the kind of studies it undertakes. it's been quite timid and we have been trying to push them to actually undertake more comparative studies. >> host: is that at hhs? >> guest: no. it's an independent private not for profit funded by an assessment on all insured people. the board is nominated by the gao, the government accountability office so it's independent and not part of the government, not -- >> host: like the institute of medicine? >> guest: correct. the basic idea. not subject to political whims. has until 2019, and i think they

unfortunately, to my disappointment, have not undertaken the right kind of comparative effective not research. they spent a lot of time worrying about dissemination but you need information to disseminate, and getting the basic information about which treatments work better, whether we ought to give this kind of treatment, say, surgery, compared to medical treatment, for a particular illness, i think they -- again, haven't much and we have been critical of them. nonetheless, in the larger context, the bill has had a pretty remarkable impact. let me mention one other program we undertook. the partnership for patients in 2010, with what's called innovation funds, with an effort to reduce hospital acquired conditions. infections, falls, medication errors, surgery on the wrong part of the body, and three-year

major program. preliminary data are very, very encouraging. the total number of hospital acquired conditions fell nine percent across hospitals and more importantly, major problem like ventilator assisted infections or central line infections have gone down 50%. that's a remarkable inprompt in hospital infections, and i think 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 of the web site and the rollout and stuff. so, who do you think, at this time, would -- who would you consider the losers in the environment right now. >> guest: the american public. unfortunately execution on the federal exchanges was not everything it should be.

it was -- i think people have used the word fiasco, disaster, and it really was terrible. you cooperate get on. i tried hundreds of times in the first month, and many other people were sorely frustrated, and it have to be -- didn't have to be that way. the most important issue to me is we know it could have succeeded. connecticut succeeded. california did moderately well at the rollout. i think it wasn't properly managed. when jeff came in to rescue and it a reason my competent team to fix it, showed you could fix it. >> host: why that took so long? you're really very refreshingly transparent about the dynamics of the group and admitting an outsider and something with real managal skill and health insurance experience, what do you think was the resistance? >> guest: i can't explain why

the resistance. i know if you look, for example, the two exchanges that i think have been really good, are connecticut and california. kentucky has been fine. lots of others. just that connecticut has a health insurance executive who runs it. it's a quasi-private arrangement. massachusetts, when they set theirs up in 2006, same thing. it had a health insurance executive. these are people with experience, understand what the health insurance companies need in the marketplace. they're also a lot of managal experience. they're waking up every day and saying, how do we make the exchange better? what do we need to do to make sure the insurance companies operate and give the right information. what do we have to do to make sure that the shopper has a good experience, can get on, get the information they need and get off in a reasonable amount of time. and you see those places. they're constantly tweaking their sites and running it like

amazon. i kept saying that and not just me. lots of poo people on the inside kept saying that's what we need aspire to an amazon-like shopping experience for people. maybe not right out of the box. amazon, after all-didn't become amazon overnight. it had an evolution. it's been out the for more than nearly two decades now. and so we need to have that kind of relentless focus on managing a ecommerce web site, and i think we didn't structure it that way. we structured in the old way. a government program. it's not a government program. you have attract customers and give them a product and make sure they're satisfied. give them customer service. very different mentality, and again, i just hope that that is the mentality that takes over. once you have that mentality, the american public is going to love shopping for insurance on an exchange. >> host: we'll see if maryland

can catch up or go to the federal, i suppose. >> guest: or adopt -- connecticut now has said, we think we have a very good packaging. we're willing to consult and provide that packaging to other people. you don't have to re-invent the wheel. some states that signed up for the federal exchange i understand are saying, can we take the connecticut kind of thing? put it in place and get out of the federal exchange. that would be good, too. >> host: makes a lot of sense. now, you also write here -- this is probably one of the more sensitive parts of the experience -- that -- i'm quoting -- 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 with the, if you like your doctor, you can keep him, and premiums for families will will go down by 2500 per family per year. those things didn't come to

fruition completely or -- you want to debate that but the public perception, we can agree the public perception there is was a violation. the polls do look like that. how can that be -- if you are advising, going back in and off -- >> guest: first of all, i do think it's important that, yes, the public perception is that we didn't follow that and the president wasn't telling the truth. let me make two points about that. the first thing is, the president -- in dealing with him, there's a number of meetings where he would often say, how does that square with what i said on the campaign? how does that square with what we have said in speeches. he takes the idea of fidelity. the american people should trust him. on the notion you can keep your health insurance plan and people saying that was violated.

here's why i don't think it's violated. and i know i'm in the minority but i was on the inside and know what we were thinking. there is nothing in the affordable care act that says, oh, you insurance companies, you have to throw people off. we grandfathered plans. you keep the same plan, people can stay on it and no one has to be thrown off. the insurance companies decided, the market -- we don't want to stay in that plan. we want to get out and there's a good reason for them to say that, which is, look, individuals are going to the exchange. they're going buy insurance through the exchange. these individual plans are going away. there's no growth here. we're getting out of this market. now, its true that the marketplace exchange and insurance companies responded to that but the insurance companies cancelled the plans, not the affordable care act kaz. we grandfathered those plans in. so i don't accept the premise. nonetheless, as you point out, sally, the public thinks that somehow we didn't adhere to that promise. so, right now you have to go, i

think, and have major campaign, explaining to the american public the benefits of the affordable care act, and we need to be quite honest about it and, again, this is one of the frustrations. look, implementation of a complex bill and changing the american healthcare system is going to be bumpy. it's not going to be just a bed of roses. there will be ups and downs. let's put that on the table. and some changes, some people are going to lose on the way to a better gainment the bet -- better game. the better game is access to insurance and okay, quality of care, and cost of the whom healthcare experience. the fact is on each one of those metrics we have already had success the american system and will continue to have success. if we get to your last point, which is you could save -- every family will save $2,500.

first of all that's not tomorrow. and second of all, it's against the background of healthcare costs going up at 2.4% greater than the growth in the economy, and the cbo pointed out, look, premiums have been a lot lower and they're a lot lower in the exchange than we had calculated in 2010. yes inflation has come down. not all of that is the affordable care act. there's part of it the recession, part of the private system, part is the affordable care act and whether it will turn out to be 2500 by the end of the decade when that was projected, we'll see. it certainly is the case that people have saved money. let me give you a concrete example you. look at medicare beneficiaries, they're premiums for drug program and part b have stayed relatively flat, and i'm talking about pennies differences. relatively flat over the last few years.

that's because of the affordable care act. there's just no doubt about that. that's because healthcare costs and the last few years have remained flat and those people are seeing real benefits. they're not paying more year after year. they're paying the same. despite inflation and the rest of the economy. so, i do think actually there has been a benefit mitchell advice to the white house would be you need a strategic campaign not just to get people to sign up, but to explain to the american public what are the benefits of the law and how the law has done it. my frustration, that has never been done even going back to 2009. never had a concerted, long-term campaign education process. it's not that complicated but i've been frustrated, and i say clearly in the book the two self-inflicted wounds that really were a problem is never comprehensive communication strategy and never executing on the law once we enacted it to the best of our ability.

>> host: i know you have a day job. we didn't mention that. you're -- >> guest: vice president of global initiatives and also chair of the department of medical ethics and health policy at the pearlman school of medicine at the university of pennsylvania. >> host: okay. so, you're busy. but just fantasizing, would you ever -- would you go back if you were called to help tie up some loose ends? >> guest: you know, sally, my experience with government was filled with bows and arrows and some slanderous attacks on me as dr. death and wanting to create death peoples al of which were shown to be completely, totally false. i love actually being in government. i loved -- despite all the hardships, trying to improve the system for the american public. i know a lot of people who

intersect with the healthcare system and how frustrating it is when you're a doctor, seeing some of the inunanimous it ins of the system, and you're frustrated, and given my skill set, one thing i could do was to think of policies i think would have a likelihood of pushing the healthcare system some doctors in the right direction. if people think my excel set could help, would be happy to go in, knowing all the downfalls of being a public servant, including the personal attacks even when they're false. that's minor compared to helping the american public and improving the system. that will last for generations and that's, i think, really important. by the way, one of the things that motivated me is -- the american healthcare system is so expensive. so much money. it really influences our debt. and influences state budgets. and one of the things that

constantly motivated me is, i care about future generations. i care about the education our kids are getting, and the best way to fix that is to try to reduce healthcare costs but a what is driving the long-term debt, high healthcare costs. what is driving states to take money from college and primary and secondary school? high medicaid costs. so getting healthcare costs under control frees up resources for paying down the federal doubt, states being able to support primary and secondary over indication. so that's one reason i'm motivated to do everything i can, whether in government or not, to improve the american healthcare system. >> host: let's good from very large board to very contained. you said you loved working in the white house, and i can imagine during this time, kind of momentous -- what was an average day like for you? >> guest: well, they almost always started with the senior

team meeting with peter orzak. >> host: 6:30 in the morning. >> guest: a little more civilized as time went on. early on it was quarter to 7:00 we met regularly, and then it became more civilized. and then you'd work on whatever tasks it is you were working on, whether it's some provision of the bill 0, in my case, i had the pleasure of working on the first lady's let move initiative and was working on global health issues, and you would have other meetings on those things, and then at the end of the day sort of recapped -- >> which for you was 11 -- >> guest: no, no. the think about working in the white house is not how long the days are but the unterritory si that some important thing can happen at 10:00 or 11:00 at night that you need to sit down and work on. that unpredictability, the inability to control your schedule, this worst aspect of public service at a high level.

that is -- most people will tell most of the psychology research efforts and economic researchers will tell you part of the key elements of happiness is being able to control parts of your environment, and once you're working in politics and the white house and policy development at a high level, that control disappears and that was the most -- wasn't the personal attacks. it was the lack of control. but you're trading off, can i make a big difference? and can i help push the system in the right direction? and that is an honor. that's really a deep honor to be able to have that kind of impact. >> host: speaking of the right direction. this is march 31st. the end of this month is the time at which there will be yet another accounting -- i guess mid-march -- how many folks have -- >> guest: march 31st, the end of open enrollment. >> host: a measure of how many folks have enrolled, and i know

you and others have said that the exchanges, which obviously need to spread the risk around, primarily through the enrollment of younger, healthier people, is incredibly important and that the estimated need for enrollment was five to seven million. >> guest: right. >> host: y are we now and what are the prospects? >> guest: we're early match. last numbers had four million people enrolled. we're -- the end always has a high bump in the enrollment period. we work to deadlines. my best guess is between five and five and a half million will it toly enroll. at the moment we're 27% of the people, four million who signed up are young people. that personal is likely to increase as we get closer to the end because they're the most

people who are sitting on the fence. that's below the seven million that the cbo predicts, below what was expected. nonetheless it's both enough and enough young people that the risk pools, as it were, the balance between healthy and sick, is probably going to be okay. so we're not going to see a lot of insurance companies exit the market or unlikely to see a big rate shock, premiums going up. but i dent -- don't think anyone can he happy with missing the target. again, this is between the end of march and october 1st when it re-opens. this is another october to improve the web site, to get the experience better, to advertise, to educate people, and to get them involved, and i think that is -- and people will by that time 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 dent have it they'll pay a penalty. i think over the next few years we're going to see a rampup of more and more people, and my own personal view is that the estimates by the congressional budget office, by the end of the decade, will be low. we'll have many more people than the 25-30 million people they estimate getting insurance through the exchanges. >> host: now, a few months ago -- weeks ago, actually -- there was a new healthcare proposal on the block, the burr-hatch -- as an alternative to the aca. if that were -- i guess i have two questions. if at that time were around in township do you think the trajectory of healthcare reform might have been different? >> guest: i think people in c-span remember only there's

this burr-hatch-coburn proposal. no one else out there -- the day after it got announced it disappeared. and 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" where i said, all right, let's take their proposal. if you're in the 28% tax bracket, income tax bracket, that proposal means $1,500 additional taxes that you're going to have to pay. not something that most americans want to run out and do to get the same old insurance. so it's not a good deal for the average american. i don't think it would have changed everything. this is what i can't get and i will just be quite frank. obama -- the core of the obamacare proposal in terms of access, the exchanges, we're going to have marketplace, private insurance are going to offer in four temperatures d tiers and compete in four tiers. people have subsidies and

individual consumers will decide which insurance product they want that fits best with their need and can they'll have an incentive to have cheaper plans. that sounds very republican to me. it sounds very bipartisan. very market-oriented. and i think what happened here is that the democrats said, look, republicans have a reasonable idea. we can live with this idea. it may not be our first choice. we may want a public option but we can live with that marketplace orientation with private insurance companies offering plans, and the republicans are saying we don't want anything to do with it even though it was our plan. there's no alternative republican plan that can address the issues of quality, cost, access, altogether, and i think republicans have painted themselves into a corner. they don't have a coherent alternative plan, and everytime they offer man, whether mccain or the latest burr-hatch --

coburn plan, it doesn't work. that's because the republican plan that does work, that's called the affordable care act. >> host: my colleagues aei -- >> guest: we had joe at my encloses on healthcare policy at the university of pennsylvania. he didn't have an alternative plan. it turns out he wanted tweaks around obamacare, and i think that is the true republican plan. this is a marketplace. its market oriented. does have private insurers. that's really the republican approach, with subsidies for people who can't afford to buy. that's the plan richard nixon only nateed. i don't think -- i think republicans ought to just accept this is a free market proposal and say, that's the structure. let's try to make it better. right now we all know there are things that could be done to improve the affordable care act. we should just get on with trying to do those.

>> host: just enumerate those. >> guest: well, i have a chapter in the book where i talk about health reform 2.0. >> host: the mega trip trends. >> guest: i would like to raise the cigarette tax 50 crepts. why? the cigarette tax. if you raise the cost of a package of cigarettes you can get a very predictable decline in smoking, and everyone wants to have fewer people smoke, and it's good prevention, and that is the most effective way to do it. >> host: can't you -- can't smokers be -- i guess eligible is the wrong word -- susceptible to a 50% increase. >> host: 50-cent -- >> guest: 50-cent a pack. >> host: the penalty. >> guest: the ability of the insurance company to charm people 50% more if they're smokers that's so delayed from your smoking and doesn't help

when you actually buy the pack. one thing we know from behavioral economics it has to be immediate, not distant, and 50-cents on a package of signature it ares is much more immediate and that 50-cents would decrease the smoking rate 3%. so that's one thing i would do, and i think everyone should agree to that. that's bipartisan. we're all for prevention and certainly smoking is one of most harmel things, whether it's heart disease or cancer. second, one on most important things for costs control, increasingly the doctors and hospitals want, is a change of payment off the fee for service system. i propose a set of things called bundle payments where you put all the services associated with one medical treatment, like bypass surgery or orthopedic surgery or cancer care, into one payment. you measure the quality of the care, and you give people that payment and if they do good call the of care, they can share in the savings.

we have programs that are ready to good i think we should roll them out across medicare, and then experiment with other programs. for example, as i mention in cancer care. second, -- third, competitive bidding. so, part of the affordable care act is this proposal that we have market place competitive bidding for things like once oxygen equipment, hospital beds, wheelchairs, walker, durable medical equipment. well, it's better that the marketplace set the price than medicare decide, we're going to pay this amount. does anyone in america believe in government set prices? no. so, let's run the marketplace and have a competitive marketplace. the affordable care act has that. in a limited experiment to be rolled out by 2016, and in those experiments we save 40%. a lot of money. and it saves seniors a lot of money in not having to do the copays. why don't we expand that? roll it out nationwide faster. we don't have to wait until 2016.

we can begin next year in 2015. second, we could expand it to other medical services. lab services. things which are commodities. we should begin to use it. and i propose in the book, let's have a business group that oversees it, wouldn't you love to have this kind of thing run by the head of acquisitions and products for wal-mart? those are people who understand maximizing quality and lowering costs. so, i think those are three proposals that could quickly be implemented, have a big impact on saving money and improve quality. >> host: getting to predicts, you had -- predictions you had an article how you see insurance companies evolving. >> guest: yes. so, the first mega trend in the book is end of insurance companies as we know them.

there's no better line for a politician to get applause than bashing the insurance companies. i often think, sometimes it's fair and sometimes it's unfair. we're a little in discriminate but they're not in the most favored part of the health care system as far as the american public. they have to evolve. i think competition in the exchanges is going to force them to evolve. now, why do i say that? well, we have growing health systems, which it's the cleveland clinic or in massachusetts, the partners, the mass general and the brigham hospital in my area, our hospital system, the hospital of the university of pennsylvania has a growing number of affiliated hospitals. these systems are able to take care of patients in the doctor's office in the hospital, when they good home, and the nursing home in a skilled nursing facility. soon they're going to begin offering their products on the

exchange and adding an insurance function. managing the money to providing the care. so, they're going to become what i call integrated delivery systems and look like kaiser or group health of puget sound and competing with insurance companies and rolling money into the operations, offering a lower cost brand with good brand recognition. re recognize premiere brands of hospitals and doctors. how are insurance companies going to respond? they have to respond by also developing integrated delivery systems. just acting as insurers, which is take the primum and pay the doctor. they'll begin delivering the care. i note in the book some early examples of this. well point bought a 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 at low cost. saved 20% off the usual payments. that high cost, low -- that high quality, lows cost arrangement, well point i'm sure is trying to figure out what the secret sauce is and spread it to its other arrangements. similarly, united has this group, on thumb, and they have employed doctors in markets. they're getting into the provider arrange: you'll see the evolution of hospitals adding the insurance function to offer to deliver it and insure arers offering to provide care and becoming integrated delivery system and the traditional insurance company going the way of the dinosaur. not going to happen overnight. an evolution over the next decade. but as i predicted in 2025, that i think is where a lot of these

insurance companies are going. >> what is the term for interesting gratessed systems but accountable care -- >> guest: accountable care organizations are really -- they're part of the affordable care act, and i call them sort of intermediate species in the evolution of the healthcare system because i think they're a bit like the neanderthal, which is they're there. what they lack is the insurance risk management function. when you add that, then they're integrated in the sense they integrate the insurance function and delivery system and integrate care from the outpatient to inpatient to skilled nursing facility rehabilitation hospital. that's the ultimate, and i think that's where we'll begin to go increasingly. >> host: one of the ideas that you have spoken about -- frankly, everyone in healthcare has spoken about for such a look -- long time -- is making information available to consumers, and there's a

challenge -- granted, challenge enough sometimes to know what parameters to measure, and how to represent them. then how to even understand them, if they are well-presented and well-measured. how do you envision that working? >> guest: i think this whole idea of transparency of prices and quality, definitely going to be key to the future, and right now we know, almost all of us know we don't have transparency on prices and we don't know how much is that colonoscopy going to cost, the mry i, not just the list price but the actual price we're going to be responsible for or the insurance company is going to pay. that transparency is going to come, and one consequence as insurance companies say to people here's a reasonable high quality place and here's the price. we'll pay this price itself. if you want to go someplace that

charms more that's a differential. then the question is, aim getting good quality at the low price? that's what we want to know. and measuring that quality is a little more challenging. we don't have the best quality metrics across the board. we have some good quality metrics in some areas and not in others, and getting it public and understanding not just which hospital and surgical facility but which doctors are really high quality? i think that's the challenge for the next decade. can we solve that problem? absolutely. we're going to get a mashup of data from medicare and private insurers, and i think, again, a lot of money to be made in developing those quality met tricks, and being able to provide them to the public, and i think you're going to see a lot of smart, smart people working to develop them, and i think some of them are going to begin -- going to become public companies, and i think that actually is a big growth area

that will make the system nor efficient. once people know what good quality is and reasonable prices are, i got to believe they're going to respond to those incentives. >> host: you are nothing -- if nothing. >> guest: i'm an optimist. >> host: right. and actually, we only have five more minutes left. not enough time to good through the list but it's very interesting. we should mention five other trends. you mentioned insurance companies as we know them. and this one that i'm very interested in, v.i.p. care for the chronically ill and mentally ill. that's a challenge. >> guest: 10% of the population uses two-thirds of the dollars in the health care system. that's where the quality problems and the coasts are. every healthcare system will focus on those people with chronic illness who are use most

of the resources. from what i can see around the system, the best places can cut the expense about 20% and can improve the quality of care for these people. once they sort of got a system in place, the standardized care processes, attending to people at home, preventing them from getting sick and going into the hospital, and save that 20%. they'll look for the next thing to save money, and it turns out that almost everyone agrees -- although not everyone -- the group of health policy people and health economist, it's in mental health. not in the very severe schizophrenic but the other. the depressed patients, anxious patients who use the healthcare system to soothe their anxiety. >> host: i think we know how to treat schizophrenia -- the most severe mental illness. there's enorm community services and in conjunction with the civil system, a thereto be done there. >> guest: i agree. a lot to be done. as i say in the book, by the end

of the decade the system will focus on improving mental health and we'll have finally apart between physical and mental health. >> host: emergence of digital medicine closure of hospitals. >> guest: a lot more wireless monitors, you take a picture of a rash, send it to a dermatologist, she never sees you but they can diagnosis it. they can tell you whether it's so severe you have to good in and you really need medical attention or you u.s. just give -- just give a prescription. monitor your glucose every day, that's going to be very, very common by the end of the decade. >> host: just mention the other two, and then one minute -- end of employer-sponsored health insurance, end of healthcare inflation, and finally, transformation of medical education. i find that very interesting. no well, i am particularly frustrated by the fact that

medical education is basically the same as it was 100 years ago, despite all the change in how we deliver care, and i don't think it's kept up. in any dimension. so if you just look at the timing. we take too long to train doctors. we could train them in three years. in medical school, as opposed to four. we could do a more efficient job in training specialists. when i was oncology trainee, training to become a cancer doctor, we did one year of clinical work, taking care of patients, learning how to take care of breast cancer and lieu team ya, and the then two years of research. not many of us stayed in research. and you don't need three-year training if all you're really going to give people is one year of clinical care. not 15, 20% of trainees are going into research. don't need too train everyone in research. similarly what what teach doctors needs to change. we need to have more management, learning how to work in teams.

the future of health care is team-based. nurses, nurse practitioners, hopeful health aides, dieticians, physical they're aways. we don't train doctors and teams. when you're a resident where do you train? the hospital. the future of medicine is care at home and we need to train doctors in outpatient care. so this will be a comprehensive revolution in terms of how long we take it, where we're training people, and what we're educating them about. i see that happening, again, medical education hasn't been changed radically in 100 years but i think the next decade and a half will see a big change. >> host: thanks very much, zeke. "reinventing american health care." a tour deforce. >> guest: thank you very much. appreciate it.

>> that was after words, become tv's signature program in which authors of the latest nonfiction books are interviewed by journalist, public policymakers, legislators and others familiar with their material. after words airs every weekend at 10:00 p.m. on saturday, 12 and 9:00 p.m. on sunday and 12:00 a.m. on monday. you can watch after words online go to book of.org and click on after words in the book tv series and topics list. >> book tv recently spoke with scholars at the american enterprise institute. public policy think tank in washington, dc to fine out what they're reading. paul wolfowitz is currently reading donald kagan's on the origins of war and the preservation of peace.

he his book is timely. psychiatrist ask author is reading a short store collection in order to see war through the eyes of a soldier. book tv will cover an e'vette vent with phil clay. check our web site for air dates. ei collar and best selling author of the bell curve, charles murray, is reading, the sun also rises, senior names and the history of social mobile,it. and a quick look at what schools are reading. >> up next, duke university proffer talks bit his book, the honest truth about dishonesty. ...