honest with you the only reason i notice because i have an amazing staff that helps me understand how i can access that power. the average consumer does not have a clue. it seems to me that's what the organizations that fund you mr. spiezle have to be more worried about is how the consumer becomes more empowered in this environment read because it's the only real way. >> it's i respond i clearly agree that consumers have a shared responsibility to make sure they are updating their computers and patching their systems and practicing safe computer practices absolutely but again going to a trusted sites that they know of any type it in. all the things we tell them not to do and they go to a trusted site unexpectedly exploit has never been disclosed to them before. there's no amount of consumer education that can solve that problem so if a shared

responsibility as stakeholders consumers networks and publishers alike care. that is why we are having this discussion today. >> my final question is your organization and a lot of i am guessing it as a company selling security projects i would want to invest in you and make contributions to you so i'm assuming a lot of your contributors are backed the people who make security products. >> actually the contrary to that over 50% of our funding comes from publishers clearinghouse twitter web sites and web properties we are depending on consumers to trust services. >> you provide the services the workshops you provide are they free of cost to people who come, or is part of your income that you actually need? >> are training workshops are cost recovery basis and we hold some throughout the u.s. and europe as well. >> so you don't get any revenue stream. >> they are designed to cover operating costs.

>> thank you. >> thank you senator mccaskill. senator portman. >> thank you for holding this hearing. the chart tells at all. we have seen this dramatic increase and so it's appropriate we are talking about it and i agree with mr. johnson said earlier. we want to make sure that continues is critical to our economy. earlier we talked about a lot of solutions and i don't understand enough about the problem to know what the resolutions are frankly but verification standards certainly seem to make sense. he talked about information-sharing protocols and the protections needed to make that work well. we would like more information on that if you can give it to us for the record. the networks themselves the measures for them seems to make a lot of sense and we talked some about enforcement. i want to ask you about that in a second but enforcement

requires the information which is important to get that what mr. subbot he talked about in the financial system now. i've a question to back up so i can understand this problem better. mr. salem you are with google kind of a big company and i understand that you scanned 100% of the ads in your advertising networks. is that true? >> we scan 100% of the ads initially. not every ad is necessarily scanned unless it's hosted by google so we have third parties and we have google ads as well so all of the ads for google are scanned before sir. a few of the third-party. >> let's focus on the ads that are google hosted. if you are scanning all of this adds an them out for thai scene that ended up on youtube earlier this year circumvent the

scanning process. it was a major issue and everybody was aware of it. how did that happen? >> it happened because there were a lot of third party compliance ads and a lot of javascript calls. there are potentially tracking our analytics along with an ad. when we scan in and we scan the ads and it looks great. we continue to scanned ads based on the risk and how often it shown. these ads went back before we had a chance to rescan them. >> the vulnerability was there that you did have a continuous ability to analyze that ad and it went bad so what are you doing to address that vulnerability? >> what we have done is go to the risk profile in of these ads. we basic we lowered it and are scanning often. >> are you scanning often enough to avoid what happened with the youtube malware again? >> we believe so. we scan all of the ads that we

host and we rescan them quite a bit. we have hundreds of thousands of ads taken down continuously. some of those are based on the web sites they go to their bad in some on the -- the go bad. >> you are focused on preventing which is this it is disabling malware are necessary. when prevention fails as it did with this huge incident what can consumers do to protect themselves from harm inflicted by ads on google's ad network or any of the suthers networks? >> the web site itself is on the safe browsing list so users that use chrome mozilla or safari or our already covered by this. also the specifics were patched version of internet explorer so this is telling you that these are the users that got the malware or we don't know how many downloaded the malware.

>> you don't know what the damages. >> when we look at the numbers we look at what is the potential we look at our last scan and that is where we consider all of that potentially bad advertising but that basically shows us the protected user is knowledge that they need to use two use anti-virus software. that in general is not just from melford rising but malware in general. >> let me ask a question of oath of view about consumers that you talked about consumers needing more information. what can be done to inform people that they have been infected so they know it without tipping off the cybercriminals involved? is the one area as senator john fund -- johnson was talking about this. it's impossible for people to

know how to react if they don't know they have been infected and how we going to look at this? >> thank you senator. as the gentleman from google said cybercriminals are choosing users to attack criteria that are not ours and the servers that are not our so we don't have the exact list of users or ip addresses which were attacked nor do we have a direct relationsrelations hip to those users so direct notification is a difficult issue. that's why we do general notification that we post on her blog and had discussion with the press in the safety and security web site that gives tips on how they can patch your system and free anti-virus tools to check whether or not the malware is --

this seems to be what senator levin is saying is you guys don't have the incentive you would otherwise have because consumers don't know that them out for thai --

malvertising came from you. how do you respond to that? i think if you don't know a particular ad network there might be a disincentive to address it. otherwise there would be a much greater incentive. this came from my yahoo! account the advertising i thought on yahoo!. what's your response to that? >> i can actually say something and clear up the misconception. just because you've visited a site because of the anonymity we don't necessarily know who you are so as far as even being able to let people know oh this ad could potentially have malware. we don't know who you are. it's all anonymous and it's done on purpose that way. that's one of the reasons why someone can target you specifically that can target potentially your gender or age group based on the filing but that's about it.

we don't necessarily know who you are so that's nearly impossible. >> as to the motivation obviously this kind of incident happens. it has an impact on the trust their users have the mess in that trust is absolutely the bedrock of our business so maintaining user trust is essential which is why we have a security team a trust and safety team and anti-malware team and why we are working on this issue 24/7. >> you can't tell your customers that they were attacked. >> is mr. salem said we don't have that information. we can't directly tie bob smith looked at this advertisement. >> and it's good to have that connection to a bigger ad. would that make her more effective enforcement regime and you would be in a position to respond or the ad networks would? >> i believe senators that would be significant privacy issue to track individuals. >> i fun and interesting looking through some of the in advance

this is some cybercriminals carry out attacks on weekends and holidays because they figure your guard is down. is your guard down on weekends and holidays? >> absolutely not senator. thank you for the question. it is you are guilty until proven incident so we scan before an ad repeatedly afterwards and if anything is strange that ad is immediately pulled and our people are paid schneier security team works 24/7. >> so consumer shouldn't be worried about weekends and holidays? >> absolutely not.

acting trust in ads is focused on deceptive advertising and fraud and one of the reasons we put together is single place you can report advertisements to make sure all the companies involved so we can take them down and then those advertisers. >> thank you. >> thank you very much senator portman.

we think our participants on this panel for your testimony. it's been extremely helpful and we will now move onto our next next panel. >> you mr. chairman? it's a little disturbing when mr. salem and mr. subbot dispute the facts. ronald reagan used to say that facts are stubborn things. i also am a bit disturbed by it's somebody else's problem in the testimony and heightens my motivation to reinvigorate legislation that we tried before but also tried to make google and yahoo! understand that this is a much bigger problem than the testimony your testimony indicates they think it is today and it's a bit disappointing. thank you mr. chairman. >> thank you very much. we have three boats, for votes in five minutes.

>> i just want to ask yahoo! and google the locations of scanning how many scans of you doing and if you want complete coverage what are we talking about here? 1%, 100%? >> we scan all this was 100%. >> you where we scanning and rescanning. what would be complete coverage versus what%? at is it an impossiblimpossibl e question to answer? >> i think. >> can you give it a try for the record. the other thing i want to know is how many people in your organization are devoted to cybersecurity the number of people because i want to ask the government they -- how many they have. >> 100 or send it as we scan hundreds of times based on different metrics and as for the number of people i would say we have over 100 people working on

security and trust. >> you want to give an answer to the number of people quickly? >> google has 100 people specifically working on security. we have over one thousand one a come store at policies and making sure that our ads are compliant. >> thank you and we can think this panel. you are all very helpful to us. we appreciated and again i want to thank senator mccain for bringing us to this point. i agree with his comments and >> finance committee will come

to order. the finance committee meets today to discuss the nomination of sylvia burwell. she will be the secretary of department of health and human services. if one thing has become clear in the months since the president announced her nomination, it is that she is tremendously well respected. ledonly by those she has and worked with in the administration, but by democrats and republicans in congress as well. that should not come as any big surprise. last year the senate confirmed her nomination to be the director of the office of management and budget by a vote of 96-zero. that was a big and well deserved bipartisan endorsement. ms. burwell's background of

results shows why she has earned that respect. she is a graduate of harvard and oxford where she was a rhodes scholar. in the clinton administration as a top economics adviser to the president and the secretary of the treasury. she has years of experience in the nonprofit sector. first, as chief operating officer of global development at the gates foundation, she led efforts to summon the most pressing global health challenges of our time. as the head of the walmart foundation, she was a tireless advocate for the veterans hiring program. she was a leader in the fight against hunger. ms. burwell has also been a steady hands as an effective leader at the office of management and budget. thehelps navigate

difficulties of the government shutdown last fall. in the year that she served as deficit, the federal has continued to plummet. there's one other important fact he keep in mind. the committee considers her nomination. you said we cannot leave this generation's office of management and budget without being thoroughly steeped in health care. health care is simply the biggest structural challenge in the budget and an essential part of the job. everyone understands the task ahead for ms. burwell. the affordable care act will be your central focus each day she serves as secretary. my view is that there are plenty of ways both parties can work andther to improve the law

ensure that america does not go back to the days when health care was just for the healthy and the wealthy. there is a great deal promising from ms.t medicare burwell. medicare's rate of spending growth is slowing. according to the latest data, spending went up by 1.9% over a two-year period. that is slower than the overall economy and it is far behind the store great. and ae of lower premiums stronger future for medicare, it has been significantly boosted by these developments. with the bipartisan support of this committee, there been many improvements to medicare transparency. the largest single purchaser of health care will lead the way in making sure that all taxpayers

have the information they need to get the best value for their dollar. we look forward to working with to once you are conference continue that effort. next congress has never been closer to repealing the medicare physician payment system and replacing it with bipartisan reforms. that would reward the quality of care. i am looking forward to working with you again once you are confirmed. the committee looks forward to working with you on what i view as the single biggest challenge for medicare's feature. that is dealing with chronic disease. the committee will have to maintain a close relationship with the hhs secretary on various social services.

i will wrap up by congratulating our nominee and thank her for joining the committee today. has clearmation vote evidence that you are a respected and committed individual. i hope to have your nomination approved by the committee as quickly as possible and with equally strong bipartisan support. thank you. i appreciate you convening this hearing. we have asked ms. burwell to serve as the secretary and i'm very pleased that we have one of my long-time favorite senators here to testify for you to stop is a doctor in the senate who has certainly done it very well. i want to think director burwell for her willingness to serve.

somethingrt by saying that i think you already know. if you are confirmed to this position you will have your work cut out for you. the health and human services department surpasses any other cabinet level department. the budget is almost a trillion dollars. that makes it larger than the department of defense. it is double the department of defense. hhs touches the lives of hundreds of millions of people. from cradle to grave, it receives more grants for improving and finding new diseases for those who have run out of other options. it includes the national institute of health, the fda, the center for medicare and medicaid.

cms is the largest health insurer with an annual budget of 800 billion dollars. i believe you have the qualifications to do the job, but there is much that you will need to do in order to assure members of the committee that hhs is heading in the right direction. it is a turbulent time that lies ahead. one of the greatest challenges shoring up the exchanges and making sure that they are operating efficiently. recent reports of the numerous issues faced by the state exchanges at something to implement the law have been cause for great concern. states are required to have a health-care exchange where citizens can go and shop for

health insurance. they have the option of starting their own exchange, using the exchange provided by the federal government, or in hybrid will stop they are determining what type of exchange to implement. were given innts two stages for those days who were building all report -- all or part of their own exchanges. they quickly decided to build their own exchanges. in total, they spent $4.7 billion on their exchanges. what is troubling is that seven days from the district of columbia failed to build a successful website. received more than $1.25 billion to build

these exchanges. that is the huge amount of taxpayer dollars. it was apparently spent with little or no accountability. many are looking to rebuild their systems. introducing the state accountability act. it would be a state-based exchange and they decided to grants it and repay the that they receive from hhs. in addition to overseeing this massive expansion of benefits, you also be charged with the longevity and the sovereignty of the existing medicare trust. it is projected to go bankrupt in 2024. between now and 2030, 70 6 million baby boomers will become eligible for medicare. the factoring in dallas,

program will grow from 47 million beneficiaries to 80 million beneficiaries. that will be 2030. maintaining the solvency of the program and continue to provide basefor an ever-increasing will require creative solutions and a good secretary at the helm. i'm counting on you to be there. one of the most important responsibilities you have on this committee is to be responsive. several commitments were made by nominees about providing timely responses. more often than not, i have been deeply disappointed. that youray commitment will stand the test of time beyond your confirmation. words and promises matter a great deal. i hope you will be up to that challenge. overseeing the conflict infrastructure of a department

like hhs is not a job for the faint of heart. naturally, i wish you the best of luck as you learn to address these challenges and as you both through the confirmation process. you will need all the luck you can get. i am grateful to people like you are willing to take on these top responsibilities. we are grateful that you are willing to serve. thank you. >> thank you, senator hatch, and as we have ever since senator baucus went to china you and i will be working in a bipartisan way on this. it is a tradition to have the nominee introduced any family members who are here today, so why don't you do that? .> thank you, mr. chairman i would like to introduce my husband, my sister, and at 2

very good old friends. thank you. >> we are glad you are here, and as senator hatch noted, public service is not, for family, for the faint hearted. we are glad you are here. iousever-grac rockefeller is here to introduce some west virginians, and dr. coburn is on a tight schedule, so why don't we hear from you and then we will hear from home state senator rockefeller. let me say what an honor it is to introduce ms. burwell to the committee. i have worked with her for the , and prior too her confirmation as omb director , and i actually look for people who have strong trade -- strong traits, and the fact that she is

willing to make this family sacrifice, and it is a family sacrifice, is reassuring for us as a country that we would have somebody -- i thought i would talk about 5 areas of sylvia burwell that not everybody else knows will stop the first is that she is competent. says something, because so often we have people placed in positions in washington that aren't competent for the task at hand. the second is that she has outstanding character, and i have experienced that over the past year working closely with her and the people at a one b on the problems we have seen both at home and security -- homeland security and cyber and other areas. when you have somebody that is competent and also a strong , you find a way to get past your differences to solve problems. finally, as senator hatch

mentioned, responsiveness is a key for congress. i have to tell you, i found her remarkably responsive. my partner and homeland security, tom carper, has as well. that comes along with her commitment. she is going to be committed to do the right things and keep hungers involved -- keep congress involved. double make her an outstanding secretary, and that is she is a great listener. even when she has her mind made up, which sometimes happens, she will listen to another point of view to gain information that she might not have. that is a characteristic too often that we don't see as members of congress and membe -- in members of the administration, whether they are republican or democrat. finally, because she is west virginian, she comes to washington with a lot of common sense. is avorite quote is there

symbol half full -- thimble and a half full of common sense in washington and she is the half. i will support her nomination on the floor and do everything to help her be successful at if she is sot hhs, given that responsibility. i thank the committee. >> senator coburn, thank you very much for those powerful words and focus on competence and common sense and accountability. that is really quite of the realm in terms of the nominee. i know you are on a tight time schedule. chairman rockefeller is here for another west virginian. too, want to thank senator coburn. burwell, it is not usual to get introduced by him in such

terms. judge -- hestrict is a very strict judge of character, strong moral aspect to everything he does. i am very happy that he has introduced you. me toan easy thing for do, but first i have to point out something of interest. on the commerce committee we were going to have a really interesting hearing in this room ncaa and the student athlete, it or is that really athlete student, and what are we doing, what is the ncaa doing, what are universities doing to make sure athletes are getting the academic training they need to. i think it is going to be an interesting hearing. the reason we were going to come it wasroom is that going to be packed because it is a subject of great controversy, but no, pushed aside by a higher

order. but the order is that this room is an even half-full. -- isn't even half-full. what makes me happy about that is that there is a general understanding in this somebody and certainly on this committee that you are that really competent person who relishes challenges and can balance challenges with family response abilities. you are just that way, and that is one of the things about growing up in a small community. i introduced you for the first time 16 years ago. we were becoming deputy director of omb at that point. more recently, i introduced you again to become director. that was easily done. could not be more proud to speak for you and to present you to this committee.

i have done this a lot with people but i don't think i've ever been as proud as the person as is sure of my feelings have with my feelings about you. respect for your intelligence, your integrity, what i would call a ferocious integrity, a work ethic beyond contemplation, but all the while, you are relaxed, andappear as senator coburn said, you do listen. you are a very good listener. it is terribly important. and the business of writing letters you will do not because you have to do it but because it is in your interest to do and you will find a way to do it. i think you are going to be a superb secretary. the department is absolutely gargantuan in its size. it's millions and millions

of americans, food and drug supply, protection of our country from outbreaks of attacks, theerror medical research we rely on for cutting-edge treatments, but andh we are underfunding, federal investments in global health, which i don't think most people know that much about and don't necessarily associate with your position. i think it is impossible to overstate how important the secretary of hhs have that degree of organizational intuitive skill. not that they have to work at it hard, but it is just born with them and it is part of how they do things and people come to understand that and they draw people to them because, in the words senator coburn used, competency. competency is a cherished commodity, and when people are in a high position and have that, you go want to work for

them, people want to work harder for them. and the country feels prouder of them and maybe even the press is nice to them. so anyway, here you are, a proven manager, public and private, and so much the right person for this job that it is just a cliché to even say it. are ahe fact that you proud native of west virginia is very important. it is very important in character formation. and one's worldview. in that case, not a large worldview. i have known sylvia her entire parents, her wonderful cleo and bill, family, friends. i have attended church with your family. i was at your wedding reception. you interviewed me -- i think

you told me when you were 6 years old, county courthouse steps. i have no idea what the question was, but i probably didn't answer it very well. i was probably terrified. i just have a deep and abiding , and because you of you, your family. i think family and you come together in a perfect way in american life. you are brilliant. you won't say that so i will have to do it for you. and as has been indicated, a harvard, rhodes scholar, and yet somehow you remain humble, always hard-working. again, this word "ferocious integrity," which means everything to me, and the central devotion and your purpose in public services to help people better their position in life.

you don't focus on just one group, but everybody has to have a better shot in life. you are possessed by that public passion. partly fromo come your grandparents, because they got here and somehow helped instill that in you. you could have made a fortune when you graduated from harvard, and onto any place in the world, any law firm. you didn't. you headed directly into public service. you spent the majority of your life in public service, which is filled with controversy and not enormously high wages, and a lot of frustration, a lot of sleepless nights. that, hadn't been doing you were working for organizations doing that -- the

, out inndation bentonville, that foundation. in both cases you are working on a worldwide basis. office, we in my talked about one of the things i want to work on after i leave the senate, baby teeth, the health of teeth, which most people overlook, but which is absolutely essential in the moral self-confidence, development of any young person, and appalachia it is a real problem. you spent a great deal of time at the walmart foundation doing exactly that. when it comes down to it, you want people to have health insurance, you want them to have that peace of mind. i don't need to do this, but i am going to do it because i so enjoy doing it. your service in federal

government is absolutely unmatched. the clinton administration staff director for the national economic council. wow, that is context stuff -- not that anybody can tell you what goes on there, but the future of the country depends enormously on what does go on their. chief of staff to secretary robert rubin. deputy chief of staff to the president of the united states. deputy director of the office of management and budget, and then the director of that. you are central to crafting the clinton budget in the 1990's which led to budget surpluses for 3 years in a row, something i'll most impossible to imagine -- something almost impossible to imagine, and enormous growth economically in our country. hereearned -- i have found through your work with the clinton administration -- you just work because of the way you are work across the aisle with other people. it is your instinct to try to find common ground.

you are very, very tough. i'm thinking about the example we just talked about -- dust in underground mines. i wanted it to be one it is now two. i apologize to the audience for not going into this. ms. burwell did the right thing and came down at 1.5, the first time in 41 years that the united states government had addressed the problem of breathable dust, dust, leading to black lung. it was a remarkable decision. you make that decision. because of it, it is now in effect. your philanthropic works speak for themselves. you are going to be speaking for yourself. think of anybody more perfect to do hhs.

there were so many bumps in the road -- i think that is innate, and we have discussed that. enormous programs of the vast consequences. i don't think it ends. it is 15, 20 years before things settle out, and the various decks and crannies are taken care of, and people -- various nuts and crannies are taking care of, and people feel comfortable. and you just get down to the care.ss of doing health so we need you, sylvia mathews burwell, very, very much. i think you gathered from a statement that i am probably going to vote for you. [laughter] but you're not just about budgets. you are about people, and you are about fighting for people that other people will not fight for, and you are fighting for people who could use a little help, and you are fair to people who don't need any help. you are just a fair person. a tough manager. probably the smartest person in the city.

mr. chairman, i am proud to present you sylvia mathews burwell. >> thank you, chairman rockefeller. that was a wonderful introduction, and i will tell you, director burwell, i'm curious what you interview to rockefeller on when you were 6. [laughter] perhaps we will learn those secrets one day. at this point we would like you to deliver your testimony, and then we have 4 standard questions for nominees and we will be able to you with quickly -- able to deal with quickly and then we will have questions from the senators. we will make the prepared remarks part of the record in their entirety. please proceed. >> thank you, chairman wyden and ranking member hatch. inviting thank you for me here today. i am honored that president obama has nominated me for secretary of health and human services, and it is a privilege to appear before this committee. i want to thank senator

rockefeller and dr. coburn for their kind words. i am honored to be introduced by numeral to such extraordinary public servants who have both spent their lives helping others and delivering for the american people. i am especially grateful for my husband and our children, for their tremendous support, and while my parents couldn't be here with us today, i want to recognize them for their instilling within me and my sister the enduring value of public service. as a second-generation greek immigrant, i was raised to be thankful for the tremendous opportunities this great nation offers and to appreciate the responsibilities that come with those opportunities. westghout my childhood in virginia, my father an optometrist and small business owner, and my mother a teacher set a great example for me and my teacher through their engagement in service through our community and our church. it is that example that is an important part of why i am here today.

whether in the public or the private sector, working across a range of issues, i focus my work on it 3 things -- the link strong teams on a strengthening relationships, -- and building strong teams, strengthening relationships, and delivering results. in my role as omb director i worked with numbers of this committee and others to support efforts to return the budget process to regular order and drive towards progress on issues we all care deeply about. toinfirmed, i look forward working alongside the remarkable men and women of the department of health and human services to build on their work to ensure that children, families, and seniors have the building blocks .f healthy and productive lives these issues are fundamental to all of us, whether it is the chronic condition of a child with love or the safety of the food we eat every day. i respect and appreciate the importance of the challenges before us. as we meet here today,

scientists and researchers at the national institutes of health are working to find cures for some of the world's most serious diseases, and experts at the centers for disease control and prevention are working to prevent them from spreading. the fda is protecting the food the medications are doctors prescribe us. parents and grand parents rely on the centers for medicare and medicaid services. millions of children benefit from and start. millions of americans are living with dignity in their own communities. the department work to ensure accessible affordable quality health care through the elimination of the affordable care act is making a difference in the lot -- implementation of the afford will care act is making a difference in their lives and committees while strengthening the economy. all of this work promotes the foundation of a stronger middle class and healthier communities.

mr. chairman and members of this committee, thank you again for the invitation to speak with you today. i have a valued the conversations we have had over the course of the past several weeks, and i'm hopeful that we will have the opportunity to continue to work together closely in the months ahead to deliver impact for the american people. with that, i would be pleased to answer your questions. thank you. >> director burwell, thank you. we have standard questions for all nominees so let me go through those now. is there anything you are aware of in tobacco that might present a conflict of interest -- in your background that might present a conflict of interest the duties for which you are nominated? >> no, sir. >> do you know of anything that might prevent you from thoroughly and honorably discharging the duties of your office? >> i do not. >> do you know of any reason not to answer to any reasonable summons if you are confirmed?

do. >> very good. now, colleagues, i will proceed with questions and we will go with a 5-minute round. start with amight, question about another priority of the committee. we will have many questions about the affordable care act. and that is fixing this broken down system of reimbursing physicians under medicare. what is happened is we have a system that is poorly coordinated and doesn't reward quality. what congress does is put patch after patch after patch on it. senator murphy was in the chair when we were discussing this, and he is the youngest united states senator, and i looked up and said i don't want when senator murphy is eligible for

medicare for us to still be patching and patching some more. the president in his budget made a commitment to working with congress to reform this, and particularly, repeal str and replace it with a system that would reward coordinated care and reward quality. our colleague senator hatch, in my view, deserves a great deal of credit for this effort. if confirmed, would you commit to repealing and replacing the current broken medicare reimbursement system for physicians before the end of this year? >> senator, i am very glad that you raised the issue, and i'm very glad that income actually, my meetings, and is something that is my partisan, that this issue has come up will suck even though there is a fix that takes us until march, -- that this issue has come up. even though there is a fix that yous us until march,

yourself are played a leadership role in proposals that will make a difference, and if i am i am excited about the opportunity that we can work together to get a permanent reforms,that has both what are important, and a permanent solution that helps physicians have predicted predic through time -- tablity through time. >> thank you. it is clearly urgent business, because we can get it right now at rock-bottom prices. it is only going to get more and more expensive. we appreciate your commitment on that. let's turn to chronic disease. there is been bipartisan interest in this committee on it. i see my colleague senator isakson, senator toomey, senator bennett has had a great interest in this. medicare in 2014 is dramatically different than medicare when the program began in 1965.

it is largely about cancer and diabetes and stroke and heart disease and all timers. -- alzheimers. the senior breaks their ankle, and we certainly hope that doesn't happen, that is something like 15% of medicare all about chronic disease. i would be interested in your thoughts about how medicare can step up and address this extraordinary challenge, because this is really going to be what medicare is all about. i'm very appreciative of my colleague from georgia. he and i have introduced a bill which my colleague senator isakson appropriately named the better care, lower-cost act. in another body have been supportive of as well, and as i mentioned, senator toomey, senator bennett, a number of senators have interest in this. what is your take on the next step to take on the premier challenge for medicare in the years ahead? >> the issue of chronic disease

is one that i think cuts across the entire department. certainly, medicare is where it is being paid for, and a big part of the delivery of that service with regard to chronic, but one also needs to back up to ,ih and the issues of research and all through the issues of cdc and actual delivery, as well providers.rain our the issue of chronic disease -- this is one of the things, as we think about many health care issues, but particularly one as large and influential as this, that you need to think about it across the pieces that are within the department, so that we are getting the right solutions in place, the right data and analytics that show us how we can work on these issues at the front end of them before they get to the point with they are costing us so much. we work on the delivery system in terms of how we in communities and directly within hospital systems and insurance systems are providing that care. medicare is an important part of it, and the tools we can use into medicare, because it is

such a large and influential part of the system, but i think we have to think about it across a number of different areas, including providers. >> that me see if i can get one of the question in. -- one other question in. with the aca is about improving access and quality and decreasing costs. but as with any landmark law, there are challenges. since we are starting out, it would be helpful if you could just briefly outline -- you are going to get plenty of other questions, we know -- what are going to be your priorities in terms of ensuring the success of the affordable care act? >> with regard to the affordable care act specifically, there are 3 main things that seem to be the north stars. one is access, the second is affordability -- that is affordability for the individual affordability for actually the government in terms of all that we spend, as well as affordability for our economy -- and the third issue is quality. when i think about the act and

the implementation of it, what i want to do is, if i am confirmed, work to maximize across all 3 of those areas and think about the ways we can do better. >> senator hatch. >> thank you, mr. chairman. ms. burwell, one of the most sacred responsibilities that we as public servants have is to safeguard the hard-earned taxpayer dollars that the american families entrust to us. you rule seven states, including the -- numeral seven states, including the district of columbia, are having a dismal time. 2 of the states are abandoning their broken websites. based on the most recent reports, these states receive more than a quarter billion dollars to plan and build their exchanges. some of these states are waiting for additional federal funds to continue their failed experimentation, at least in my view. askve 2 simple questions to you and i would appreciate a yes

or no answer, if you can. first, do you believe that these states which have so negligently should beir funds required to reimburse taxpayers for their failures/ >> will with regard to the , we need of each case to understand where the federal government and the taxpayer have had funds misused, we need to use the full extent of the law to get those funds back to the taxpayer. >> the second question is could you give me and the american taxpayers a public commitment today that hhs will not give any more dollars to those of failed exchanges for more failed experiences? >> senator, with regard to the specifics of how those funds go forward, what i would do now comes because i'm not familiar with the specifics because i am not there, there are 3 things. we have to understand what went wrong. 2, when we do understand that, we need to go to the full extent of the law, if there are

contractors or others who have misled through contracts or the things. 3, we need to make sure that we learn from the mistakes in the exchanges that are not working and learn from the exchanges that are, such as washington state, where senator cantwell is from. >> your first and foremost responsibility as an appointed official is to be accountable to congress and the american people. one important way congress fulfills its obligation to taxpayers is by asking for information about your department's activities. over the past year, we have sent at least 5 letters to hhs that have gone unanswered. responses to questions for the record takes months. it forces events like this confirmation hearing to get answers, which are often incomplete. i have 2 straightforward questions.

do i have your public commitment today that he will respond to inquiries with no more than 30 days? >> senator, you have my commitment. hopefully you offered from colleagues that have had a chance to work with me over the past year, but that is something that i prioritize in terms of communication. >> i was very impressed with what senator coburn had to say and i agree with that. what, in your opinion, should be the records as the committee if this public commitment -- should be the recourse as a committee if this public commitment is not kept? >> i hope that you would pick up the phone and call would hope yu would pick up the phone and call me. one of the things that i think is a very important part of working and getting to a resolution -- as dr. coburn said, we don't always agree. if we can have hundred stations and those conversations can be specific, i think that is

something -- if we can have conversations and those conversations can be specific, i think that is something where we can work things out even if we do not agree. >> the administration has made at least 22 unilateral changes to obamacare without consulting congress. most recently, hhs announced it medicare fund to forestall benefit cuts. i asked secretary sebelius whether there would be any more and herto obamacare answer in my opinion was not very reassuring. i have to go -- i have two more questions to our. will you commit to limiting changes in the future? >> senator, with regards to implementation, i think the core objective is common sense,

implementation, and improvements within the context of the law, in where one needs changes the law, seek back. the president's budget does look for changes in the law. we need the support of the congress in order to do that. >> ok, my last question. expect more changes with obamacare, what will they be? regard to something that is such a large part of this if i cani do not know predict. the important thing is listening and learning as you go and whether the changes require legislative changes, to work with congress to do it. system in thee united states is a large, complex system. the law itself hopefully will improvements,king

but it is a complex system that i think will be evolutionary as we learn. one of the things that i am hopeful, if i am secretary, that listening and learning and making changes when appropriate is something one would want to do. >> thank you. >> senator rockefeller. ll, there is anwe wish to lower costs. i'm not sure if you remember -- when he was in your position and he came before congress to talk about the runaway costs of health care. he was sheet white. he disappeared for about a week. that was the impression. he was sheet white and he just predicted -- he had this horrible dire protection for the cost of health care, quashing

other good programs. which leads to my question. in making things cost-effective, cutting costs, lowering costs, which democrats love to boast about, when sometimes -- let's -- when example sometimes you run into the providing of adequate and good care, and that is sort of a sloppy philosophical thing to are becoming very difficult decisions. where it is more expensive to take care of certain kinds of people, certain kinds of illnesses. we lifted the annual cap and then the lifetime cap, that procedure was quite the opposite. that was to spend more money because having good health care for people is what we are here

for. those things are in conflict with each other. i wonder if you have an operating philosophy? think thererd -- i are difficult choices. a key and operative word is "choices." at the office of management and budget we have had the opportunity under the tight budget levels, our current 15 levels, when you take into and grossa receipts veterans benefits, your levels are the same as last year. when i think about difficult choices, what i think about is getting as many of the facts as one can and making sure you lay out the different choices as best you can. some things are hard to compare and choose between but that is part of putting budgets together and part of the choices we will have to make in the health care space, understanding quality as well as understanding cost. >> you have been director of omb, which i think one could

also say as one of the most difficult positions around. your life is full of choices. some are ones that only you can make. so, you have your experience. it it is your inclination, when you have difficult situations, you devour that. the nuances of difficult problems, to try to solve them. with your omb experience, as you large, thererit have to be some things that occur to you, impressions, and how over the years -- i do not just mean the recent years, but over the years how things have not gone as smoothly as we would like. have impressions beyond the affordable care act and the department as a whole.

one of the things i believe about setting priorities and a new agency when i go to something new, and it reflects one of the comments that dr. coburn made, and that is listening. i appreciate your time. having the time to speak with each of you. the second thing i need to do is speak to stakeholders, which i the senatene since has to move forward. and the third thing is having the correct information to set priorities, which i think is an important part of managing any situation. >> i have 44 seconds. one of the things that has always interested me, and as a norzen, neither liberal conservative, it has always amazed me in very large and powerful organizations with a lot at stake, people with stars on their shoulders, people with reputations built up over a lifetime, but they become , and they probably

know it. you would probably know it. the question of people never being held ultimately accountable. for strange reasons, not always kind reasons, the only thing americans will settle for is if someone has been fired. because that shows "the administration really means it." do not necessarily walk away from that action at all, but there are other ways of disciplining people. but they somehow have to radiate out to the american people as well. the symbolism of reining in and controlling your department and how you do it is important. what say you? important.it is i think it is important having people around you that tell you when you are wrong as a leader. that is a very important thing, making sure you create a culture

where it is reported for people to actually question you in .erms of your leadership with regard to creating accountability, one of the most important things you need to do is verify what the goals are, are,at what people's roles and articulate that responsibility. by setting that out at the front end, i think it makes it easier to check yourself at the backend in terms of how people deliver. >> thank you. >> thank you, mr. chairman. , i appreciate you being before us today. i also appreciate the good working relationship we have had. i want to use my time today to talk about medicare and particularly medicare advantage and specifically some of the implementation concerns i have with regard to obamacare in general.

with regard to medicare, back during the debate over the affordable care act, the remastered cuts in medicare and the acts. we debated that at the time. i'm not trying to go through that debate again. many of us pointed out there advantages tont medicare and that was probably the most popular part of medicare among seniors. we are seeing the cuts to medicare advantage are real, they are occurring, and in addition, the administration seems to be pushing to additional cuts to medicare advantage, beyond even those contained in the affordable care act. i will not go through all the statistics about how the cms analysis shows one thing and other analysis from independent sources show other things. the bottom-line is, from all the analysis i am seeing, what we are viewing coming down the pipe with regard to medicare

advantage is the program will be facing double-digit reductions over two years. in idaho, we are already seeing the effect of this. of the counties and ido a no longer offer medicare advantage. in adams county, where beneficiaries have chosen medicare advantage plans, they saw their options go from 25 plans down to just five plans in 2013. my question to you is, do you understand the dynamic happening in medicare advantage? are you agree with the observations i have made? do you believe it is responsible to implement additional cuts in medicare as we see this dramatic impact with regard to the downsizing? >> this is an important question. i will start with something, medicarei think vantage is an important part of the system. >> good. and health care costs are an

important part of achieving fiscal responsibility and a lowering our deficits in the coming years. two priorities to keep our eye on. when i think of medicare advantage, i think of the starting point, where those initial changes were put in place in the prediction of what would happen with those changes. i know these are two different sets of changes you're talking about. we had a complex situation. we thought it would make things cheaper. however, we saw 14% cost overruns to regular medicare patients. have we think about that within the system question -- how do we think about that within the system? seen medicare advantage premiums drop by 10% as changes have been implemented. the other thing we have seen is an increase in quality. question of the additional changes being put in place need

to be monitored and watched with regard to, i think, everyone's objectives are to keep that quality access and premiums in control. the proposals that are in place are things that we believe could work and we need to understand and keep monitoring if we see things that are not working. things youome of the have started to describe. >> i appreciate that. i think if you monitor, you will see we have done unnecessary damage to the program. i hope that your commitment to keeping the program strong and viable will work out. i have one minute left. one quick question. changing quickly to obamacare in general, a recent mckinsey survey found that only 26% of patients who gained insurance under the affordable care act were previously uninsured. if this statistic is accurate, it means the vast majority of those covered previously had health insurance that was canceled due to mandates in the

law. first of all, the administration has allowed noncompliant plans to continue through 2014. do you support allowing this continuation of noncompliant qualify, or can americans expect another round of cancellations this fall? >> with regard to where we are in terms of the current plans and what will be continued or not, i think we are continuing through, have made all of the decisions and announcements that will take us through the next enrollment season. with regards to what we want to do, i think we need to watch and manage. one of the things, like medicare advantage, one of the things i think is important is how do we do common sense implementation that works for people? the system needs to work for individuals? work forstem used to individuals. it needs to work for providers. >> they give. my time is up. i will submit more questions in writing. >> thank you. >> congratulations on well-deserved support and

praise. i'm looking forward to working differenton some many issues. let me follow up on my friend and colleague's statement on medicare advantage. i sure the process of writing the affordable care act. i will never forget the budget office telling us he even if we cap the payments to medicare 50%ntage at 150 -- at 100 50%, we would save money. i believe it was the right thing save cost overruns. clearly there were cost overruns. the good thing is, we brought down the cost connected with medicare. we are saving money and at the same time, we have annual checkups with no out-of-pocket loss. -- out-of-pocket costs.

-- $1200 back in pockets to pay for medication. all good news. in general, i want to ask on the affordable care act, because the good news is we have more than 8 million people who have been able to sign up for a better plan at better prices. in michigan, over 270,000 people , which was way more than we thought, over 100,000 people more than we thought, have signed up. even though michigan did not start until april 1, medicaid expansion, we have enrolled the blue are eligible. that means people working minimum wage, 40 hours a week, finally will have the opportunity to see a doctor, take their kids to the doctor. my question is, related to the aca overall, when we look at the fact that it was announced last month that due to lower-than-expected premium rates the affordable care act

will reduce the deficit another over the next 10 years -- i know in michigan we are seeing pioneering organizations showing savings. a big piece of this will bring down costs for our businesses, for our families. what you see as the opportunities to continue to use the tools and the affordable care act to really bring down costs the right way, not by service -- taking away come of it dealing with the cost question mark >> i think continued implementation -- service,taking away but dealing with the cost question? >> i think continued implementation. there are a number of tools and opportunities. they are related to the delivery system and moving the delivery system into a space where it is about quality as well as cost reduction. there are a number of

organizations. you mentioned the accountable care organizations. the other thing is looking at the innovations. i think there are innovations state-by-state. one of the things i had the opportunity in the conversations that i had with a number of you was to hear about specific examples of things that were focused on quality improvements, readmissions,l salt other issues, or actual cost improvements. and those come together. i think we need to look at those models, figure out which of those models deliver the greatest impact with regard to cost and quality, and figure out which ones are scalable. that is the issue. sometimes you can get things to work. my experience in grantmaking is cost at at things to level, but the question is can you stay let -- scale it? >> i agree. we just committed -- we just

critical expansions of care and mental health. i understand talking with you that your mom worked in mental health. i feel much better now because no we have a secret ally. i am looking forward to working with you as we implement this ate effort.ant 8-st finally, alzheimer's disease. one out of eight people are diagnosed with alzheimer's. for us in thisnt context is that one out of five medicare dollars -- that is a medicaree out of five dollars are spent on someone with alzheimer's. i do not know if you have had enough to focus on this yet. one out of five medicare dollars and yet we have less than .25% that goes to research. i know the president is focusing

on the brain research effort and so on, but we certainly want to work with you on more effective ways to address what is clearly a disease affecting every family in america. i don't know if you have any comments or if you have had a chance to look at this at all, but certainly want your commitment. we would appreciate it, to really focus on it. yournter, thank you for leadership in the mental health space and alzheimer's. -- senator, thank you for your leadership. important, both in terms of research and delivery, care for those who are caregivers. we need research to treat and prevent the problem, what we do to treat haitians who are currently suffering, and also how we treat the family -- treat patients who are currently suffering, and also how we treat the families. that is important as well. >> i look forward to working

with you. >> thank you. senator grassley. >> congratulations, ms. burwell. i have two questions. i want to start with a very function i have that is oversight. i take that job very seriously. i have done that with republican and democrat administrations. will you commit to answering the letters i sent to your department promptly, fully, and without reservation? >> senator, i will work to make sure we are giving you the tools you need to do the work you need to do. >> i have a long lead and before my next question. so please be patient. when you were nominated, i said anyone put in charge of obamacare would be setup to fail. the thing with this law has really been by any means necessary. the legislative effort was by

any means necessary. implementation has operated similarly. the department has ignored the plane read of the statue whenever was considered necessary. needed to be creatively reinterpreted to make the program work, the department did so. as i said on the day you were nominated, you have a fresh start with congress and the public, but if you are going to make the most of that opportunity, you are going to have to do things differently than they have been done. marilyn tavener as an example. set in the same and share a few months ago. she committed to do things differently. now it seems that she has gone into the witness protection program. it has been so long since she was last in the chair or at my door. i hope you do not disappear into the same bunker. but this is what you face moving

forward. the department is supposed to implement the important mandate. it is a year overdue and significantly altered from the statute. the department is supposed to implement risk orders. this year, the illegal authority funds isbute questionable. and speaking of things that will be kept quiet, hunger is is going to want to know what the premiums will be for next -- congress is going to want to know what the premiums will be for next year. i always considered to be one of those states where we might have the highest premiums spike. the department will want tose y means then the department will shout from the rooftops how low they are. much as i think was done in the case of enrollment numbers. now, we can be very cordial today, that if you want to change the relationship your department has with congress, you're going to have to be willing to break by any means

necessary the mindset that we have seen for the past five years. my question to you then is this, do you think it is possible for you to change the by any means necessary culture at hhs that some of us in congress of you as bordering on lawless? >> senator, thank you and what i think is hearkening to mike's parents and what i have been at the office of management and budget with regard to, there are challenging issues. as i look around, with many of you i've had the opportunity to have to call with things are positive and i could talk about things that are difficult. in terms of a number of the members. that's something i consider my responsibility to do and i hope people feel in my roll at omb that i have done that. whether that's moving to more timely responses, the regulatory agenda is something that is ashley sometimes a controversial thing but since i've been the

director of omb we have been a time getting that out in both the spring and fall. the midsession review, a document that has a lot of numbers that some may use one way or some may use another, the midsession came out a week early. of something i didn't have to wait for numbers from the congress to do. i take the issue seriously. as i said this is space were actually hope that there will be direct communication if there are concerns. >> i will yield back my time, mr. chairman. thank you. >> senator nelson is next. >> senator grassley, senator rockefeller assures me that anybody from hinton, west virginia, populations less than 5000, is going to do okay. and i would assume that you can tell a lot about where a person is going by where they have been. and the fact that you have had such accolades from no less than senator coburn and the same from

me has the way that you handled yourself in a very difficult department that is as hardheaded, from the senator's perspective, as is hhs, and yet you were there, you were responsive. and i want you to know i appreciate it. i think there are a lot of other folks here. i just want to ask you quickly about medicaid and medicare. if we, if our governor and legislature in the state of florida expanded medicaid under the aca, it would cover an additional 1.2 million people that otherwise, when they get sick, they will end up in an

emergency room and all the rest of us are going to end up paying for them through our insurance premiums. not even to speak of, is the humanitarian thing to do for people to have access to health care. but the state legislature and the governor has so chosen not to do it for two legislative sessions. we have tried to show them that there is a local tax base that is time for a lot of things for low income people already. now, what the legislation's position has been, they want you to expand the medicaid waiver so that they can continue offering medicaid through an hmo, but

they don't want under the aca to expand that medicaid population up to 138% of poverty. so, we have shown them in an ingenious way that you can utilize, if the state doe