we'll take you to senate floor. there's a brief pro forma session while they're in a break. the president pro tempore: the senate will come to order. under the previous order, the senate stands adjourned until 10:30 a.m. on friday, august 10, 2018. august 10, 2018. the senate back for legislative business august 15 to consider the judicial nomination of marvin to sit on the fourth circuit federal appeals court in richmond, virginia.

when the senate is back in session we will have live coverage here on c-span2. this morning we will be taking you to a discussion with the national business group on health to rebut its annual survey of employers set up health care. >> i will comment on survey results for about 20 minutes and then we can open it up for q&a. just for some level city, national business group is a base consisting of 420 so companies, 74 of the fortune 100, and these are large multi-state in many cases global employers who typically self-insure their health care costs in the u.s. and they contract with health plans and pharmacy benefit managers to manage networks and to pay claims on their behalf but most of them are self-insured. business group mission is to keep our members on the leading edge of innovation action when

it comes to the delivery, the financing, the consumer experience and the affordability of the health care system. we look to accelerate the adoption of health care innovation as well, and try to improve and address the health and productivity of the global workforce. so this survey is give them what you've seen in the past. we redesigned the survey to provide insight into large employers perspectives on the rapid change we are seeing in the health care environment. that in addition to what we typically provide which is health care cost information, plan design comparisons and employee trend information, employer trend information terms of initiative there driving. we asked employers questions regarding how is the role evolving with the management of health care. we asked about the strategy lays

within the organization. when asked about their thoughts on industry consolidation at a local level with provider groups acquiring other provider groups but also at the national level with the proposed mergers of health plans and pharmacy benefit managers. we asked their thoughts on new in entrance from outside the health care delivery system come out of the silicon valley or out of employee alliances are other areas and what role will the plate influencing health care. we also ask about the role of ritual care in artificial intelligence and what will double-click in the delivery of health care in the future. we also asked about the pharmaceutical supply chain, as you know has gone to a lot of scrutiny under the last couple of years. we feel that the survey every may-two because that's what most companies make their decision for the upcoming year which is an important part of our time of the survey because this is a

survey about what companies want to do in 2019, now what they're contemplating for 2019. these reflect perspective of 170 large companies who collectively provide health insurance for over 19 million employees and their families. to put that in perspective, the company separate is based in survey provide as much health care coverage as the affordable care act provides for the public. survey respondents reflect on a wide range of industry sectors from hospitality to manufacturing and technology, to banking energy and others. over three-quarters of respondents have over 10,000 employees and over 30% of their spotters respondents have over 50,000 employees. so let's begin with the evolving role of the employer. we asked employers what role their health concerns placed in

their organization is a primarily a means to manage their health care costs or is a part of a broader organization strategy? in what we learn is more companies view their investment in health and well-being as an important element of their overall workforce strategy. in fact, to 27% of companies say that their health care strategy is an essential role in their ability to play the most competitive, productive, engaged workforce possible and to boost business performance. 19% employer state the primary goal of the health care strategy is to manage their health care costs. as companies are taking this broader view of health and well-being, we are seeing employers play an increasingly activist role in changing health care within the delivery system. and in actually this was the

high. no have are either actively pursuing alternative payment and delivery models, bringing greater access through virtual care and digital solutions, or both. 85% of employees are implementing accountable care organizations are high-performance networks either by directly contract with health care providers or working directly through their health plans. employer direct contracting of health systems and providers in local markets more than tripled from 3% in 2018 to 11% in 2019. employers are also continuing to expand its excellent model. we have seen growth across all procedure based centers of excellence. with cancer, cardiovascular, fertility and orthopedics experiencing the greatest areas of growth. employer direct contracting with centers of excellence doubled from 9% in 2017-18% in 2019.

we also ask questions regarding changes in health care industry such as their experience with consolidation and thoughts on industry mergers and new market entrants. there's been a significant amount of market specific provider consolidation over the years since the ac was enacted in 2010. this activity as hospitals or health systems acquiring other hospitals or provider practices or provider groups often flies under the radar. because at the local level rather than the national skill. we asked employers whether cost, quality and experience often referred to avenue the aaa were any better, the same or worse prior to consolidation. employers felt in most cases provider consolidation has not resulted in lower health care

costs. it often results in higher costs. costs. employers mostly struggled to weigh in on the effect of consolidation on experience and quality which reflects the lack of data available on these critical performance indicators. as result of industry consolidation on national skill we asked employers their perspective on the impact proposed mergers between health plans and pharmacy benefit managers will have on the aaa over the next three to five years, giving them an opportunity to gain some traction. 26% of employers are optimistic if these mergers will have a positive impact on the aaa. the theory being given the fragmented delivery system, the vertical integration of health plans and pharmacy benefit managers has the potential to provide a more holistic approach on health care is managed, cordoned dated and delivered. given the track record of

consolidation within this industry most employers are skeptical that they will see improvement from these mergers over the three to five year horizon and some employers believe costs will increase. additionally 70% of respondents believe new market entrants from outside the delivery system or outside the health care industry in general include including innovation from silicon valley or employer alliances are needed to disrupt health care in a positive way. this reflects the level of frustration by employers with the pace the change on improving health care today. i will add that this question regarding new entrance into the delivery system was not as a result of the jpmorgan berkshire halfwit and amazon coming together to the circuit was already out when that finch was announced that the survey was still open when that question mark and so i believe that 70%, there's some responses factor in

our influencing that outcome. our health system has not been designed with the consumer in mind. for example, after hours care and same-day access gets hard to come by or at best inconsistent. telehealth, for example, as an innovation at the new market entrant back in 2012-2011. it introduced consumers to what's possible virtually in the convenience, and access that comes with that. in 20 201214% of larger players offered telehealth as an alternate pathway to accessing health care on select services. today nearly all large employers provide telehealth as an option and 20% of the boys are expecting utilization of 8% annually or higher. but since the introduction of telehealth we have seen virtual care in digital solutions into the health care market at a rapid rate.

we never virtual care solutions for lifestyle coaching, chronic condition measures such as diabetes, sleep, nutrition, musculoskeletal and physical therapy, medical and surgical decision support and emotional up being an cognitive behavioral therapy. just to name a few of the areas that this has advanced into. today virtual care is not part of health care strategy, your health care strategy is not complete. in 2019, 70% of large employers will offer virtual mental and behavioral health services picks it up a will offer virtual help and life so coaching. and% will offer diabetes management and medical decision-support perch with or even virtual primary care services beyond what is provided typically through telehealth will be offered by 35% of employers in 2019. in artificial intelligence is playing equitable and virtual solutions and how to support

consumers. the business group posts before him three times a year where we invite started to come in and present to a group of 35 aggressive employers. who come together really to ace the adoption of innovation in health care. over the last three years we've assessed over 150 startups with over 60 making it through to present to these employers, and delete all of the startups have some element of virtual or digital solution as part of their portfolio. we asked employers have significant role virtual care in ai will play and how health care is delivered in the future. more than half of employers believe that virtual care will play a significant role in the future delivery of health care. additional income half of employers stated that implementing more virtual care solutions is their top priority for 2019.

digital solutions for physical therapy, sleep, musculoskeletal, diabetes management, nuclear, coaching and emotional behavioral health show the greatest potential for growth over the next several years. the proliferation of virtual and digital solutions has added to the complexity of services and employer offers its employees. engagement platforms have emerged in the market that can aggregate, procure, and potential integrate solutions to create a more seamless and personalized experience for consumers. employers believe engagement platforms promised delivers the given value value have a long way to go to fulfill that promise. so let's shift gears to pharmaceutical supply chain. the pharmaceutical supply chain this come under increased scrutiny over the last couple of years. the growth of high deductible plans has placed a need to spotlight on drug price rather r

had not been one before. we asked employers their view of the current promises supply chain and give them options across a spectrum from it's working well come to it needs to be overhauled. most employers believe the pharmaceutical supply chain needs to change. 35 . 35 assemblies that needs to be more transparent and drug manufacturer rebates should be reduced, but half of employers stated the pharmaceutical supply chain is inefficient, too complex and needs to be overhauled and simplified. more specifically, three-quarters of employers do not believe drug manufacturer rebates are an effective tool to drive down pharmaceutical costs. in over 90% of employers would welcome an alternative to the rebate driven approach to managing drug costs. additionally, the contracting model within the pharmaceutical supply chain has not kept pace with today's planned designed

reality. over half of large employers are concerned that rebates do not benefit consumers at the point of sale. managers have the capability to pull about the rebates forward to benefit consumers at the point-of-sale. and employers are moving in that direction. 27% of large employers will have point-of-sale rebate programs in place in 2019 and over 31% are considering implementation by 2021. another challenge for employers is the proliferation of pharmaceutical manufacturer co-pay assistance programs. these programs are designed to minimize a patient out-of-pocket cost for a specific drug by providing coverage through the drug manufactured to supplement the patient's health insurance. co-pay assistance programs have grown considerably over the past decade. to those not there were 75 drugs that had co-pay assistance programs. by 2015 that number grew to over

700. and today approximately 50% of brand drugs and 80% of specialty drugs now offer assistance to these programs. there are two concerns employers have with co-pay assistance programs. the first, manage and cope this is the programs offered drugs that have a lower cost option available such as generics. nearly 2/3 of employers are concerned that these co-pay assistance programs steer consumers to higher cost drugs when there's a a lower-cost drg available. only 12% of co-pay assistance programs offer similar source drugs which are typically high-priced specialty medications. the second concern is co-pay system programs operate outside the patient's health insurance and, therefore, the coverage provided by the drug company bypasses the health insurance claim adjudication process. to the health insurer, it looks as if the consumer paid for the drug and as result the consumers

deductible and out-of-pocket or coinsurance are falsely satisfied. to prevent the deductible and coinsurance from being falsely credited, with a drug company rather than where the patients pay for the pharmacy managers have developed the capability to track some drugs that have received coverage through the assistance program to ensure the patient's deductible is not credited if there is no cost to the patient. these are called co-pay accumulated programs and 30% of companies will have co-pay a cumulative programs in place in 2019. when they grow to 50% over the next few years. employers have less consumer co-pay assistance programs when there's only a single source drug available. but still have concerns about the health plan deductible falsely been credited if there was no cost to the patient. so let's shift to health care

costs and plan design. topline medical trend is projected to be 6% next year with an increase of 5% after employers contracting cost management initiatives. this is consistent with the last five years. but consistent doesn't mean good. topline medical trend is still running two times wage increases and three times general inflation. which continues to threaten the affordability for all americans. today cost is expected to be $14,800 in 2019 of which employers with a 70, on average 70% of the cost, leaving $4400 on average for employees to pick up through premium contributions and out-of-pocket expenses. key drivers of health care cost trends are high-cost claims, specialty pharmacy which now makes up about 50% of most employers pharmacy spend even though it only affects about

1.5-2% of insured population to other drivers are specific disease category such as cancer and musculoskeletal, and price increases. the most unexpected data point in the survey this year is that employers are dialing back their moved to consumer directed health plans. since the aca with seeing a steady increase in the number of companies offering consumer directed health plans not just as a choice but also as a full replacement for what they have. in 2018 the number of employers offering consumer directed health plans as the only option will drop by 9% from 39% to 30%, reflecting that employers add back and more choice into the next. lastly, employers are expanding resource to help employees access mental and behavioral health services. we have seen a big jump from 80% to 30% of the number of

companies who will conduct anti-stigma campaigns in 2019 to break down barriers to accessing mental and behavioral health services. more companies will hold training for managers and employees to help recognize behavioral health issues and to steer employees to appropriate services. we are also seeing an increase in the number of companies offering on-site behavioral health counseling, the output is typically offered through an eap. most employers additionally are very concerned about the inappropriate use and abuse of prescription opioids. in addition to the devastation it is having on affected families, employers are seeing higher prescription costs, higher absenteeism and 12% report employee deaths related to opioid abuse. employers are working with her health partners to prove the limited supply of opioids, implement the centers for disease control prescribing guidelines which are very good,

and provide cover for alternative therapies including acupuncture, physical therapy and chiropractic care. so let's close with what employees can expect for next year. this should be a fairly quiet annual enrollment time for employees. premium increases will be about 5% which is consistent with prior years. deductibles or out-of-pocket costs have not materially changed year over year and some employees was the additional plan choices and resources although this may be a quite a moment. this is an opportunity for employees to review the resources that the employer makes available to them to maximize their benefits and health care experience. 84% of employers seed money into health savings accounts and about one-third of employers tied those occupations to program participation. a small percentage of matching contribution so it's important for employees to pay attention

to any -- given the priority employers are placing on virtual care in 2019 in the growth of virtual care solutions, employees should spend time to understand these convenient and efficient alternative pathways to improve health and well-being. 71% of employees are offering employees and their families medical decision-support services to help them understand their treatment options and where to go from care. this is an incredibly valuable resource to help consumers navigate a complex delivery system. we encourage employees to use the annual enrollment. as opportunity to pause and understand what resources are available. thank you and now i will take questions. yes? >> brian, you noted a slowdown in the full replacement this been directed -- [inaudible] to think if congress passes at

present signs to let some of these a chance and expansion plans alike hsas to cover conditions unpredictable basis that would make them more attractive and maybe change that trip? >> absolutely. i think employers are interested in adding more flexibility into these plans. there are certain preventive services that can be covered a bit of it has to apply to the deductible. employers, , anything but consur directed health plans they rebooted plan design back to say pre-managed-care come back to a time before co-pays. there's a lot of rigidity around what you can do and can't do if you have a health savings account. most companies have a health savings account with consumer directed health plan. so building back in flexibility employers would like to start covering more value-based services and provide a high level of -- whether it's around chronic condition management or more preventive services or

centers of excellence, there's a real opportunity to give back in design based on value. and i think somebody proposals are beginning to move in that direction. >> can you expand on that? could you provide more called on why this been like a dialing back, anchorage also, what's been happening with narrow networks? >> sure. so speculation on why we're seeing a dialing back. i think the build to consumer directed health plans over the last decade in part has been driven by the affordable care act and the cadillac tax which was going to go into effect for 22. you had a lot of companies rush to move to high deductible plans, to either minimize impact of cadillac tax or to delay it as far as they can do to late. as the cadillac tax got kicked down the road to 2020 and now the 2022, there's a a view that

may continue to be kicked down the road. i think employers are relaxing their move from the perspective but there are a couple of the reason. i was at a tipping point entrants cost-sharing with employees? although employers to contempt r health savings account on average 500 for an individual, 1004 family, a high deductible plans are a challenge. we also have very low unemployment so as the work for teleplay into this as well? there are a number of factors that may be playing into bringing choice back in, but i don't, don't underestimate the impact of that cadillac tax moving as being one of the factors. your second question on -- [inaudible] >> so we are seeing more companies focus on accountable care organizations and high-performance networks. i would say in select markets they are targeting their largest markets where they have the

greatest opportunity and have leveraged either to go direct as you see was in a big jump in direct contracting, or to work through their health plan. and again i think this is a means to try to improve the coordination of care and the delivery of care in these markets, and to do that rather than chip away at plan design which you are really running out of runway trends what you can do with plain design so there's a a shift from folks a plan design to really focusing more on delivery system efficiency and effectiveness. >> j hancock, kaiser health news. most of your members seem to hate their pbms based on their survey responses. why are they still doing business with? >> i think it's less of a hate that pbm and more of a hate the supply chain model. so i think it's an hard to say that this is a pbm problem or a

manufacture problem speedy they don't care for the rebates. >> think about rebates and the origin of rebates. rebates have been around for decades. if you go back to managed-care days of the '90s before paying co-pays for drugs, rebates or less of an issue because they help lower the overall cost of the plan. so nice as for today where whether you have a high deductible plan or you're in a a ppo, the deductible is probably still pretty high and the consumers bank first dollar coverage. rebates don't really work well in that environment and so i think there are a lot of reasons employers don't like rebates. part of it is it's very conflict approach to try to lower drug costs from their perspective. the difference between gross and net insurance in terms of whaty could pay versus what the net price could be. there's got to be a more

simplified approach to how you manage cost, and actually the rebate structure can also prevent some of the drugs from coming into the market because of the perverse nature of rebates and formula and the like. so there's a lot of complexity in this model that is not just about pbms or just about manufacturers or just about distributors. when price goes up in pharmacy, all the stakeholders benefit and we have to find a different way of getting this model. >> there would seem to be market opportunity for pharma claims process that wouldn't play games and deals strictly with their clients. why doesn't that exist? >> you have some new pbm entrants into the model that a more transparent models, but when you look at pbms today you've got three major players that make up 70-80%, or more, of the marketer it's not the easiest marketer it's an entrants business model.

it's not the easiest mode break into and it is a model that is ripe for some destruction and to think we may be getting to tipping point. you will start some change in the contracting model in the pharmaceutical supply chain. >> thanks. >> yes. >> so i see there was a slight -- i didn't see if there's a slight specific focus on cost control efforts. i guess maybe the top initiativ initiative, looking at that. >> there is a slide in there that has what the key drivers are, the key areas that employers are focused on in terms of cost management. i know it's in different i don't have all of the top of my head. >> overturned figure out some what actions are the likely actions are looking to try to take to save money next year? related to that i was look at the top initiative and implement more virtual care solutions is

something more than half are trying to do. i'm just curious if there's any data on what kind of engagement they are getting from the actual employees and using these things? >> i think many of these are relatively new within the last couple of years but we are saying some examples of some very good engagement and some sustained engagement and others are still waiting to see what we have. one of the challenges employers have is a little bit of point solution for take right now. there is so many of the solutions in the market, they don't necessarily have the bandwidth to contract with them all of you have how do they didn't even if the contract how did integrate it with everything else they have? these emerging engagement platforms, they say that promise to better integrate the solutions to personalize messaging based on data, and put

all of these solutions behind a wall so we can better coordinated and b mobley enabled. a lot of opportunity therapeutic employers are moving in that direction, but we are seeing i would say case by case examples of better engagement with certain types of point solution. we've seen on diabetes management a particular. we have seen on some of the emotional well-being solutions that are getting very good sustained engagement over time. the next question is what are they doing in terms of outcome? a lot of the solutions are relatively new within the last several years but we are tracking that. what of the things we do about health innovations for them is would to line startups with pilots implicitly can see those results and report those results over to the rest of the members.

>> other questions? >> do you know what you think, what employers are thinking in terms of the jpmorgan, amazon disruption or other disruptions? >> let's start with other silicon valley destructions. a lot of these are coming out of that market or they're coming at a boston or of every snap it's not just about the valley. but when we talk about all of these different solutions and physical therapy or emotional health and well-being or lifestyle management or sleep, a lot of them are coming from innovation coming out of the valley. when you think about amazon, jpmorgan and berkshire hathaway coming together, i think if it's just going to be under the purchasing coalition, then i would expect incremental change. but if you begin to get leverage

amazons footprint within the home, the relationship with consumer, the customer obsession as we talked about health care is not as customer focused as it really needs to be, amazons customer, the customer loyalty than, begin to leverage their ability, one of the challenges with health care, employees don't touch the system with enough frequency in order for it to be routine. in order for them to be sophisticated consumers. amazon and other online shopping is routine for many people today. and if you can incorporate health care into their routine and leverages her platform, then you have an opportunity to reach them in a way that nobody has been able to reach them. for me when i look at this coming together, the opportunity is how do you leverage their platform to reach people in a more natural way any more frequently than we reach them

today? yes? >> a question about i guess ac ace and what you guys called your high-performance networks. obviously related but different things, too. so are your employers actually seeing come for instance, a ceos delivering real savings or is it still a question at this point? >> i would say still a bit open right now. i think what they're doing is based on what defined in terms of competencies of a ceos and with her able to do, they are partnering and again, received 35% of companies are pursuing actively pursuing aco and-post that works. it's a market targeted strategy and so i think you are finding that companies are you working directly insert markers that are very important to them and they found a credible partner to work

with in that market but these are still building and a maturity path for some of these tcos and high-performance networks can be multiple years. you need to get to a tipping point of a providers practice in alternative payment in order to really affect change. and as we've met with various providers and health plans and talk about this, the consensus is usually you have to get to a third of the practice to be an alternative payment model and over to effect change in the overall practice. so this is a journey. it's going to take some time. i think employers are partnering with willing providers who they are identifying, and have identified key competencies that these delivery models have about network, around data and data integration or on care coordination and around

financing that in governance, that lead them to believe that they are on the right path to deliver a better outcome. we talked about how as employers are looking for provided consolidation testing cost increases but they can't really weigh in on quality and consumer experience. they can wait in the cost because they see cost and they can measure cost increases, but we don't do a great job of measuring quality and consumer experience in this industry, and that's got to improve. other questions? yes, keep going. >> one other thing was the second-highest new initiative focus for 2019, a a focus on storage on high-cost claims. i just wanted to follow up on that to see if there's anything, any examples you give? also if that might be another reason they are fighting consumer directed health plans

ineffective because people are blasting the deductibles and once they become high-cost claims there's no slowing down. >> i was the regardless if it's a high deductible plan or a regular ppo plan, you have the same, you don't have a financial incentive once you get past your out-of-pocket max. i think high-cost claims are a major driver overall, and spatially pharmacy many respects are become high-cost claims. if you look at some of these million-dollar drugs are emerging, whether it's a combination of the cost of the drug and the administration of the drug. so you are seen this coming together a spatially pharmacy in high-cost claims almost a common category. so i think employers are really concerned about how did you manage those high-cost specialty pharmacy drugs? and that's one of the elements

of in that mix of high-cost claims but cancer is another category that has -- again, related to drugs but also in general as a high-cost claim category that the growth centers of excellence is one way employers are kind get at some of these. really again tried to steer people to the best places to go for a cure. that's one of the better ways they can get at high-cost claims. all right, other questions? going once, going twice. all right, thank you all very much. [inaudible conversations]

>> a house, suddenly her testimony recently on infamous mental health programs under the 21st century choose act. members are testimony from the assistant secretary of health and human services for substance abuse and mental health. many of the questions focus on immigrant parents separated from children at the u.s. southern border. subcommittee will come to order. the chair recognizes himself five minutes for an opening statement. so today we convene and hold an oversight hearing on the mental health division of the 21st century cures act which was signed into law on december december 2016. on the anniversary of the house passed away for century cures, this subcommittee held a hearing on the sections of the law that the national institutes of health and the fda are