other americans get free from tobacco. we can now i think take a few questions. >> from abc news. i wanted to ask you about the states. you've taken a major step forward on federal level. the states may not be. we've done some looking at the figures and the $25 billion they're getting from the tobacco settlement and tobacco taxes only 2% is going to anti-smoking. is that enough? should the states be doing more? >> the centers for disease control and prevention publishes guidelines for what states should spend on tobacco control in order to reduce the use of tobacco. no state reaches the recommended level of funding and some of them are at single digit in terms of the proportion of the funds that they dedicate to tobacco control. there are some people who have said, well, the reason smoking isn't going down so much is

we've reached some kind of irreducible minimum. that's wrong. the states that have continued to invest in tobacco control have seen a steady decline. california, for example, is down to about a 12% tobacco use rate and some communities in california are down to single digits. so more progress is possible. a national campaign does not replace state and local efforts, it supplement it is. one of the things that we do at cdc is to host a media resource center for anti-tobacco ads. these ads and others are there so that state and local jurisdictions can choose with their own resources to extend that and run them more. we also have to give thanks to some of the stations that will be running these ads free in addition to the paid ads we'd expect to get at least one to every $3 we spend in donated ads. i'm joined by tim mcafee from

the did we answer all of the questions? were we that clear? >> would you mind answering mine a little more? should the states be doing more? >> we understand that the states are in considerable -- under considerable pressure physically. at the same time we know tobacco control is a good buy. fewer people dying and lower costs should be seriously considering increasing their investment in tobacco control. >> i would just add that the purpose of the surgeon general's report is to give good science and evidence and facts out so policy makers, communities, individuals can make good decisions and they can make good policy decisions and our hope is that the states would try to reach good decisions and we also

encourage them to look at the cdc levels of funding. but it's left up to the states and our role is to give them that information so that they can make those good decisions. >> thank you. next question. >> are you going to be able to run some of these ads in spanish and in spanish television stations and radio? >> thank you. >> yes. one of the ads is in spanish and we -- as we do further ads, we will continue to work on providing these for different communities within the u.s. one of the ad that we didn't show was on second-hand smoke and that was in both english and spanish. we have the person who tapped that ad here with us showing basically that any time people smoke around someone with asthma, they're much more likely to have an asthmatic attack and end up in the emergency department or even hospitalized. asthma is more common in hispanic communities. that's the ad that we targeted

to that community. >> what kind of -- have you thought about how we in the public health community can help? because obviously they're very important to do and it's possible the tobacco industry will react in ways similar to the way they reacted to the labelling of cigarettes. >> we'll see what the tobacco industry does. our focus is bringing the reality to the lives of americans who smoke in order to save lives. i think we can expect that some people will say why are you spending money on something like this when we have such severe fiscal pressures? yet again, tobacco control is a best buy. the amount we're spending is less than two days of the advertising budget of the tobacco industry for our whole year and yet we think it will have a major impact.

and where ads like this have been run, we've seen a steady decrease in smoking. so not only do we think they pay for themselves in economically but more importantly and most importantly they save lives. that ultimately is the answer. >> doctor, since so much smoking initiation occurs in the military, will these ads be made forces to armed services network? >> it's a great question. i will follow up on the suggestion. >> i would just add certainly as was mentioned, all of these ads are being placed in the cdc's media resource center. from that perspective they will most assuredly be made available. and we would love the tai opportunity to make sure these are seen both by people in the armed services, as well as our veteran. >> i will comment that as part of the affordable care act, there is a national prevention

strategy for the first time. 17 u.s. agencies have joined together to focus on prevention, including tobacco control and there's been a real embrace of that within the armed forces, which is focused on fitness, whether it's smoke-free environments or ensuring healthy foods for our forces. so it's a good partnership and we'll follow up. other questions? all right. well, i want to thank everyone. and let's have another round of applause for the people who came forward. [ applause ] in the past there's been interesting of the media in interviewing some of the people and we'll make that available. we also will be working with some of the local media outlets from the areas where the people who came forward live to

encourage additional coverage. we know that every bit of coverage about tobacco use that shows that tobacco kills saves lives. so thank you all very much. [ applause ] then american petroleum institute president and ceo jack gerard discusses the cost of

gas, alternative energy efforts and the keystone oil pipeline. and hubert haimer of the agriculture department and jerry hag strom, founder and, tiff editor of the hag strom report look at how farming and agriculture have changed over the last few decades. "washington journal" live at 7 a.m. eastern on c-span. >> congratulations to all this year's winners of c-span's video cam student documentary competition. a record number of students entered a video on the theme "the constitution and you." watch all the videos on our web sites, studentcam.org. >> coming up here on c-span3, senator tom coburn of oklahoma speaks on a forum about the

future of medicare. that's o followed by national security advisers discussing how u.s. policy in the middle east has changed. coming up at 10:00 a.m. eastern, a forum on religious from georgetown university's berkeley center for religion, peace and world affairs. scholars will discuss the arab spring, religious extremism and the baum administration's policy for dealing with religious issues. you can see it live starting at 10:15 a.m. eastern here on c-span3. oklahoma republican senator tom coburn says medicare is fiscally unsustainable and tough changes must be made to preserve it future generations. he talks about the senior choice act that he co-sponsored. this is about an hour. good morning and welcome po

the betsy and walter stern conference center here at hudson institute. i'm ken weinstein, president and ceo of hudson. i'd also like to welcome our live viewing audience at home on c-span and thank our friends at c-span for covering today's event. hudson institute was founded 51 years ago as a forward looking policy research organization designed to think creatively about how to achieve a better future in the face of the then unprecedented challenges of the early 1960s. key to our research then as today is a unique approach, a unique focus to solve problems deemed unsolvable by the purported experts. we have done this calling insight through integrated research that draws on economics and the power of markets, human ingenuity, science, technology

and innovation, all this against a back drop of shifting dem graphy and geostrategy. central has been our work on health policy and a belief we've seen over the last 50 years that technology and human choice are central to lengthening life spans and reach duducing the co medical care. tevi troy will mod ray the question and answer segment shortly. now as to our speaker, i can speak of no better speaker in the u.s. senate to examine how to solve the looming crisis of medicare, which poses such a broad fiscal threat to our country than senator tom coburn of oklahoma. the senator is a rare bird here in washington. he is wide live known for speaking his mind, for his genuine independence, for standing up to both the left and the right on critical issues and of course for his fierce

opposition to waste in federal spending and a profound concern about long-perm term budget liekts, a concern we share he at hudson institute. the senator was known for leading the fight against ear marks and is backing a bill this summer which called for an unprecedented $9 trillion in spending cuts. dr. coburn is a physician by training and practice up until this year, a businessman by background. he was elected to the senate in 2004 after three terms in the house of representatives. he currently serves with distinction as a member of the senate committees on the judiciary where he's the only nonlawyer, on homeland security and government affairs and on finance. and in response to the current medicare crisis, the senator has introduced the seniors choice act, which aims to reduce costs through a variety of means, including competitive bidding for benefits and increasing cost sharing by wealthy americans. the senator will speak briefly. he has then graciously agreed to

take questions after his remarks and you can follow us on twitter and tweet live at hudson institute using the hash tag seniors choice. he's agreed to take questions from the audience here and at home. without furst adieu, i introduce senator tom coburn and turn the podium over to him. [ applause ] >> well, good morning. we probably don't have anything in front of our nation that is more critical both for our national security but also for our future, even if it had no national security implication than our budget. nobody denies the fact that the greatest onderal obligations th health care. ronald reagan long before he was president identified a time for choosing. and, quite frankly, that's where we are again today in our nation.

the choices between trusting americans versus trusting an elite group in washington to make decisions for us. and with my independence cops my desi -- comes my desire to make choices for me, make decisions for me. i often travel through oklahoma. yesterday i turned 64 years of age so i understand the aging process and i understand the insecurity that comes with aging as your health has bumps in the road and you fail. and i understand how important health care is to seniors. but i also understand one other aspect of seniors' lives that's just as important and that's their progeny, their grandchildren. and we are now faced as a nation with making critical choices

over a very short period of time. some have said it's not a short period of time. but i would say we have to make the choices in the next two to three years if our children and grandchildren are to survive as we know it. how do we strengthen medicare, how do we provide quality health care for seniors that our grandchildren can afford? if you look at the numbers today, the average couple puts in less than $130,000 in their life time in medicare taxes. and on average they take out $350,000. if you combine that with the demographic shifts that are happening in terms of my age group, the baby boomers, and what we're seeing coming into medicare, you can readily see that's an impossibility. and you hear the calls that we can't change medicare.

and the fact is we will change medicare. we will change medicare significantly, but that does not mean that we will change quality health care for seniors. and the reasons that we'll change medicare is because the world's financial community won't loan us the money to pay for it the way it is today. it is a fiscal impossibility for us to be able to borrow at the level that will be required to sustain medicare as it is today. so we have a choice in front of us. and we can follow what has been put forward in what i choose to call obamacare where we have a top-down, elite bureaucracy that ultimately rations medicare, or we can use what we've used in every other aspect of our society save education and health care, and that's the good choices of market forces allocating scarce resources to

drive efficiency and quality. tackling medicare in an election year is what is known as taboo in washington. i think that's exactly the time to tackle it, to build a consensus of what the real facts are about medicare. the fact that it is absolutely unsustainable, that close to 15% of everything that we spend on medicare is fraud or mispayments and we've not addressed that. that would buy medicare five or seven, ten years of life just to address the fraud. we can't even get a fast act which has 37 bipartisan co-sponsors on the senate on the floor of the senate that will actually address it. what are our options? our options are to choose between market forces and

washington elites. and just by example, can we -- can we trust consumer choice to allocate a scarce resource? can we be involved? that doesn't mean that a 95-year-old seen i'll individual has to make those choice but it does mean that somebody can help them make those choices. can we allocate through consumer choice more consistent, more economical, more efficiency utilization of the services that our children are going to provide for health care for us. i would tell you that trusting elites in washington is exactly how we're going to end up with the independent payment advisory board. and nobody should -- should -- should defend other than the fact that this is nothing but a

pure rationing board. the whole goal is to look at a cap and say how do we reduce payments within that cap to be able to control the costs of medicare. that's why it has a cap on it. peter orzack, who actually identified and planned the independent payment advisory board had this to say -- we need to jettison the civic 101 fairy tale about representative democracy and instead begin to build a net new set of rules and institutions. the problem with such commissions is that they reduce the power of elected officials and therefore make our government somewhat less accountable. i want you to hear that statement. we don't need democracy to decide how to handle health care. we need elites in washington to decide how to handle health care. i would put forward to you that that's the destruction of freedom in our country.

and when we have the elite position that we know better grn the world has achieved more efficiency of greater standard of living and has done it through market forces and we need to abandon representative democracy as we do that is the height of the choice that reagan identified. what are we proposing? senator burr and i introduced in the senior's choice act is an idea to create competition through premium support. if you're on medicare, you like it the way it is, you can stay there. the only problem is, traditional medicare's going to have to compete with the market. so we allow you through premium support to buy whatever you want to buy. and we both age and health adjust that and income adjust that.

so that you have the ability to make decisions about your health care, your financial situations with the aide of a system that will get you better care with with less dollars. and the assumption behind this. this is a recognizable fact. it's been confirmed by four separate independent studies. one out of three dollars that we spend in health care today helps no one. it doesn't prevent disease, and it doesn't help cure disease. if, in fact, america would solve that problem, that one out of three dollars, then our health care burden would be much less, and our health outcomes would be much better. how do we do that? and we do that through the forces of competition and consumer choice. beginning in 2016, we require

medicare to compete directly with private plans. we modelled this somewhat after medicare part d. we allow each senior to get a fixed government stipend which is actual airily equivalent to what they would be receiving today. but we set up a competitive model within the private insurance plans. controlled by a consumer protection board to make sure those plans are not cherry picking. make sure they're what they're supposed to be, and then we make medicare compete with that. so what we do is, we put the forces of competitiveness back into the system which we do not have today. ask yourself for a minute why we have an acute shortage of primary care doctors today in this country? because have you a price fixing

bureaucracy that has undervalued the value of primary care, internists, family practice, et cetera. and they've underpaid it, why do you have one in 50 doctors who graduate from medical school in this country, only 1 in 50 go into primary care. because for the investment that they've seen, they're responding to market forces, if we want more primary care doctors, what has to happen? you have to create a market incentive for them to go there. and the option against that is, the government will tell you what kind of physician you'll be. the elite position is,we'll mandate only so many positions in all these other areas so we force people into primary care. the whole goal behind the senior's choice act is to set up both through increased

recognition of our aging. so we would start in 2016 by slowly advancing the age of eligibility for medicare. we would start by 2016 a premium support competitive model, which is adjusted both for income and -- on both ends of it. if you're on the low end of income, you get an actual boot up in your premium support. of the 60,000 people who have adjusted gross income in this country who are collecting medicare today, you would get less help. in other words you pay the full cost on medicare part b. we also would have an impact and direct in terms of supplemental policies. most people don't realize that people on medicare today who buy a supplemental policy consume 23% more medicare dollars with

exactly the same health outcomes. so we combine the a and b deductible together. and we create a new ma'am mum exposure for seniors, all seniors, we create a ma'am mum exposure so you know you'll have -- here's the limit of which you will never spend any of your additional dollars on. we limit low deductable medicare supplemental policies, so we can do one thing that's most important in health care, i want to give one final comment on that as an example. when you have skin in the game, i don't care what it is, whether it's health care, buying a car, buying groceries, whatever it is, if there's a connection with an extraction from your pocketbook, you're a better consumer. when it's not, when there is no

connection, we see what we're seeing in health care today. there's no differential increase in cost for over consumption. and we do know through lots of studies that we have overutilization in large areas in medicare. and the reason that we have over utilization in large areas doesn't have that much to do with patients as it does providers. we would put that in, and the example i use. i've had the good fortune to take care of a ton of amish families. they don't have health insurance. they're the best purchasers of health care i know anywhere in the world. they want to know what something costs before they buy it. they want to know why i have to have it. and if i have to have it, where can i buy it most cheaply? they negotiate deals on pricing,

if i pay you in advance, do i get a discount? in other words, they're the ultimate consumer in terms health care. and the reason they are is because it's fully connected to their pocket. and what we need is a model to where we have a connection. not an absolute -- but a connection of price and payment to be reinstituted. that's what we've tried to do through the senior's choice act. i get letters all the time from seniors about their health care and the waste associated with medicare. i mean, hundreds of letters every month about what they're seeing. and, of course, there is no connection to their pocket because medicare's paying it. they don't have a connection. and yet they know medicare's in trouble. the final point i'd make is why we have to change medicare is,

if you go back to the macro economics that are facing our country and the fact that we're going to add another $6 trillion to our debt. and that medicare has increased its unfunded liblg eed liabilit trillion. that's what the increase was in terms of increased funding liabilities, we have to fix medicare. and it's not a choice about the status quo, which is what the typical politician says, we're going to protect medicare. what we ought do be say stg, we're going to make sure you have quality health care. but the system we have today isn't working. it's heim highly inefficient and will bankrupt your children. the choice isn't of medicare as it is today and nobody's going to touch it. the choice is, how do we with

fix it so our children can afford it. how do we make it better? how do we get more security for that aging american, so that they know that they're not going to be bankrupted. that their lifestyle is not going to be markedly changed through any changes we would make in medicare. we can absolutely assure american seniors that we can do it better, we can do it more efficiently and they can have the security that they have today. but knowing that that security does not come by a loss standard of living by their children and grandchildren. with that, i'd be happy to take any questions and go into details on the bill. and visit with you on it.