the most common change on the private side over the last five years has been moving to far more shifting to an individual, high deductible, hsa, hra, et cetera. this particular company did all of that. it produced a, when one does the analysis, and allows the analysis to have all of the new entrants flow in, which based on looking at the literature is the way most of the analysis by insurers and others has been doing it, then you see a, not only an initial decrease in cost, but what appears to be a decrease in the rate of cost growth. in this particular case, the second you fake out and do the analysis on a closed group basis, so all you're doing is following the individuals that were with the employer in the

plan prior to the change and then carry them through the first five years, you get a one-time shift down. similar to the old managed care shift. and then the cost rate actually is slightly higher than it is for the end quotes full population. so, we haven't been able to find other studies that have been making that closed group analysis process in it. so, there may be the appearance of good news out there that isn't quite as good, basically, what is happening. the second point i'd make, which goes a bit to what ken was talking about, and others on the chronic issue, and i'll flip to an article that a fairly thorough piece that was in health affairs with a much

lengthier piece that then followed it in "the washington post," on lyme disease. and if you take the state of virginia, where when the current governor came in, he, for the first time, appointed a governor's task force, the governor's task force came up with recommendations. the governor said we shall enforce the recommendations. the state saturday department began an immediate process of sending out mailings, and creating educational requirements for all those licensed to practice in any way within the health system in the state of virginia and the rate of test positive reported cases of lyme in the state of virginia has skyrocketed. as it is also at cdc the highest rate of reported growth across 48 states at the moment.

as it is becoming through health affairs, popular media, gubernatorial task forces. that is a disease that the infectious disease society treats as an acute disease. it can be easily cured, they say. and for those that think they have a chronic disease, who are in a wheelchair after treatment, who still can't chew after treatment, et cetera, these are all deemed to be non-lyme related and nontreatable. those that are told they have mls, chronic fatigue syndrome, et cetera. so this goes to the dual eligibles, the medicaid, the medicare, one of the fastest rates of increase in granting a social security disability, and with it medicaid coverage, is, in fact, lyme disease individuals who, according to

the infectious disease people don't have lyme disease. but relative to the chronic conditions, do. so it's just to underline a number of the comments both on the treatment issues. on the analysis and diagnosis issues, and to the technology issue of testing, the fact that lyme testing, as the article in health affairs pointed out, and elsewhere has been pointed out, has been extraordinarily ineffective, very high rate of false negatives test. and there's a tremendous need for advance in that area. but even with a lousy test it is suddenly producing new costs that will push the cost growth curve as we move in this area. so the employer's side, joe, i agree with you. there has not been a tremendous

movement. if one looks at the magnitude of that system towards a significant change. those that are making the shift to high deductible, and in essence thinking they found nirvana, when you cut the data, just looking at a constant population, nirvana still is a long ways off. but to the point raised by others, a one-time decrease of 17% before it starts going up again is not necessarily a bad thing. but then i'll add the final caveat. hsas is established under federal law the data is not owned by the employer. and, in fact, in most cases, only one of the insurance carriers is structuring their products so that they can actually can do an analysis that includes what is being spent out of the health savings account.

and even with them, because the law allows the employee to move the hsa provider bank and then there's no reporting back is the vast majority of research to date excludes from analysis what is being spent out of health savings accounts, and treats that spending as not occurring. so, the data on that whole area is exceedingly dirty. >> comments anybody? okay, let's see michael barr is next. >> thanks susan, i'm going to go in a slightly different direction. it's been ee freshing that we've been in a meeting about 2 1/2 hours on the role of technology and chronic conditions and nobody has mentioned the phrase meaningful use, which is nice, but i'm about to change this. i have a question for the panel, and full disclosure i'm on the

health i.t. policy committee and their four subgroups now working on different ideas through stage three. but i'm curious, from the panelists, whether they think stage one of the proposed objectives and measures for a stage two are moving in the right direction in terms of helping us to improve chronic conditions and managed costs. and whether you think so or not, what would you recommend for stage three? >> total interopperability. until you get that, you can throw out meaningful use and this, that and the other thing and say that but until you have the different hr -- or ehrs speaking to each other, and the data being transmitted from the specialist to the primary care with two different systems, you can measure all you want but it's not going to help us. it's still going to be inefficient for the practitioner. >> bruce?

i guess the comment i would make is so where is functional asse assessment in all of this. again as a practicing physician i get the value of all the little data points we love to collect. but when you look at the population that both diane and i show data about and if you reflect through on melanie's broader khejts about her kind of current folk use in the preduals, until we understand the role of function, and both physical imparamount and cognitive impairment, you can write prescriptions and stuff and you can do tests and stuff till the cows come home, but if you can't understand whether you can, you know, sort of thread that data set through the life of a fully built human being, that's a real problem. and i see that as being totally missing. >> brad? >> in the spirit of specific recommendations to reduce cost, and connecting the dots, i want to follow up on something bruce has been saying.

and that is the importance of functional impairment. it's not just because, you know, people when they can't function, utilize, it's that multiple chronic conditions, plus functional impairment, those just happen to be two of the most powerful predictors we have for mortality. the bottom line really is, if you look at the population that has more than three chronic illness diagnoses and functional impairment you're looking at people who are getting near the end of life. where spending is very high. we all know that in medicare 28% of all medicare dollars go to patients in the last year of life. 30% of that 28% is in the last month of patient's lives. and 80% of that is in the hospital. i thought the articles that were supplied today are really interesting. the news one, who are the chronically costly health care is 1%.

this is the population that we're talking about. as ken mentioned death panel rhetoric has kind of paralyzed the debate on what to do about these folks. but i just want to suggest that the managed care approach of targeting costs, and thereby reducingite liezation, there's a word for that, and it's rationing. and it's caused managed care to be torpedoed across the country and we saw what happened in one of the graphs we saw today. i would submit to you that targeting costs in order to reduce utilization in this high-cost vulnerable population is exactly a 180 opposite of the way we ought to be going. what we should be doing is looking at the word cloud, hospice. those of us that have done hospice for years know that you can be a day away from death and be very comfortable, very

functional, believe it or not very happy, at home, all the words in the word cloud are fulfilled, and we can target those kinds of personal preferences in order to drive reducedite liezation because a lot of these folks do not want to go back to the hospital. if you start with personal preference and then reduce costs, that's the right direction. and nobody's going to argue with that. except for those who just think personal choice is gist a bad word. but out in the real word, what people want should be driving what they -- what kind of care they get. and we don't have mechanisms to make that happen except in the few places where we've trained teams to be in the home and community to move the focus of care out of the hospital for this population, to where it needs to be, where the word cloud is fulfilled. i just want to put in a plug really -- and by the way, i'm a

pal at-ive care doc times 20 years and i do not think palliative care by itself is the answer. because it's viewed by most physicians as an alternative to treatment. so it's either we treat, and when we're done treating we turn over to palliative care or hospi hospice. that doesn't work. i can attest to that. you know, with decades of frustration. what does work is to train teams to see what people want and do both treatment and comfort care in a package. we can do that. and we are i want to put in a including for ctac coalition to reform advanced care. which is putting into process and measuring results on exactly what we're talking about. and i think next meeting it would be great to go into this in more depth because i do think it's a way forward. >> i've been talking to students about shared decision making, or

some other name for it a long time, and i would write down on a black board a utility function and then everything flowed. and i just went with my wife to see a lawyer about redoing our wills. and so i got to thinking about what one would say in advanced directives. it's very hard. i mean we know from all sorts of studies that people are bad at complex decisions, which this is. they're bad in emotional context, which this is. i'd like to think i'm pretty good at that. but just trying to say, either orally or in writing to my wife or my children what i would want, there's such a vast range of circumstances looking forward that you know the simple kind of example we give people about the doctor says well you have a "x"% chance of survival, and you

know, and by the way here's what will happen, what kind of pain and suffering you'll go through, it isn't like that and probably most doctors aren't very good at giving those probabilities anyway. so i, while i'm kind of all for bringing in the patient, i'd have to turn in my card as an economist if i wasn't. i think it's just actually very, very hard to do this in practice. and then pretend that we're -- we've made a big advance. now that's not saying in some cases we clearly could do this. no doubt about that. but as one starts to push this and get close to it, i think it's hard. i'd be interested in what brad had to say about it. >> if i could respond, you know i have to say, joe, i agree completely with what you just said. as a doc in the hospital, and in the office, and the icu or talking with attorneys a one-shot conversation on advanced care planning yields

very little. i think if there's a secret to this, it's that as people get more and more ill within this period, where none of us, if you're sitting at the table, you're not this sick, okay. the people we're talking about couldn't be here. they can't even make it to their doctor's office or church. i mean they're very ill. once you get that sick and move through your illness, if you have a trained team there helping you understand what the illness is about and helping you understa understand what your real options are, one of which is 911 when you lose your breath at 4:00 in the morning, there's others, as well, the interesting thing about the word cloud is that the people who are the most ill have the capacity to live just like the words in the cloud, but we teach them to come back to the hospital. we don't teach them to manage themselves, to see what their options are, and we don't put

health for them in their homes. and i think that's why i think what you're saying leads us to the place where we have to do better care coordination in the community, and we have models and data showing that that works. because you can't do advance peer planning when you're well. it is too complicated and you're not down the decision tree far enough to know what's going to happen. once you're that sick, you do know what's happening. and you've adapted, and that's when decisions, over time, with trained teams, make a difference. >> ken? >> i know i've mentioned this in my talk, but i guess just wanted to reiterate that i think we could do three simple things. they're not going to solve the problem. but, they are going to contribute to -- to the solution set. and they'd be inexpensive. so we're not looking at something that's a big, big set of expenditures.

one is on this prevention side. as i talked about, you look at a prediabetic overweight adult at age 50, they have an 87% chance of having diabetes during their life. if you enroll them in this diabetes prevention program i just talked about, lifetime likelihood of getting diabetes is 62%. so, that's a program that we should just roll out nationally. and then, leverage medicare to refer patients into it. that's a program we could do for $80 million. that's less than 10% of the prevention in public health fund next year. so i would do that. i'd make it a covered benefit in medicare. doesn't have to be the dpp but something like that. second, is that we have got to build on this base care coordination and to traditional fee for service medicare. it makes no sense that that's really the only payer that doesn't have any type of care coordination, and as we've heard, they own the chronically ill population. i mean that's who they are.

and so, we do know from a whole host of data, in the private sector, from randomized trials, functions that improve clinical outcomes and reduce costs. and i went through some of those like transitional care, health coaching. medication therapy management and so on. and they're evidence-based models across the board on those that we should just integrate into fee for service medicare. and the third thing that we could do is pay attention in the definition of the central health benefits for plans offering services in the exchanges about what do we mean by prevention and care coordination. we spent a lot of time on the other elements, defining what in-patient care is and so on. we're spending no time really thinking through what do we expect plans to do in terms of preventive services, and i'm not talking about clinical preventive services, i'm really talking about disease aversion. and care coordination for plans

and unique changes. i think that's a really important discussion to have with states. with health plans, because there's going to be incredible amount of transition of patients from medicaid to private health plans within the exchanges. and i just think that that's something that at the state level we need to get on. that obviously in terms of cost, minimal. if any. but those are three things that we could do, right now, i think, that would make a real important contribution to reducing hopefully both the leveling trends. >> ken i just want to follow up on your point about prevention and the diabetes preskrengs program. because as you know, a large share of the long-term analyses of that program showed that, notwithstanding the fact that many people do lose that 5% to 7% of body weight, a very large share of them actually gain it back. now there still is a benefit, as you said, in terms of the delaying -- at least delaying progression from pre-diabetes to diabetes. or, causing it are now

quite aware from a field of behavioral economics, and do we understand, really, enough about human beer haver to know they're going to have a lasting effect? >> women we know the two long-term effects somebody getting diabetes at age 50. we're paralyzed without having years of randomized trials. gosh, it's a good thing the private sector doesn't work that way, but medicare does. there is a ten-year follow-up. we know in the ten-year follow-up, that, yes, there was have weight regain after year three or four, but that that just means we should focus on quickly doing year three and four to reinforce it.

the first point. the second point i'd say, so what? we still have a 34% cumulative reduction in incidence of diabetes. doing nothing, we still have 34% less. >> all right. so -- one of the elements on the table, adoptive diabetes, you said $80 million a year? >> talking about -- this -- it's $80. . i could ask for more. sounds more attractive and costs more, i guess, but, $80 million, yes. >> like to go back to dr. stewart's comments about end of life issues. i think one of the things in teaching residents that we forget to do is, we're teaching them the technology so they can start using technology, and what we don't teach them is just

because we can do something, should we do something? that thought process. it's far easier to provide something in a setting and the light with something like that without thinking than not doing it. one, you feel better because you're trying, even if it's a hopeless case. so i think this also gets to the point we mentioned a little bit about patient-centered medical homes and some of us talked at break about that, is, we need to look at understanding the use of the technology by the primary care doc and by the specialist and make sure there's a coordination in the use of that technology. both in the setting of the first workup of the disease and also in the setting at the end of life. a lot of technologies used that really is not going to aid or help the patient in the diagnosis, the treatment or even in the comfort, like you presented. so i think we haven't looked at

or discussed is actually getting back into the teaching realm of the medical schools and residencies and in understanding, getting them to understand the technology. >> get them to work at teams. i mean, as i look at any academic medical center a school of public health, medical school, nursing school, school of pharmacy, school of social work, they'll all see the same patient at some point during the course of that patient's treatment. but there isn't a structure that really gets them to work together to think about, how do we work collectively as a team to keep that patient either from getting a disease or healthy? >> i would add, there was an editorial i think in the "new york times" a couple months ago that internal medicine has to get more pediatrics. my training is pediatric cardiology. believe me, we had a social worker, pharmacologist, he knew how to pull up the, if giving drugs, how to do that.

they didn't leave the hospital until parents could give the medicine, give them appropriately, even if it cost the hospital an extra dayened wasn't reimbursed, the patient didn't go home until the appointment was made. >> maybe to dwell on that a little buiit. i think about my health training in medical school. it actually had a framework. levels of prevention. primary prevention and somehow most of the discussions i'm incontroversialed in these days seem to focus on prevention in a very primary kind of way, all about preventing, people from getting it. you know, care coordination saul about the other two kinds of preechgss for people who are sick and possibly treatable and for people who are sick and treatable but not curable. and so i think we need to get back to this notion that a really good care coordination plan is actually a form of prevention. it is a public health responsibility. and it's missing -- sorry to sound energized but it's really

missing from these discussions. at the end of the day i go back to the question what is the problem we're trying to solve here? at the end of the day, we have developed a tradition in late 20th century american medicine of introducing a pill or piece of equipment in place of a good discussion. and particular will any a situation when the outcome is functionally driven not medically driven. you're not going to fix the fact this person has a stroke and is a paraplegic. you have to focus on quality of life. it's an issue at every level of the medical system. understanding the person's medical and personal goals are, continually substitute expensive potentially very risky therapies in place of a thoughtful and evolving plan where you are seriously ill or have substantial functional limitations it's not a fixed point in time discussion. it's like a mosaic evolves.

you have to be able to pull out the tiles when the image changes. a discussion about how to use t technology and a notion of a careful plan over and over again. the fee for service medicare is wet get want year a care coordination code and a follow-up and. won't work. it just won't. an intensity in this intervention that's important and goes back to the fundamentals. i think. okay. i'm off the soap box. >> could i add to that very quickly. in the interests of actionable steps, there's been a lot of talk about what's effective care, how do we change medical culture? how do we teach residents? our experience, i think, in a big 24-hospital system is the way to change medical culture is to change the structure of medicare being provided. i have to sap as a doctor that i

don't think doctors are the answer. you know. there aren't enough of us to go around. the great wave that about to inundate us, the teamwork we need are teams are other professionals that can work with us to extend our care to people who need it. the kind of people bruce is talking about, and i think there be models out there that provide that kind of care coordination. we have data that shows that it works. that simple change in the structure of how care is provided, in the system in that way would really equip us to do a lot of the things we're talking about today an change medical in the process. doctors want to care for the people who can't make it into their offices anyway. they're too ill. >> more cards up. david, and work our way around. >> follow-up to the last couple of comments. question for anybody, issue of

care coordination, team delivered care, it doesn't -- i think the common wisdom is this is really an important way to get at this high-cost population, but at the same time it doesn't seem to be as simple as adding on a paid benefit. seems to require a structural change and a cultural change for a lot of caregivers. i wonder how we go about doing that in a program like medicare or medicaid for that matter? >> you're right, and it's not a coding change. i sort of think about it the way that north carolina, vermont thought about this. in terms of building health teams that work with primary care practices. and the way i think you could do it in the medicare program, and i would do it in conjunction, too, with the changes, is basically that you would have to contract out, lie vermont, with different entities and planned service areas to have teams available to work with medicare

patients. i would start off with them being voluntary. the primary care practices don't have to use them. but our experience in looking at them in vermont is that they all do. because i think that bruce, brad's point is that they are a natural extension of thes office. they engage and work with the patients. they help them make sure they understand the care blan. the care plan is executed. they have questions about the care plan. they know where to go. they're nurses, nurse practitioner, pharmacists. they're doing all the blocking and tackling and execution of the plans and not physician. they're nurse led. so you could easily have medicare build these teams and have them available for others to use. if medicaid in the state wanted to do it, that would be fine. a lot of states are doing this. and there's a section 2703 in the affordable care act that gives states an enhanced 90% match to put these teams into place for two years.