retirement accounts an ira or 401(k). near retirees look at what they have, and most middle class people, this is stunning are downwardly mobile and be poor or near poor. that's about $17 per day. the only way i can get my students and journalists and myself to understand what that means. so this is the first time that a generation since social security was started, they're going to do worse than their parents and grandparents in terms of income security. at the same time, many of them not all, that's the whole idea but many of them live longer, 15% have a chance to make it past 90. so bad things happen when you get old. you're just at risk of bad things happening when you get old. so we are looking at what that might mean for state and local budgets because they're the first entities online to provide food and housing.

we are looking at what this might mean for aggregate demand in a community when incomes of the biggest growing group falls. so and what it might mean for quality of communities. so i am seeing that most people really do care about doing meaningful activities when they retire. all of our friends have the choice to change jobs and change activities so they can control the pace and content of their day. but either you're looking for one of the bad jobs in america, with the world's leader in the creation of jobs that pay under $20,000 per year, they're looking for that or they're looking for kinship networks to get income and welfare, and kinship networks don't work as it turns out, low income seniors often don't have the adult children that have an extra

bedroom or anything more in their savings account. so people that have children that can help them out are usually people that are better off. so we are in a crisis chip. we don't have the social structure, we don't have long-term care insurance we don't have caring labor intact, and people are committing to retire lost more money than their parents and grandparents. >> when you use the word crisis as you use it, i don't disagree. the crisis is more to institutions than the people. i do think we will see the institution will change, but let's start with an institution that's been around for about 30 years, the 401(k) plan. if you look at what really happened in the past 40 years, 1980, when they started, you had

the boomers grew up in a period of time where we were slowly moving to a system where they were funding all of the risks all of the things we are talking about are risks that present in old age around retirement issues right, when you're not working. let's be specific. what do we mean by retirement. means you're not able to sell your human capital in the marketplace any more that's what retirement means either because you choose not to because you can afford not to or you can't. and that's what you're alluding to. and so the boomers i think my impression of what happened was we kind of over time over the 30 years offered the 401(k) system or made changes to make the 401(k) system the third leg of the retirement. you had personal savings social security, and 401(k). replacing the more traditional style pensions. that caught boomers by surprise.

i think a lot of them thought -- i think it was like a little nice benefit at work. i didn't know this was going to be what i live off of in retirement. and that came too late. so talking about why you can be optimistic about institutional reform, if you are a 25-year-old entering the work force due to legislation passed in 2006 you're automatically enrolled in a 401(k) plan. you are automatically put in a fund in a lot of cases automatically put in a fund that's going to take a fair amount of investment risk when you're young move down over time so it is more conservative when you're older. hopefully you'll earn real money, rather than keeping up with inflation or even worse falling behind. your employer has the option of actually increasing your contribution rate over time. my point in bringing this up is

we have seen institutional reform, an important part of the marketplace. if you're a 25-year-old and in a well designed plan, not saying all of them are well designed but if you're in a well designed plan, you have a good chance of having that leg of the stool being there when you're ready to retire. now, things we need to work on. doesn't cover people that don't have a job obviously. doesn't cover people who have part-time jobs in a lot of cases. so there's still room for more reform and improvement in the overall system but we have seen instances where there is that institutional reform. the last thing i'll say beforehanding the mike back, last thing i'll say, again coming back to the point everything that we are talking about, we are focusing on the boomers, people in retirement. it is putting incredible stress on the entire system andpeople in

retirement. it is putting incredible stress on the entire system and millenials, too. it is across the whole demographic. if we don't think of it in that way, we are going to make mistakes in how we reform the institutions, and the biggest mistake we could make is you know, asking the millenials to take on too much of the responsibility of what the institutional reforms, who we are asking to pay for institutional reforms. what we don't want to have is develop intergenerational resentment and sense of unfairness there that will lead to bad things. it is not just a boomer problem, it is a societal problem. >> and millenials are under their own pressure with student loans, working for companies that don't offer 401(k)s or don't make enough to contribute. >> a lot of starter jobs are filled by boomers. >> i can find one other thing i

would say as we rethink the system you suggested that we have to rethink solutions i am worried that the defined contribution that the new system of employer provided pensions that's not just an issue where baby boomers got caught off guard. the reason i say this, i have been doing research with a colleague at the university of michigan policy school we have looked at defined contributions plan, how they allow people to access funds prior to retirement how people behave. during the great recession, did people win face with financial pressure associated with economic downturn, did they tap into those monies. we see not a majority it depends when you measure it. get upwards of 50% tapping in in some way. so i know we have -- i feel the

train left the station but if that's what we are going to have, we have to think of helping people think about are you sure you want to tap into that during a recession because that means it is not going to be there. it is not sort of the baby boomers were caught off guard because they didn't realize that these plans would matter, i feel like even for those of us who our employer provided plans have always been in this forum we have things to think of too. there's temptation when there's a downturn to use those monies, immediate consumption seems more important, like not being able to pay rent or utility bills, even routine bill payments and how that's associated withdrawing down on retirement savings. i think this matters more for low wage workers. >> no it doesn't. that's what's surprising, it is middle class workers and upper middle class workers who are tapping into 401(k) plans, with loans, withdrawals, rollovers cash outs. the low income workers don't have anything. the 401(k) has really preyed on

going to use a word because we are in front of people we are going to -- i want you to sharply focus on how different i am from chip the 401(k) system is in many cases a predatory system. fees are quite high. people don't know what it is. protections of the money when it goes into ira is not protected like a fiduciary, so we are getting tax deferral money for retirement, and it is being used, not blackrock but other financial institutions, because you're still in the institutional space where you do really good things, but the 401(k) is inherently a fatal flawed design system it is voluntary, it is commercially run. all of the money in it has to be fully liquid even though it is supposed to be for long term savings, but you can only match it to short term liquid accounts, and it can be withdrawn in a lump sum.

we are the only country with tax deferred retirement money that we allow withdrawals before retirement. because other countries said we are giving you a tax break here it is for retirement. you can't use it before retirement. hardships are supposed to be something that happened once in a lifetime. to people with 401(k)s, it happens every couple years. it is liquid savings and they're flawed. the 30 year experiment with the 401(k) system failed. we need a mandatory system on top of social security managed by good folks like at blackrock and other institutional investors. i wish all 25-year-olds were in a retirement account but they're not. as carol said, most companies don't have a retirement plan and it is falling. it is over 50% and it is falling, over not just recession, since 2000.

small employers, medium size employers, even some big employers for big portions of their employees are not providing any retirement plan. so stop the $140 billion incentive to try to get people in it, stop predatory fees. protect all retirement money that's in iras. that's the kind of radical reform. and expand social security not reduce it. >> i will say there has been movement to go to index funds there is more awareness of this. >> a lot of her comments are spot on. i knew she was going there. i qualified my statements, not all of them are well designed plans. i knew she was going there. look, the joke i typically use is you look at, you know, the

affordable care act, what is 401(k) named, some section of the irs code. we never intended this to be the plan it is today. if we would have -- so my point talking about the regulatory reforms, we made the biggest improvement we made since its inception about eight years ago, and i think those reforms have shown promise, but teresa's point, it is not a retirement plan, right? because what does a real retirement plan it do. it takes away uncertainty about when you're going to die. it says i am going to get a paycheck for life. how many people in this room know when they're going to die? nobody.

none of us know. if you know, raise your hand. but nobody really knows when you're going to die. what we should do as a room, we should say let's put our money together, we are all going to pay out. unfortunately the people that die are going to subsidize. that i hope for whom that happens to that's not your last thought, right? i actually don't think it is many people's last thought, my money is going to that person. but that you know and people that live longer get to receive the money from people who died earlier than expected. that's the only way we've ever been able to figure out how to diversify uncertainty around how long you'll live. that makes such a difference in the efficiency of how long your money can go. so if you're going out and self insure retirement risk you go to a financial adviser that says if you're 65 you're expected to live to 85 average mortality.

on average you're expected to live, we should prepare beyond average. this is the case where not everybody is above average. so you basically are saving more money and spending less money goes less further than it could be. it is how social security works, how old defined plans work in that system your money went about a third farther. when you talk about a savings crisis, i feel bad. i know people are saying what do you want me to do i am saving as much as i can, i can't save that much more. if we could figure out how to make that money go farther in retirement, that would be relief on the pressure of saving more. that's what those plans did. the biggest problems with these plans, putting aside, there are

some badly designed plans that have bad fees, fees are too expensive on them. and i want to be clear about that. we are big believers in transparency in fees that you can solve this problem with index funds. but having said that, your money goes about a third further in retirement through use of that many mortality pool. it is impossible to get that in a 401(k) system. that's the thing that would go far. things like teresa has done around our bond i hope she will describe in a minute would be a great way to be an investment vehicle. that mortality pools could invest in rethinking that mortality pool. today, the only way to get access to that is a db plan, and

through insurance companies. insurance companies have their own issues addressing the dc market. that could make a difference solving this problem. >> soy think we should -- let's move a little bit to there is this savings crisis a lot of people don't have the money. so people are really working longer. they're trying to work longer trying to hang in there, and there's huge variety. does anyone want to talk to the issue of job market, how people are perceived when they're older, yet some of the choices people are creating for themselves. >> it is your turn. >> yes. so we focus at encore on a narrow slice the slice we are looking at is not just people working longer but people who are working longer and finding ways to have some social impact, along with their longer working lives.

so we are not looking at the whole market from where i sit. but from where i sit, i am looking at an example of working longer in the second row. one of the people i profiled is here, feel compelled to tell his story. fred wineberg retired as a new york city parole officer at the age of 55 has been working for 30 more years since in a variety of ways. he is now in his early 80s. he let's me say that because he trusts me and he's still looking for a new job as we speak. so early in his career he got a degree in social work at nyu and he went and worked, had a long, distinguished career in law enforcement. when he retired, he did a bunch of things that are pretty common for people that want to continue to work, are healthy enough to continue to work, and who know they have to support themselves another 30 years. yes, he had a pension, he is one

of the lucky ones but he needed extra money. and he faced some of the many things people face later in life. he is a caregiver, another issue that comes up for people. i feel like fred personifies what we are talking about. he hooked up with an organization called reserve, which places people over 55 with stipend roles in nonprofits, government agencies, and works with a lot of people who may not need to make what they used to make but still need to make money, want to contribute, want that purpose. he ended up doing work as we say, the kind of work that human beings are needed to do and he went back to his social work roots and spent a lot of time at hospitals for special surgery, working in a group as a health care navigator, one of the new jobs on the rise. health care is one of the only growing fields we see. i feel like fred's trajectory is

similar to what we are talking about. you're right, fred is not able to take a break. this is continuing. but it provides meaning as well as a financial safety net. the other thing that he did that i've seen people do in a lot of different ways he went back to improve his skills. he went to the police academy in his 50s, i believe and became a detective in brooklyn for a period after he retired. so we are doing a lot of work. started with community colleges four year institutions to figure out what are the kinds of skills enhancements people need if they need to invest in themselves and invest in the market. if you're going to have to continue to work, you're going to need probably a different set of skills than took you to the first place in life. we say institutions have to change. another set of institutions that really need to change are learning institutions. how are they going to help this generation of people who may not be able to go back and afford a

four-year degree a masters degree, it is certificate programs, short term training, and it is skilling you up for jobs today which weren't the jobs that existed 30 years ago when you first went into the job market. >> add into this one of the things from people i interviewed in the last year or two is first of all, a degree of variety among those people. they're all in their 60s and older, have had to face taking care of themselves in a particularly new way. they can't retire or they have to down size significantly. it is one or the other. they either have to keep working or down size significantly. one of the things i am struck by, one is an executive flipping burgers at a golf course in his late 70s now, was out of work a couple years in the recession pulled himself back in, loves

his job. likes the activity of it. another woman younger, 62, lost a couple of jobs, early job loss divorced had to down size significantly. she's living in a friend's basement in cape cod and working at a gym for $13 an hour. but she has a different view on her life, feels it is less stressful than the former corporate life and she's living a more relaxed life on cape cod. so i think one of the things i have seen is a degree of resilience required in older age that maybe was always needed but i am writing about it, and curious if anyone wants to comment on the psychology of that even how that effects savings. >> i am trying to -- we look at thousands of people in our data set, and so what i am finding is that people want to live, and

there's what we call scloj cal, if you live in a friend's basement, making $13 an hour, can't do anything about it a natural psychological thing to do is tell a reporter things are fine, i am more relaxed. right? but what we do find in this big data set you can relate to this if people lost a job involuntarily at any age, but especially older their rates of depression go up, and it seems to effect their rates of morbidity, how many activities of daily living you need, and eventually effects mortality. how you are treated in the labor market effects mental and physical health. we are also finding, this startled me carol, i think we talked about this before that the jobs older people have now are actually getting worse on three dimensions. i feel i don't have control over

my time at work and that it is a question of being monitored. there's a lot more supervision, jobs at the lower hierarchy. that we know from the whitehall studies. if you're at the lower you'll have more inflammation and risk of stroke. there's more bending and stooping 55 to 70 than ever before. we think that's linked to older people taking warehousing jobs. anybody saw the harpers article about workers working at amazon, that's a phenomenon showing up in the data. i love the resilience of the human brain to say whatever i'm doing is just great but the real effects in terms of mental health and inflammation, stroke risk, seems to be very

correlated with this. >> i want to raise an issue. struggle to raise it, and if it takes us off track, we can talk about it. one of the things you talked about, the woman living in someone else's basement. do something on racial differences and patterns in wealth. one of the things i think about also in relation to research and to my mother difference in home ownership rates. part of our glorified story of retirement in the u.s. used to be that when people reached retirement, they had a home they paid off. your story made me concerned. i am starting to think also for some semblance of the population, they're reaching old age and don't have that bill they no longer have to take care of. they still have this rent check. i worry about your friend, right now she's fine. ten years ago when she has health illness and can't work,

we have that to contend with that we didn't think of in the past. we think they won't have any rent check no mortgage payment they have somewhere to live at least. and that's an issue we have to deal with as society as well. >> important issue. >> the other thing, too, i think we will get better at understanding this, the presumption that you can just continue to work, and we saw the exception here cudos i want to talk to you afterwards, find out some of your secrets, but we know that there's a great economist, when he speaks comments on decline of people as they get older starts in your 50s, accelerates through 60s and 70s.

i tell him never put -- when you speak at our event, never put this out because half the room starts to immediately say oh, my god, he's right. i can't remember i am failing the test he is asking us to take. so but, you know, the take away from that is you know, we need to think about why did the notion of retirement come about to begin with? it came about in the late 1800s early 1900s because companies that were as industrialization took effect, you had people operating big machines like locomotives, they realize if you didn't give people opportunity to leave, they wouldn't. so you had people with declined abilities, driving locomotives through rail yards to no good. so that was kind of how the early retirement systems came about in the u.s. so i think we need to get a good

handle on okay to the extent there is a crisis, where is the most effective way to having the institutional reforms. i think one of them is we need to understand there are some people that will need assistance flat out. but there always have been people in need of assistance, there may be more of them. there are also people that can work longer if we can create the right labor conditions for that but we need to make sure they're making the right financial decisions before -- while they still can is the best way of saying it, and again create the labor market situation so they can do that. what we don't want is people making important financial decisions as society when they're in their 80s. that's based on research we know today not going to lead to good results. >> given that we are all handling our finances and also our health much more individually, how important at this point are close family ties

the difference of people that have that and don't have it. it is a little off this panel, but it is important when you get to that age to have people helping you with this. >> for me, i try to take it back, who is insuring your risk. you can hire a company to do it buy insurance buy long-term care insurance if you were in situation to do that, teresa could give us stats on people who can't. but you know you can do that. another form of insurance is like your family and comes with people that have enough money i'll give you, you'll get what's left over. if i spend it all, i am coming back on you. it is like this odd kind of little tiny insurance pool of family members. >> let's be clear, it is daughters and daughters in laws. adult daughters and daughters in law.

and it is the general gender division of labor. people taken care of by daughters and daughters in law do do a little better, even though they're worse off to begin with, hard to disentangle but it is pretty bad for the woman who is trying to -- she's working because most women do work and actually do the caretaking. even worse when we are taking care of little kids. so it does palpabley hurt adult women's labor force conditions and we are doing projections hurting her own retirement. so actually not having good care systems, having inadequate income is hurting that next generation of working women and their families and their own retirement for the next generation. i am going to think of something optimistic to say before i leave! i just haven't figured it out

yet! >> we want to take some questions. before we do that i kept hearing this phrase of 65 is the new 50. and i wanted to ask everyone here what they thought about that and their view, was that good was that bad, what it made them think of. if you want to comment on that. >> okay. in my circles we say 65 is basically the new 65. i think by trying to attach these earlier years, one thing you're doing is you are kind of discounting the role that experience can play in life. when i sit, trying to realize, you just said that we need to kind of put new value on the human talent that exists in the aging population. that's the only way we will end age discrimination. owning your age as you age is a

very important piece for ending age discrimination. so i think we need to out ourselves. that's why i was happy fred let me say that we are not comfortable with this. we all have to be really comfortable with that. >> so i think individually we are better off today than we were when probably you chose the 50 benchmark, we are on average more healthy have more human capital, willing to look for opportunities to use it. institutionally, our institutions are in need of help. you have that capability that potential, but you're not able to use it, and you're in a situation because of some of the changes that we made in the retirement system itself, you may be worse off than a few years ago. there are good parts of it that you have the opportunity to

perhaps spend longer and live better as you live longer, but you're doing that in maybe a context that needs some repair. but again, i think these kinds of events, these kinds of discussions are where the change starts to happen. >> so did you need something like i am teresa and i am 57. i am teresa and i am 57. when i hear that phrase, 65 is the new 50 i think 65 is the new 17 those are the jobs they're taking. they're working alongside the 17-year-olds. but i really like what you said, that 65 can be the new 50 or new 17 because there's a lot of worker training that people want access to not even just in centers, but also at their employment. so one of the unfinished business of the age discrimination act is that

there's no discrimination by employers on how much training they give their current workers. even though i can say to you i am teresa and i am 57, if you're at work, don't do that. the strategy would be i would tell everybody, especially if you're a woman, do everything you can to sort of act younger so that you get training. but you might be right. maybe i'm not an activist or revolutionary at heart. or join a union. >> if you are in a position to hire, something you can do as an activist on this issue. >> and you need capital to be able to hire. and that's 7% of the population. >> i hope that will change quickly. i think companies are increasingly aware. we are working with a global coalition on aging they're developing a set of principles, and they have surprisingly large number of well known companies subscribing to the principles about exactly the issues you're

talking about. >> i totally agree and there's some hope. >> optimism. >> exactly right, that the biggest training that happens is on the job and that's where it needs to happen. >> i am optimistic and pessimist it can. 65 is the new 50 is positive for some and negative for others. for some it is possible to have a second act and support themselves, and think of people more in the situation i am in, it means that i am supporting somebody else for a long time. which it is my mother, my brothers and i love my mother and are excited but we look at our peers we went to school with, went to the same private schools and college how much wealth do we have in our position in the life course compared to what they have. they have parents that still give them money even when they have kids and stuff like that, and we are making payments in the opposite direction.

for some people, 65 is the new 50 is not as positive an experience as it is for others. >> 35 could be the new 50 too. >> maybe institutions, we have to think about the variation and experience. >> and we are not collectively defined by age any more either. it is where you sit, what your station is. >> that's right it is very different. >> there's commonalities that aren't age defined that aren't coming up so often in this conversation. >> that's true. >> i would love to open this up to questions. it has been a great panel. want to give you time to say some questions. and you can ask anyone on the panel. >> hi i am going to out myself, i am michelle, i am 66. >> hey michelle. >> i am very clear. i am so glad to see this panel

because i don't see a lot of talk about this honestly, meaningful talk. i'm very clear that despite what is called the recovery, mainstream america is struggling to put food on the table. most people are. i have a different mindset. but one thing i believe in is this ability to brainstorm and think of things you love to do that you're good at and create income streams and i'm surprised there isn't more discussion about that. could be something as simple as walking dogs. when my business was slow a few years ago, i put up a card made a card on vista print for no money called the pet nanny. i went around, i walked dogs. why? i make no money but made me feel like i was doing something.

i don't see enough of it. i think the problem is the mindset is that everybody feels like the ground was pulled out from under them. everything we thought it was going to be no longer exists. and it is a real curve ball, people can't recover from it. people need to hear messages about the fact that they can create meaningful alternatives maybe it is not what they thought, but revenue streams and such. >> so coming back, i just mentioned global coalition on aging, i was having a discussion with some representatives there, and i was surprised at this. they indicated that the fastest growing entrepreneurial segment were people in your age group, that we all read about the internet, 20-year-olds making a lot of money or entrepreneurial, but the fastest

growing entrepreneurial segment is -- >> and in that population, much of it is what's called micro business. very, very small operations like your dog walking operation. >> another question here. i am mickey white, i am planning to stop working this year. i think we really have to sort out. there are people working in jobs where experience is valued, legal profession is one of them. i don't know whether you guys are like this -- i think people that lost their jobs, it is not fair to call that a retirement problem. that's a problem with our economy. that's conceivably related to

the enormous inequality to our strange tax code. changing the retirement age for social security is fine for middle class folks who haven't done more than pick up a pencil or use the computer. i think it is probably wrong for people who have hard physical jobs. i thought the idea about using comparative mortality for 401(k) was a wonderful idea haven't been fortunate enough to hear it before. i would be curious as to whether the government would insure investments like marissa plans as opposed to backed by government insurance. i think we need to sort out how we treat various issues. we need jobs for people who otherwise would have been

employed in manufacturing when we have a short pool of manufacturing, maybe all of the problems we hear about asian manufacture of batteries and air bags will bring us back some manufacturing to this country but that's a long track. i would appreciate sorting out problems a little better than calling it all retirement. >> good point. >> we are seeing the effects of a lot of the issues you talked about and sometimes we are calling it retirement, sometimes we are calling it. >> layoffs. >> sometimes calling it technology, sometimes calling it globalization. it is really all inter linked. what you were just talking about, about dealing with your mother, again, that's part of the same thing, what's happening to the boomers is effecting younger people. >> of course. >> and will effect even younger

people. so it is all linked. i can tell you, i know you have a ton of experience on this policy makers spend a lot of time dealing with these issues and they're very concerned about it they also have a certain amount of political capital to be frank political capital they can spend. so just we made proposals around putting kind of letting people pool their mortality uncertainty in 401(k) plans seven eight years ago. rhode island treasury gave guidance on that three weeks ago, so it has been seven years. one reason why they were -- they knew exactly what to do they are really bright people. one reason they felt like they couldn't do it in that behind

closed doors, saying you know, we spent most of the capital on health care reform. we felt like we needed to do that. so those are -- just talking about people are talking about it aware of it, trying to address that but i am sure you fought good fights on -- >> i have good news, i just realize, the federal government is not doing anything but in 17 states and one city this city, new york city, stringer is setting up a plan to have everybody in the state and the city join a retirement plan. that would be basically a public option. that would be an option to the commercial systems that it would be low fees and pooled mortality groups. california passed a law two years ago, state of connecticut scott stringer, controller of

new york city and the mayor is in favor of it. this is the way social policy happens in the united states. you have a handful of states important states that have something that looks like unemployment insurance worker's compensation or social security and then it gets lifted up to the federal level. so i am optimistic about employers doing more training to older workers and i am optimistic about there being a government solution to the pooled mortality issue. i am not optimistic about one issue you brought up, before we start talking about people over 65 getting work we have to make sure the 25 to 65-year-olds are fully employed and we now have 50 million people underemployed or out of work, even though we are in a so-called recovery. that's priority one. employer of last resort, if the private sector won't create good meaningful jobs, the government1 yh could.

that debate -- >> that's more of a capital issue. >> the other thing we haven't talked about tonight which has been extremely impactful to balance sheets is what's happening to interest rates. we built an index and it tells people 55 to 75 what's the fair cost of your retirement liability. that index is up this year about 18%. >> 18%. >> if your assets didn't go for a 55-year-old, let me be clear. if your assets didn't grow by 18%, you actually fell behind in what the assets are able to produce in retirement. >> wow. >> that's a lot. >> so the low interest rate environment that we have now and again, you know, i think demographically, you know, you are starting to see more studies

that say is this going to be a long term effect where rates are -- >> we are trying to create jobs with low interest rates but not doing a good job and it is causing more retirement insecurity. why not go to wba. >> question back there. >> i am 59 years. i am only 17 years old. i have been following this conversation with great interest. you guys are hitting on some very big subjects deep subjects. and one of the points that was raised was about income streams you know, finding ways of being entrepreneurial. that's a bigger issue i am curious as to what your data and search has lead to which is the issue of risk.

one of those people, fortunate to create income streams, live a great life but only came with risk. risk applies not only to the search for meaningful work but to your point, sir, which is the risk related to aggressive quote, unquote investing required to produce returns in the high teens, right? that is not what we were trained to do or what our education and quote, unquote wisdom led us to believe. there's this issue of risk. i am curious what you think. >> job market risk, financial risk. the investment risk that you made the wrong decisions longevity risk and health care cost risk. we all face it but we are all going to have very different experiences with them. you know what do you with risk you provide insurance. we are trying to solve that with

just having everybody accumulate a lot of assets but what we really need is self insurance, we need pooled assets. >> and i think as an industry, financial service industry or more broadly in the academic community we have spent the last 50 years since development of modern portfolio theory we have mostly been concerned about managing investment risk and that comes with building a diversified portfolio, understanding how much risk is appropriate for your age and your situation and your goals. we're not that good at talking about the risk teresa just laid out. you can address them. i know we at blackrock are working on these issues feel like we have good offerings for our clients, but it comes with, you know, the conversations, intuitive conversation i talked about a well diversified portfolio, i might as well be

speaking foreign language 50 years ago. everybody knows what that means today. and what we need to do is quickly get to a place where we all understand what we are talking about when we are managing retirement risk, the risks that teresa talked about. i am confident we will get there, but one of my recurring strengths through the evening but we're just not there yet. >> the only other risk that plays into this and does effect longevity is minimizing health risk. and health insurance companies are finally incentivizing healthful behaviors and employers are also incentivizing healthful behaviors. has anyone seen the ad on the subway about reimbursements you can get, a small insurance company that advertises get money back for joining the gym. and this is starting to become a really more common image that we are seeing and that's just another way that risk plays in

that effects us all as we live longer. >> one more question. >> i just wanted to comment on something that teresa said that had very strong meaning for me. the cycle of this and getting depressed. retirement is not a word in my vocabulary. i hear somebody say retirement i close my ears to it. the second aspect fear. i think i recently one of my many communications with morrissey, i mentioned that i am working because i need to. and i am afraid what's going to happen if i don't work. i don't want to sit in starbucks and watch people go to work. i have this strong need to feel like i'm part of the mainstream. i'm afraid. i really am afraid. we are talking about age. i am going to be 82 in a couple weeks. i don't think about my age.

who is hiring people. but i go at it i say i don't think about my age. it is what i can do, what i can bring to the job. >> yes. >> that's what's important to me. but when mentioned the psychological implications, it lit a light in my head. it's so true. i can't speak for others. i can only speak for myself. >> yeah. >> a lot of people that i know my peers who have retired i say what are you doing with yourself? well, they're doing this and that. i get this superior attitude that i'm working, well, i'm still working. i'm part of the crowd. >> yeah, i get it. i get it. thanks. >> i get so insulted when people in my firm say what are you going to do? >> i can't imagine. >> like there is nothing else in the world to do. but write a brief, right? i think that's gender specific.

i think that people of my gender understand that the world has lots of wonderful things to do, especially if we're lucky enough to live in new york city. and i don't think you should worry about it. >> wow. what an ending. that's a great ending. >> wow. >> thank you so much. >> thank you for this terrific panel. and this terrific audience. it's been wonderful. >> thank you. >> thank you. [ applause ] ♪ join us on tuesday when we'll be live with a hearing on immigration issues with the head of immigration and customs

enforcement. sarah saldana. she'll testify before the house judiciary committee. you can watch that starting at 10:00 a.m. eastern here on c-span3. also tomorrow senate foreign relations committee chair bob corker. he would like congress to review any iranian nuclear deal, and he has introduced a bill to make that a reality. working on it with fellow committee members tomorrow live at 2:00 p.m. eastern. and more foreign policy on wednesday when the u.s. ambassador to the united nations, samantha power will testify on the 2016 state and foreign operations budget. that will get under way wednesday at 2:00 eastern. we'll also have that here on c-span3. with live coverage of the u.s. house on c-span and the senate on c-span2 here on c-span3 we compliment that coverage by showing you the most relevant congressional hearings and public affairs events. and then on weekends c-span3 is the home to american history tv with programs that tell our

nation's story including six unique stories. the civil war's 150th anniversary. visiting battlefields and key events. american artifacts touring museums and historic sites to see what artifacts reveal about america's past. history bookshelf. the presidency, look at the policies and legacies of our commanders in chief. top college professors delving into america's past. and real america, featuring archival government and educational films from the 1930s through the '70s. c-span3, created by the cable tv industry and funded by your local cable or satellite provider. watch us in hd. like us on facebook and follow us on twitter. the clinton foundation recently held its fourth annual health matters conference this california. the opening panel on health innovation featured a group of entrepreneurs in the health care industry, including a venture capitalist who started his own health insurance company and a

stanford university drop-out who started a blood testing company. and who "forbes" magazine calls the youngest self-made woman billionaire. this is just over an hour. >> we have here a very fascinating opening panel. i want to bring them out and talk about not only the disruptions and the positive way they have a made in health care, but why they do it and how they measure success in terms of people. so let me first introduce our panelists. i'd like to bring out elizabeth holmes. the founder of theranos. she dropped out of stanford to start this company.

it's a blood company that is now employing more than 500 people and is valued by investors at about $9 billion. not bad work. and you will see, she is quite young. and i first met her at henry kissinger's 90th birthday party with george shultz who is 92. so i thought anyone with that sort of age span has got a bright future. and since i'm closer to 92 than her age, it looked like a really wise move. 6 so let's bring elizabeth holmes out, give her a hand. [ applause ] josh kushner is the co-founder of oscar health. who wants to do something really interesting, which is to reinvent health insurance.

and how people interact with their physicals and the overall health system. i can't wait to hear about it. i had a highly unusual conversation with the chairman of one of the largest european insurance companies who happened to be dutch a couple years ago. and i asked him if he wrote health insurance. and he said yes i do, but we don't make any money on it. we don't have any government health insurance here. insurance companies write it and the government subsidized people by income based on their need. but he said we shouldn't make any money on this. we should make all our money owl of traditional insurance lines. i thought i wonder if there is a solitary soul in america who would say that. interesting. this guy has some interesting ideas. so let's bring out josh kushner. [ applause ] >> joe kiani is the founder and

chairman of mossimo corporation. it was sort of a garage startup that now employees more than 3,000 people worldwide. and it's production and distribution of a market-leading measures through motion and low profusion pulse oximetry technology. it's another one of those non-invasive medical breakthroughs. but i know joe kiani through his commitment to build a coalition to eliminate preventible patient deaths entirely by the year 2020. and he just had his annual conference not very far from here in irvine. it's a fascinating struggle with so far very good results. and an amazing thing. it would be interesting to know why he thinks we can do that. so let's bring joe kiani out. [ applause ]'@ú zk

our last panelist is jeffrey selberg, who heads the peterson center for health care which has just gotten kicked off. and this is really important because michael peterson who is here and his dad pete peterson are great friends of mine. and they have worked for years to get americans to focus on the long-term consequences of unsustainable debt. and how we can bring debt, especially the debt we run up every year consuming, down so we can invest in our future and secure it. and after years of beating their heads against the wall, they looked at the numbers for the federal budget at least and decided that actually all the real structural problems are in health care.

combined with aging population. and they decided that they would try to be a part of the solution instead just sitting on the sidelines, complaining about it. so they are developing a growing program of initiatives aimed to improve the american health care system. so let's bring jeffrey selberg out and thank the peterson foundation for what they're doing. [ applause ] let's just begin with something elemental. why did you decide to do what you're doing in health care? let's ask all of our three reformers in the middle here. whatever possessed you while you were still a teenager to do this?

>> i had the opportunity to spend a lot of time thinking about what i could do with my life to make a difference. and i've always believed that the purpose of building a business is to make an impact in the world and that we're all here for that reason. and to me, nothing matters more than the reality in our health care system today which is that when someone you love gets really, really sick, by the time we find out about it, it's often too late to do something about it. and in those moments, nothing matters more. and if i could spend my life trying to change that, we could make a difference in the world. and spending a lot of time thinking about that led to the

realization that we live in a system in which people can only get a diagnostic test paid for by insurance once they're symptomatic for a condition. and so the ability to create a preventative care infrastructure where people have access to the information that can change outcomes by making it incredibly inexpensive, by making it less invasive could help to realize this change where people start getting access to actionable health information at the time it matters. and that's what our life's work is about. [ applause ] >> what does it mean to reinvent health insurance? we thought we were doing pretty

good just to get 10 million more people health insurance last year. some people did. i think it's an interesting idea. explain what you mean when you say you're trying to reinvent health insurance. >> sure. i think this is on. yeah. well, the vision for oscar came about when i opened my health insurance bill about three years ago and realized that i had absolutely no idea what it meant. so overeducated and at the time was starting a business, and i realized i didn't know what my benefits were, what doctors or hospitals i had access to how to play a claim. the list goes on. and if you think about health insurance in reality, it's one of the most important relationships that we have from both the human perspective, but also cost perspective. the idea that we had when we set out was to kind of use technology and data to make the experience more simple and

transparent and understandable and relatable. but, you know, what we've been able to accomplish is we've been able to take the data that we've gotten and actually not only provide a better consumer experience, but provide people better access to better care, primarily because we actually know a lot more about them. sos, you know there has not been a ton of innovation in the space. we're the first new health insurance company in new york in about 15 years. you know, we feel very grateful that we're going after the consumer market because to date, health insurance has primarily been sold from brokers to companies. and for the first time ever, the consumer actually matters. so our ambition is to create the best consumer product possible and do whatever we can to enable people to make educated decision about their health. >> so you're marketing to the -- in the individual market?

which is about 9 or 10% of the total number of people -- who could buy health insurance in the country right? the rest of people are covered by bigger plans. >> to date. i mean we only started about 14 months ago. but we didn't start the company because we believed that there is a void to be filled in the individual market. we started the company because we felt like people deserved a consumer experience in health care where as to date you know what we say often is that health insurance companies traditionally have done everything they can to acquire customers. but shortly thereafter everything they can to avoid them. whereas we want to do everything we can to be proactive, to give people access to care, to give them things for free. i mean we're paying people to go to the doctor. we're paying people to get flu shots. we're giving away free generic medicine. we're giving away free physician visits. so being proactive is what we're

hoping to accomplish. >> and what percentage of your potential market know you exist? >> the what potential of the market knows we exist. right now we're only in new york. >> even in new york. because new york insurance is generally higher than it in the rest of the country, as you know. and one of the things that really burned me up in this whole health care debate when everybody was saying the government lied about their policy because it went away, before the health care ever passed, 80% of the policies in the individual market lasted two years. or less. and so i'm going to be very interested to see. you know how you modify the policies hour, you continue to do outreach. talk a little about that. there is almost no understanding of who these people are and how they struggle to become insured. so talk about it a little bit.

>> yeah, sure. so right now about 10% of all those that are eligible for insurance that is signed up this past year signed up for oscar. which is a decent market share for a new entrant. but the most interesting fact about us which we haven't ever disclosed is that 40% of our members signed up for us because they heard about us through existing members. so no pun intended we claim to be the first ever viral health insurance company. but you know, i think -- i mean the best way to acquire customers is by having a really good product. and that's what we've been spending all of our time and attention to accomplish. >> joe, talk a little bit about how you moved from your core

business into this audacious effort to try to eliminate every preventible death in the health care system in america. why did you do it? how did you do it? what in the world ever made you think you could do it? >> well, thank you for asking. first of all, since the topic is innovation for helping people i want to congratulate you for your innovation. with this commitment-based approach of holding summits like you started your last count you have impacted over 430 million people around the globe. and i learned from that. you know i think in life while it's interesting to know why you do what you do, it's more important what you do and you do it. because how you do it teaches others maybe what to do in their

own world. so i have been around the medical space for about 20 years. i remember when the institute of medicine first reported in 1999 to err is human and reported 100,000 people were dying from preventible causes in the u.s. hospitals every year. i was shocked. but a lot of great smart people jumped in. and i thought, okay, they're going to take care of it. and i went on doing what i did, making non-invasive monitors. and then a few years ago, the new data came out that showed over 200,000 people were getting killed in our hospitals from preventible causes. and that's when i realized maybe it's time i step up and try to do something about it. i've been fortunate enough to get to know a lot of companies in the medical technology space. a lot of great hospitals and clinicians. a lot of amazing people like you, president clinton. and i felt maybe if we brought

everybody together on silo at the eco health care system, bring in the meditech companies bring in the hospitals, bring in government, bring in the patient advocates that provides powerful voice. because when you think about 200,000 people dying every year it's a number that runs through your head unfortunately. i think stalin said one death is a tragedy. a million is statistics. but when you think about that one life, how it impacts the family that was left behind, it really grabs you and wants you to do something. so we borrowed shamelessly, with your permission from the clinton global initiative, created this commitment-based approach that if you're going to come to our meetings you're going to make a commitment. and for my engineering background, we started unpealing the problem, seeing what are the things that are causing these preventible deaths. from hospital-acquired infection to medication errors to lack of monitoring when someone is

giving opioids that reduce pain that also stops them from breathing. and we created solutions. we asked the meditech companies the hospitals to go implement them. we asked meditech companies to share their data to anyone. maybe to josh, to anyone who could use it. to come up with algorithms to predict it. and fortunately, it's worked. i think we reported at the summit that you were gracious enough to attend. and the last two years we have gone from saving 600 lives a year to over 6,000. and we hope maybe next year we can report 60,000 lives saved. >> let me ask something all three of our innovators before i come to jeffrey. is technology -- what role does it play in creating the health care system we want?

and what, if any economic imperatives actually block it from creating the system we want? that is you have all disrupted marketed with non-invasive technology, with you know whoever heard of an insurance company giving you medicine. all this stuff. but how are we -- how is it all going to come out? how would you measure the success of what you're trying to do? and how much of it does it depend your definition of success depend on the whole system transforming itself? how much do you think about the health outcomes in america and how they're not as good as they are in other countries, but we spend more money? where is the end of this and what is the role of technology going to be? how do you think other people in

your line of work should behave? where is this going? >> we've always seen technology as a tool. and it's a tool we believe, for empowering the individual. because we believe very strongly that the answer to our challenges and health care lie in empowerment of the consumer and in enabling people to take more control over their own health and therefore their own outcomes. so what's been very interesting to us about our model is we decided we were going to start building when we launched our commercial laboratory. initially at 50% off of medicare reimbursement rates. now increasingly at 90% off of medicare reimbursement rates. and that's lowering medicare and

medicaid reimbursement rates over time by definition based on the way that we're billing. so technology can serve as a tool for facilitating change in policy and for empowering the individual to then get better access to in our case the diagnostic space, it's 80% of the decisions that are made in health care are driven by this laboratory data. so if you can facilitate that access in a preventative context, you can change outcomes. and we strongly believe that one of the things this country is so great at is innovation and creativity and applying it toward helping to solve policy issues. in this case, with our work, without having to raise taxes or cut programs to realize the same kind of savings.

>> i want to come back to you. let me ask you. joe, you made your money and you did a lot of good with your medical device work. and one of the things that you said at your meeting or whatever this week is that some of the people in your line of work think that if they share information and we have truly comprehensive electronic medical records, which it will be necessary to do in order to save all these lives, as well as do it in a way that lower costs. so how do you get other people to join? what -- how come you think you can do this and still be successful and so many people don't? how do we break down that illusion that nontransparency is good economics? it's disastrous over the long run. >> well, first of all, with your help. you've been a huge, huge source

of inspiration and people wanting to get involved in what we're doing by coming and helping start the patient safety movement. but we have to think about at the end, sooner rather than later, we're going to become either victims or recipients of a great health care system that not only has amazing technology amazing doctors and nurses but it provides us safety and quality care with dignity. so i tried to reach out to the ceos of the medical technology companies and say to them, look, 20 years from now, after you have retired, how would you have liked to have left this industry? because if we don't all share the data we can't get do this patient data superhighway where we can create these predictive algorithms that can tell us where we're going. for example, if we're in a hospital and we're just looking at the vital signs data, that's

helpful. a doctor or nurse might see it, but not everyone is going to see it. if we get the data from x-ray from imaging from lab, all of the sudden smart algorithm and computers can predict it. and we have 50 companies who have made the pledge so far. companies like cerner, ge, phillips, zole, massimo. but we need the rest. if we don't get everyone to share the date that that their products are purchased for. we're not asking for the internal data, but what the products are purchased for, we won't be able to get it. i made the analogy we're like leonardo blind men trying to feel out an elephant. but if only three are feeling the tail and the side, we're not going to know what we're touching. so i hope that they will join. >> so josh, this insurance model you just briefly described to us just as some layperson

listening like me from a naked business model point of view, it sounds like you're saying if i promote wellness i can insure people pour less money and still make money. is that right? is that essentially what you're trying to do right? >> absolutely. >> so what we want to do is to insure for wellness. now, since -- and presumably, the bigger programs including medicare and medicaid and the vets program and the federal insurers program and everything else would follow your lead if you could do this. that way you could be truly disruptive. what do you need to happen that is beyond your control for your business mod toll have a good chance to succeed? >> great question.

so i think it's mostly about aligned incentives. i think there is a lot of things that we're doing that are very differentiated. and just to go back to the question you asked before how does technology impact our businesses, or the industry, i'm of the belief that if you're not a technology company in the next decade then you won't be a company. i think this is just an unprecedented change in the world where everyone either needs to adapt or just move on. but there is so much that we can do, for example amazon and google know when a woman's pregnant almost immediately based on what she is searching for. but a health insurance company doesn't know until the claim is paid three months after birth, right?

so our ability -- [ laughter ] yeah. [ applause ] so our ability to understand what is happening in the system in realtime enables us to actually take something that is real. we can't prevent by giving away free medicine. if someone is sick, they're going to be sick. but we can understand what is happening and point them in the right direction. i think over time, our ambition is to work even more intimately with systems and we're starting to have conversations around that to say how can we actually work together? how can we enable you to interact with the customer in a way which we believe we're capable of doing, but actually work together to make sure we're providing the best consumer experience and the best overall experience. i think in many ways the insurance company and the hospitals are butting heads because incentives aren't aligned. and hopefully that will change

over the next years. >> it's interesting that you gave that specific example, because that's another version of the point elizabeth made about early intervention through technology not being insurable because you don't know you're sick yet. and both elizabeth and joe have different non-invasive technologies. that's what they do for a living. that's their day job. so let me go -- jeffrey, how -- these people are really amazing right? and impressive. don't you feel better living in a country where people like this are doing this stuff? [ applause ] so how do you propose -- what are you going to do with what they know? in other words, how do we align the incentives and the health

care system and government policy and all of that so that their ideas can bloom? and others too. the people that aren't on the stage. i mean we've got a system that has for a long time actually punished people who did what they were trying to do. and underimburst them and everything. now we're getting to the point where we're maybe almost into neutral, but we don't have our pedal to the metal. we're not creating a 21st century wellness system. >> well first of all, mr. president, i want to share joe's gratitude to you. thank you for inspiring all of this. it makes it easier for us, first thing. [ applause ] i'd say the second thing is that we believe going out and doing it is the best way. that if we find ourselves in

policy inside the beltway, we're going to be there for a long time. i think it's one of the reasons why the institute of medicine says it takes 17 years for these kinds of innovations to be fully script. so our thinking is just what elizabeth is doing. she is out there doing it with walgreens as her distribution network amount. you go at it and you find the ways to scale. so right now all three of these innovations i would call exemplary innovations in that they're very small. they haven't scaled. our idea is to get the exemplars to the community, from the 5% to the 95%. one of the things we're doing is working with the clinical for excellence research at stanford. funded some research. they found that 5% of the primary care practices that they survived highest in terms of

quality, lowest in terms of per capita cost by far. a factor of 50%. they visited these exemplary practices and found ten attributes, the essence of the high performance. and our idea is that we need to find that essence and find ways to spread and scale it. there is an old adage that you're limited to publishing. and that's what we found in philanthropy. it's kind of the spray and pray approach. publish and hope that it will sprinkle down on the field. our thinking is that we've got to get out there. we've got to mobilize. we've got to work with all the stakeholders, especially patients. to create the demand necessary to pull through this kind of high performance. and so as we do that as we collaborate, and i really hope that we do collaborate with all three of you, because you have wonderful things. and we find those barriers,

those thresholds, after trying to scale it, then we'll circle back to the policy piece. policy piece is important. but the know-how transfer is more important. >> yeah just on that note, so what we noticed is that when we first launched oscar about 14 months ago, we did a lot of things that had never been done before. for example, one is we give away telemedicine for free, 24/7. so you can speak to a doctor within ten minutes and it costs you zero. the idea for us is if we could just actually understand what our customers need in realtime then we could pinpoint them to the right place and actuarily it would make sense and save them money and save us money. at the time everyone thought we were absolutely mad. but now a lot of insurance companies are starting to do it as well and copy us. and our approach from the get-go, i remember when we submitted our first business plan, which was almost three

years ago to our first investor he said what if people copy you? and the we responded at the time which i think rings true, we hope people do. because finger they do because i think if they do it will make the system better. i think what is elizabeth is doing, a lot of people are starting to be inspired by working in health care. a lot of our peers or engineers always want to go work at the next social application, or whatever it is. and i think a lot of people are starting to realize now in addition to copying the idea of certain functionality, to start focusing on the space as well. >> how do you personally measure success? how do you keep score in what you do? >> for me it's completely about

every single day how many people's lives are better because of what we do. when we -- i mean the first time that i was able to be in one of our wellness centers which is what we call our places where people go to give samples and see a woman who had taken a bus from about 100 miles away to come in to phoenix because she couldn't afford the ability to do a test anywhere else because even though she was insured, her deductibles were too high, and she was pregnant. and she needed to understand certain information about her body. and when we were able to take care of her watching that kind of emotion and watching what that means in the context of one person whose life is now better because of what we did, that's what everything that we do is about.

>> that is pretty consistent with what they said. you don't mind if you get competitors doing what you're doing. that makes the system better. you'll have to get better. you actually believe you can get rid of every single avoidable death in the health system by 2020. and by the way, if you keep increasing performance year-over-year by tenfold, which has now happened twice in a row, i told him a couple of days ago you'll actually get there in september of 2017. but anyway so you basically said the same things. if you were dictator of health care in america and you could do two or three things, what do you think the most important things to do are? if you could change things based on your perspective what would you do? whether you would spend more money, change law, whatever,

what would you personally do if you were in control of what everybody does in the health care for a month? and we'd all have to follow your lead? >> i would unequivocally make it clear that access to health information is a basic human right. and i talk often about the fact that in california today i can buy a gun and i can shoot myself, but i can't order a pregnancy test. it's illegal because somehow that information is too dangerous for me to be able to handle. and until we get to a point in which every person has a human right has the ability to get information about their own body we will not change our health care system. because individual accountability can only start with understanding. i had the chance to do a lot of work in louisiana with some very

sick communities who were heavily obese. and you would listen to people talk about the fact that oh, their quote/unquote lazy. and that was not the case at all. they had no idea what to do to change their health. and if you can empower people with information if you can educate, you take the first step in being able to facilitate that change. today in our country, there are 26 states in which it's legal for a consumer to be able to order lab tests. and all the rest of them, it's not. and to say that by law an individual doesn't have access to that information i think is a symptom of the overall problem in our system. because at the end of the day, it is that individual accountability you were talking about, type 2 diabetes, 80 million americans are prediabetic. 90% of them don't know it. and all you need is a simple

glucose test to be able to tell you. [ applause ] >> and all the conditions are reversible. >> completely. with individual accountability. yeah. >> okay. so what change would you make if you could do -- if you were dictator of health care? >> well, first i would start over completely. >> good answer. >> yeah. i think i would one, just enable people to understand their health. and understand everything that they have access to. i find it amusing at times that, you know a child in africa with a smartphone has more access than you did when you were president of the united states at the turn of the century and more access to information. i don't know how much this is going to cost me when i go into a doctor's office on park avenue, and i don't know why i'm going to that doctor.

so i think enabling the consumer to understand what they have access to and why they should go to one place versus the next is a good place to start. i think there is a structural disadvantage to our system though. because the health care system in the u.s. was primarily built on a b-to-b business. and that doesn't necessarily put the consumer first. when you're selling to companies, you're not selling plans that are right for the consumer always. and i know that there is a lot of people here especially in the audience that are doing their best to change that. but, you know, i think there needs to be just a structural shift that is focusing on what the ultimate -- what the end consumer wants. >> i start off in innovation is best medicine. so what i would do like the

general accounting office, i would create a general innovation office. and before the president or congress does anything i would ask how does that impact innovation. whether it's new patent laws, whether it's new health care laws, how does that impact innovation? because we don't want to impede innovation. secondly, i would look for getting rid of misaligned incentives, such as right now there is a perverse incentive to maker roars in hospitals. it's less now with the affordable care act. but if you're going to get your car a tune-up, and the next day you go to pick it up, and the car has caught on fire they don't ask you to pay for the tune-up. they usually give you a new car. not ask you for the tune-up. but if someone goes in for a hip implant or a tonsillectomy god forbid, one of the ten things that can cause preventible death happens to them then insurance preventative care whoever they still get billed for that initial thing they went in for.

so what if in an instant, unless a hospital has created processes to avoid these preventible causes, we're not going to pay when somebody gets harmed. and imagine for a moment what ceos and cfos of hospitals would do. they would now make sure all the processes are in place there is only ten of them, to make sure people don't get hurt. and there is is more misaligned incentive incentives. like group purchasing organizations getting paid by vendors to negotiate for the best product at the lowest price. but they're getting a percentage of fees by the vendors. so what do they do all the time? they don't negotiate for the best prices and product. aligning misaligned incentives, and making sure we don't lose the innovation edge that our country edge, that the world relies upon. >> i'd empower the patient, and i'm empower communities. we have the technology now to bring information to people

where they can activate and engage in their own health process. we have an expert culture that is not giving up very easily, however there is a sense and this isn't just health care. thing is kind of across the ages where there is this buildup, this vested interest of i have the expertise come to me, i'll take care of you when in fact now we have the technology to bring this expertise out on a decentralized basis. i don't think there is anything more effective in terms of care both from a quality outcome and from a cost outcome than an active engaged patient and surrounded by an active engaged family, surrounded by an active, engaged community. that's where i think we have to go. [ applause ] >> i don't want to end this on a downer, but thing -- i love this stuff.

i could keep you here until tomorrow morning. but i think it would be a mistake for us to conclude this without recognizing that if all this were as easy as all of you highly intelligent deeply committed, incredibly creative people make it sound, we would have done it already. so talk to me about -- this will be very good for all the people that are here. talk to me about at least one frustration you've had in doing what you do. one failure, how you manage it and how do you in your business and how would you recommend us in working on health care what do we most likely to flub up, and how should we deal with it? joe? >> one of my frustrations is

that you come up with a new smartphone. and within six months, everybody has it. you come up with technology that saves lives and reduces costs dramatically to our health care system. it takes 17 years before it gets adopted. there is a problem with that. and i think it stems from this third party mentality, you know. a third party taking care of you, a third party paying for that care. a third party negotiating for things that the hospital should use that they should know what they want. so the frustration is how do you get rid of this 17-year cycle that along the way kills and hurts people? you know today our technology the first one we invented measure through momentum pulse oximetry, over 100 million people are being monitored annually, at minimum three people are being impacted

positively, from saving their eyesight to saving their lives. by the way, that translates to about a half billion savings and yuli to the u.s. another technology we invented non-invasive hemoglobin it could save $5 billion a year. two randomized control trials show it reduces blood transfusion dramatically. mass general just published a study. 90% reduction in blood transfusion. yet it will probably take ten more years before it gets adopted widely. >> so what should we do about that? that's -- i mean -- >> patient advocacy. i like that. >> you're like the little engine that could. you just keep pushing the rock up the hill. that's sort of been my strategy in life. less time you have to foot rocks up the hill, the more you would like a different way. so i'm thinking about that. how can we -- what legal or institutional changes do we need to avoid that? because it would be hard to get

anybody in america to stand on this stage and say i'm for this 17-year time lag. it's the greatest thing since sliced bread. by all means let's wait another ten years and let people die in the meanwhile. i mean it's a hard case to make. but we have lots of systems like that in america. not just that lots of things that no one would ever defend up-front but we all every day shrug our shoulders and live with such things. so you want to go next? >> yeah i might get in trouble for saying this. >> you will. >> god, i hope so. we need somebody to get in trouble here. >> i feel very grateful that i've interacted with some extraordinary people in the health care space. but i think what has been frustrating, but also at the same time motivating and has enabled us to add and bring on some of the best engineers in the world that i've ever worked with is that there is a lot of people in this industry that are

also just evil. and they don't actually care about the patients. so there has been some systems that we have interacted with that are so ecstatic about the idea of working with us and creating a better experience for the people that go to their hospitals or certain physician practices that realize that they can still make a tremendous amount of money, maybe even more, but provide a much better experience. and then there are some who just look us in the eye and say why would we ever change? because we're making really good money, and we don't really care. so, you know it's actually funny. we live in like this idealistic oscar is great world and actually get really excited when we have a meeting with one of these people, because it fires me up for a couple of months. but at the same time, it's just frustrating in a world in which you're providing a service to people where their health is the

primary thing in their lives, that people just don't really care about them as individuals sometimes. so frustrating, but also motivating. >> i think it goes back to empowerment of the individual and the consumer as a way to not have to deal with sometimes the confusion that exists with some of the established entities around something simple like do you want to save money, right? and sometimes these conversations, we can come in we can save you $80 million a year $100 million a year. that should be a very simple conversation especially when you're not asking for anything in return. but the entrenchment is so great that trying to work through those systems trying to work through existing policies in our

mind is harder than empowering the consumer and creating an infrastructure outside of that system, which by definition will make that change because of the way that you're empowering the individual to take ownership, and because of -- for example we started billing at the rates we bill, we published all our prices. so everybody knows how much a lab test is going to cost them before they get a test every single time. that's making a shift in the system by acting outside the system. and we really believe in that as a way to make a change. so we try to spend most of our time focusing on ways in which through individual engagement, we can facilitate that change as opposed to trying to convince the existing system to change. because that could take a really, really long time. >> my biggest frustration is data.

health care is so opaque in terms of performance. and if i had the step that i'd like to see us take is make all data open source. all of it. [ applause ] >> and the idea that it has -- that it's proprietary, i think there are other ways to compete. i mean you go into a grocery store, there are no prices, you go to the cashier and they tell you the bill? i mean, that's how health care is. so what elizabeth is doing i think is groundbreaking. with data i think we can shine a light continually on best performance. and consumers can see what best performance, but so can providers. the primary care exemplars didn't know they were exemplars.

they didn't know. so i think data is the biggest frustration. and that's where i would go. >> i want to tell you why i ask you all these questions. and i spent most of my life trying to change things. i was always making somebody mad. 40 years in there will be life. but i found that the resistance to change that was self-evidently good, like in just the examples you all have cited was often rooted in naked self-interest. that's what you talked about. but also the comfort of the way things are. people find -- a lot of people reach a point in life that they just don't want to think about doing things at a different way. it's the inertia that it builds into society is enormous. and the advantage it gives to the status quo is staggering. just the idea of changing

people's, you know, the boxes within which we arrange reality. it's a real problem. and the third big problem that i found is if you want to make a change that will make things better but that has more moving parts than the way things are, that's really hard. the best example is with energy. you want to build a coal-fired power plant and accelerate climate change, you got to go to one contractor to build the plant, one contractor to supply the coal, one government agency at the state level to approve the building of the plant and the rates. and you're off to the races. somebody else does all the rest of the work. you want to create just as much energy in a much less expensive and more labor intensive way by having massive building retrofits, something try to do, a lot more moving parts. cost you less money. save the environment for our children.

and create a heck of a lot more jobs. i worked, i spent decades -- a long time working in my foundation in the caribbean where they have the highest electric rates in the world. they all ought to be on solar and wind and biomass and geothermal. should it be a 100% clean energy region. but if they buy oil from one purchaser and somebody gets it and then the appropriate political people get their contributions and you have old-fashioned generators, there you go. you're contributing to climate change and you're bankrupting the country. and it would be a lot cheaper to be on totally clean energy. and what way to market a region. it's hard to do because of the moving parts. the reason i'm saying that is because we're coming to the end of this program. and no matter what the policy is whether we get rid of the 17-year time delay, that's why

the world desperately needs people like you. that's why we will always need innovators because brains will always be more attuned to the comfort of the present than the adventure of the future. most people's brains. and yours are. because there will always be more money in the status quo. one reason i admire trevor fetter sitting there atop his little health care giant is that every day he gets up and he is still a little like i've known him for a long time. he is still a liberal reformer he was as a young, young person. and he tries to think of a way to push that thing down the road in the right direction. a lot of people don't do that. we will always need the disruptive innovators. we need you. and so that's sort of off topic, but it's true. and i want to thank you for what you have done with your lives

and urge you to keep going. because for all those other reasons, no heart what you achieve, we will always need somebody to do disrupt whatever is going on. and i thank you for it. [ applause ] >> we have about ten more minutes. you've got people here who are involved in health care across this valley and across the country. a lot of them, like me wonder if they'll ever see the east coast again. and -- go figure. so i want to give -- i want to give you a chance to close out in a totally different way. i want you, the innovators, to ask them to do something. if you could get everybody who

came here committed to developing a wellness model of health care, community by community, what would you ask them to do? go in any order you want. >> well, i -- i think wild data is critical and is king, i think action is king. and i think action that is inspired by love. so i think if we all start loving other people's children the way we love our own, all of the sudden these misaligned incentives and these issues just step out of the way. so i hate to sound like the beatles or whoever but please just give more love to the world. [ applause ] >> my wish would be that every

person here takes just a minute to think about what it means for health to be a basic human right, and a right that every single one of us has, a right that every single person we love has in the context of ultimately being able to change what we know in this world today around having to say goodbye too soon. because if we start to see access to our own health insurance as our human right then we will start to engage with it, and we'll start to become more interested and look through a different lens at understanding it. and then using it to change our lives. we should not be living in a world in which we know more about our credit card data than we do about what the cell blood count on our lab report means. and that starts with recognizing that we have this right, the

right to the health and well-being for those we love, for ourselves is perhaps the most fundamental human right. and when we know that, we'll begin to change our system. [ applause ]system. [ applause ] >> very much in line with what elizabeth just stated. i think what i would ask is as you're developing your businesses, you don't necessarily think about your business as much as the product that you would want for yourself, and i think a fundamental principle of what we've done is we wanted to create the health insurer that our family would use and get access of care that we would want for ourself, and i think that sets the bar at a much, much higher level so i think that's it.

[ applause ] >> i had an old mentor when he heard my dreams he said, so, jeff, what are you going to do on tuesday? i ask you the same question. i think you all have a dream. you all have a vision. you have passion. it's time to execute. what are you going to do on tuesday with that vision? [ applause ] >> well, i'm going to do something off the books. would anyone here like to ask any of them a question? then i'll ask. do you have plans to go beyond the individual market, and how can you get traditional insurance companies to adopt some of your changes? can you -- when will you have enough data on this to prove

that what you're doing works? there are insurance companies that are trying to promote wellness now and they really do recognize that they can keep rates down now that there's no cost shifting, that they have to eat and -- or there's less anyway, how do you think we can move from what is only 10% of the insurable americans in the individual markets to the other 90% with your model? what do you think -- when can that begin to happen in earnest? >> so first, we're expanding to additional states next year hopefully. california and texas and we'll also expand into the group market at some appointment. it's not the top priority at the moment, but we didn't start the company because we wanted to

provide insurance individuals and we wanted a better type of insurance for everyone. that will happen at some point. in terms of data on what we're doing there's a tremendous amount of engagement. some of which we shared publicly, which is 835% of people have given us access to all their previous medical health records. 90% of people have filled out detailed health risk assessments. we have a large cohort of users speaking to us through telemedicine telemedicine, and mlrs for the health insurance nerds in the room pretty much went above the lowest in the state on the individual market, and i think we're, you know, one of the only insurers that asked to drop

prices after the initial year so, you know, we're actively doing our best to kind of continue to introduce new products, see if they succeed or fail, and then hopefully drive our costs lower so we can reach as many people as possible. while we have had a tremendous amount of success to date, we'll introduce things over the next years that don't work. if we don't. we're not trying to innovate enough. in terms of working with other insurers and hospital systems, we're starting to have those conversations to get our products to as much people as possible. >> it is important to record what does and doesn't work. everyone will follow this. there's enough action in insurance business now that everyone will start looking at this. it is very interesting the --

joe's conference on preventable death, there was a lot of talk about how troubling it is when people don't have access to their own records on everything and how we could clearly store them securely and make them available to individuals and their designated providers people they approve it to. this is a huge issue. it's the next big thing you know it was kind of touching, almost, the government made an effort last year almost a year ago now to publish the first comparative data on you know medicare and medicaid and there's a lot that they didn't have. you know, in terms of what the results were in different health care providers, and pennsylvania is the only state that -- at

least was the first state that started regularly reporting the impact of what did things cost and what were the results and hospitals throughout the commonwealth of pennsylvania, and they, every year found out that there's no connection between price and quality. the only connection with quality is how many times do you do it, whatever it is. but still, we're just -- we're almost in the stone age in real access to data. and empowerment. that's what i heard in different ways from all of you today. that i -- it's maybe a imagine we ought to send out there that it only hurts for a little while when you practice transparency and pretty soon you can't believe you didn't do it. you're stunned how long it took to get around to it. everywhere i work in the world

where things are transparent, they are working well. where they are not, it's not so hot. i just went back to indonesia ten years after the tsunami, recognizable, the first global disaster that i believe was ever conducted with virtually 100% transparency. where did the money come from? where did it go? who got it? what did they did with it? you can get it all on the internet from start to finish everything should be done like that. but it's an upnrecognizable place now. that's the thing i wanted to -- that, you know i got that from all of you in different ways, but if you really want a patient citizen centered health system you got to be able to get the information. >> one of the first things that we did at the peterson center on health care was to go into a partnership with a kyser family

foundation to create what we call the peterson-kiezer health system tracker. we track what's driving the spend, and the numerator is what's spend? mori it willty by condition compared to other higher countries, over time and we hope others join with us we want to find those whole system measures that are really meaningful, and our thinking is the old adage you don't manage what you don't measure. we need it not just a micro level but a macro level as well. >> if i may, president clinton imagine what the internet would be like if people did not share data or have interoperate

interoperateability, but when it comes to our lives, we have disconnected products out there. there's a story of someone going to the doctor's office thinking they have the stomach flu, go to the emergency room thinking it's the flu, but the white blood cell counts were high, heart rate is high. the clinicians did not connect the dots. could you imagine if all these equipments that made the information would feed into somewhere where someone could create algorithms to see the pattern, you could save so many lives, and all of us could benefit, and whether some kid in pal palo alto comes up with the algorithm or ge does it that's not the point. it will save so many people's lives, and the rest of the industry will benefit from it. >> thank you. we have to wrap this session up. i do want to say the governor of kepz has come here.

he's a great friend of mine. he and the governor of arkansas were the only two on election day in november with approval ratings of 70% or more and voters voted against everything they did. but they loved them for it because no one onces how health care works, health care economics, policies and you ought to get it if you talk about it a little bit, but it will encourage you to skrit what they suggest. the only way to get level of knowledge about the health care system on a general citizenry is to empower them first to do something they can understand, which is their health, the family's, the family's health, what they pay for it what they get, how they're going to do this, and