captioning performed by vitac american export-porterexporters. but at our core, we're about u.s. jobs. these are private sector jobs, the fruit of free enterprise, evidence of america's ability to compete in the global marketplace. and we measure our success not just by the numbers of jobs but by the family made stronger by each of them. how will america keep writing those stories in the coming age? we have talked about the exploration ahead of us. we know that export jobs pay up to 18% more making that progress real for more american

families. and we also know that as demand grows for each sale whether fire trucks or ice cream, the jobs either come to america or they go some place else. it is a zero sum gain. that's the choice being made. and it is a fact some politicians seem to ignore. and who feels the impact most of all? small businesses and they make up about 90% of the exim customer base. more and more small businesses are making exporting a part of their dna. they know the opportunity is out there. but many of them don't have access to the financing they need to compete globally. exim provides that access when there is a gap in the private sector. people like the darlings they are not well connected. they're not crony capitalists. they're not interested in handouts. they pay for their financing.

and like all of our customers, they're entrepreneurs, they're innovators who want to make more american made goods and export them to the world. gabriela jeda is one of those entrepreneurs, born in mexico city. we met last summer in mesquite texas. he runs a small concrete additive business out of a modest warehouse east of texas with his wife jane and their son david. and in fact gabrielle and jane would be here today, but they're celebrating his 60th birthday in spain and they have planned this trip about six months ago. their company is called fritz pack. and they manufacture 40 different specialty products like plasters, the kinds of things you'll find in swimming pools and sports arenas. so if you've gone to a cowboys game or colts game, you've seen their handiwork. gabrielle epitomizes the american dream, but just as he's preparing to move into a new

facility, the great recession hit. gabrielle was forced to lay off three of his 14 employees. people who are like family to him. he even contemplated selling off the business. but then gabrielle and david came up with the idea of going global. but when your typical sale is $10,000 or $12,000 your local bank isn't always interested in financing you. and that's the problem they ran into. so when private financing proved unavailable, they turned to exim for reliable insurance package to protect their overseas sales. the result, exports now account for 35% of their business. and now it is not just the nfl. it is world cup stadiums in brazil, the olympic stadiums in vancouver. and the best part, that export

growth allowed gabriel to rehire those three laid off employees delvin, pam and andre. they're back in the fritz pack family, they're earning a paycheck and creating more great exports. it is a testament to the obama administration, the ground work we laid, coupled with the hard work and ingenuity of american private sector that we have added 12 million jobs in the last five years. and we landed almost 600,000 since january alone. and at exim we're proud to have done our part by supporting 164,000 jobs last year alone. i used to run a family business. and, in fact my mother -- my mother and my brother david are here sitting right up front. so i know firsthand the jobs are more than just a number. but as a country we often don't talk about what those jobs mean

on a personal level to our friends and family. and hard working americans like delvin, pam and andre. lost in those numbers is what a job really means for the person who has one. having a good job is a tremendous source of pride and self-esteem. it brings added meaning and purpose to your life. it is a part of your identity. how often are we all asked what do you do where do you work? and that's to say nothing about what a job means to our financial security. being able to provide and protect your family is one of the most fundamental of human needs. a good job makes it easier to pay the mortgage, buy groceries or pay the tuition to send your kid to college. it makes your family stronger your neighborhood brighter and your local economy more

resilient. fritz pack is one example of what we strive to make possible at exim. but even though the u.s. added jobs at a historic rate, there are still too many americans where meaningful work and good paying jobs is out of reach. u.s. small businesses still struggle to secure competitive financing. and china and other challenges are still doing whatever they can to beat american companies in the global markets. now, i know if you've just finished breakfast, but let's not ignore the fact that our competitors are trying to eat your lunch. that's what's happening today. and with all that happening today, i want to close by talking about tomorrow. and when i say today and tomorrow, i'm not just talking about this conference. although i do hope that you will engage with our speakers and panels meet each other strike up a deal or two, we have buyers

here from more than three dozen countries. but what i'm talking about is how we as a country succeed in tomorrow's economy. and what is required to succeed in tomorrow's economy, good paying jobs global leadership, resilient small businesses, all made stronger by exim. the years ahead are critical. whole economies will succeed or stagnate based on their ability to reach customers beyond their borders. and while exim created more than 8 year 80 years ago we were not built for the needs of yesterday. we were built for the needs of tomorrow. for all that america has accomplished we still face the same choice over and over again. the same choice faced by teddy roosevelt, the same choice we face today the same choice we'll face tomorrow. and that choice is whether we

will continue to climb back into the arena. it is a choice about whether or not we're going to show up. there is a struggle ahead of us for the durable economic foundation for global leadership. for the countless jobs that are up for grabs. but we have to keep entering the arena. we have to show up. and at exim, we're proud of our past supporting more than 1.3 million u.s. jobs since 2009 and generating a surplus of nearly $7 billion for taxpayers over the last two decades. but we also know that american businesses and workers are counting on us to be alongside them tomorrow. so we're going to keep fighting every single day to reduce risk unleash opportunity for small businesses, for job seekers, and the entrepreneurs who count on us for certainty and support.

it is a fight we look forward to. and it is one that america can and must win. thank you, and enjoy the conference. [ applause ] senate majority leader mitch mcconnell said he opposes reauthorizing the export import bank but will allow a senate vote. the charter expires on june 30th of this year. coming up in under an hour, health and human services secretary sylvia burwell will testify on her department's 2016 budget request. she'll also likely get questions on health care, medicaid and medicare, our live coverage begins at 10:00 a.m. eastern. and the senate comes in this morning at 9:30 eastern, taking up the nomination of loretta lynch to be attorney general. a vote to move ahead with her nomination is scheduled before noon with the final confirmation vote likely this afternoon. live coverage, of course of the senate is on c-span2.

earlier this month, former house majority leader eric cantor and kathleen sebelius outlined the current health care landscape. they talked about the health care law and its impact on available public health services, technology and reforms to hospital care. new york university hosted the event. >> good evening, everyone. i'm michael ulrich, director of nyu washington d.c. and i'm very happy to welcome you to the abramson family auditorium. tonight we are honored to host the third annual weissberg forum for the discourse in the public square. which provides a locatous at nyu dc for thoughtful and respectful discussion of controversial contemporary topics and issues. special thanks to nina weissberg and the weissberg foundation

for their generous support of this program. we're grateful for the support institute of public health. the institute is working to arm the next generation of global public health pioneers with the critical thinking skills, acumen and entrepreneurial approaches necessary to help solve the world's most pressings public health problems. please join me to welcome dr. cheryl healton, dean of global public health and director of the nyu global institute of public health, who will introduce our topic and special guests. [ applause ] >> thank you, michael, for that kind introduction. good evening, everyone. i am delighted to welcome you to this installment our weissberg forum on discourse in the public square co-sponsored by nyu-d.c. and nyu global institute of public health. thank you, nina for the support of the weissberg family for this important event. if the goal of our forum is to explore elements of a law which americans sharply disagree, the affordable care act, it is a true case in point. last month, the kaiser family

foundation reported the narrowest margin of difference yet with 43% unfavorable towards aca and 14% in support of it. one thing about which we can all agree is the situation that prevailed before the passage of the aca was not a good one. over 70 million americans lacked health care coverage and millions more were underinsured and had little access to prevention services. tonight's discussion will help us all better understand the nuances of this intensely debated act but first, this complicated law deserves a very brief health reform 101. for that i turn to my long-time friend, joseph a. califano, former secretary of health, education and welfare under president carter and previously president johnson's chief domestics policy adviser. joe tells illuminating story which i recount here, one can be told in four distinct chapters, cliff notes short version of a winding tale about health care access to all americans. chapter one, the years before

world war ii. during which health insurance itself was actually quite rare. following the second world war unions and some large employers began covering health insurance for union members and employers. chapter, two, president truman was the first president to make a truly concerted effort to pass coverage for the older americans and for the poor but it was swiftly defeated as socialized medicine. he had to settle for a few amendments to the social security act. the mills act in 1960 covered poor people and older people but while it was meant for the rural poor, the dollars allocated with consumed by high population states like california, massachusetts, new york, leaving its sponsors quite disenchanted. from the time of president truman's first effort forward, medicaid and medicare was part of the democratic platform, but it yielded nothing in terms of legislation. then chapter three, when president johnson was elected or appointed soon after the death of president kennedy, he told mr. califano, we will fight for

medicare for as long as we have breath in our bodies. using failure of the mills act and other issues surrounding the lack of coverage for americans, they were able to pass medicare and medicaid linked to welfare system. under medicare part b, doctors were protected from socialized medicine. allowed them to be compensated for usual fees. they were represented by american medical association, a group that did then and still does not -- and still does oppose quote, socialized medicine. president johnson traveled to independence, missouri, the birthplace of truman's wife bess to sign the bill into law after which bess and harry truman were ceremoniously given first two medicare cards. the recent part d expansion of medicare protected the pharmaceutical industry. some contend that aca protects health care industry skirting efficient approach to insure the nation or medicare or single-payer approach. finally we're now at chapter four, which raises the question,

did the path we set for ourselves then result in a series of bonanzas? first bonanza for doctors and hospitals. secondly a bonanza for the pharmaceutical industry and third now for the insurance industry itself. or was it as others might argue, just the american way? here we are tonight, having traveled a long circuitous route to universal access to health coverage, something enjoyed by citizens of over other developed country in the world. we now stand at crossroads with a pivotal supreme court decision anticipated on king versus burwell in late june and election on horizon in november, will we stay the course, if we don't, what are the implications? for that discussion we've turned first to two people who may arguably know more about the aca than most people on the planet. first i'd like to welcome secretary kathleen sebelius who served as the 21st u.s.

secretary of health and human services from 2009 through 2013. she also served as governor of kansas from 2003 through 2009. secretary sebelius is staunch supporter of the aca. we're honored to have her with us tonight. we're privileged to have with us former house majority leader eric cantor. he served the 7th congressional district of the senate of virginia in the u.s. house of representatives from 2001 through 2014. congressman cantor has been a strong voice in opposition to the aca. on a sad note, congressman cantor's father, eddie cantor, passed away just over a week ago. congressman, all of us here convey our heartfelt condolences to you and your family. finally, it will take a strong moderator to guide this discussion. professor steve mcmahon is perfectly suited to this challenge. steve is an attorney and co-founder of purple strategies llc. he got his start in politics on the senate and political staff of edward m. kennedy and has worked on dozens of senate,

gubernatorial and mayoral campaigns across the country. steve served in senior roles in three presidential campaigns including including that of president obama. steve appears regularly as political commentator on msnbc hard ball with chris matthews and andrea mitchell reports. during the past three campaign seasons he was a frequent commentator on nbc evening news, "abc world news tonight," the "today" show and cnn and fox news. please join me in a warm nyu welcome for steve mcmahon, secretary sebelius and congressman cantor. [ applause ] >> madam secretary, mr. leader, on behalf of nyu, i actually teach here, american public opinions. too bad those of you who are students aren't going to be here next semester because that's when i teach. thanks very much for coming. the course that i teach has a lot to do with politics and public opinion and moving and

shaping of how public opinion flows. and there's nothing probably more controversial in politics over the past five or so years than the aca, beginning with the path to passage and then of course the past five years of implementation. so i wanted to sort of start with a notion that president obama came into office with, which was, this notion that democrats and republicans could work together on matters of great importance to the country. and i think, early on in the administration, there was contentiousness around, there certainly was contentiousness around the stimulus bill. the next big thing on the agenda was the aca, which took quite a while to negotiate and pass. so i wanted to ask both of you, was that, was that dream or that vision of bipartisanship something that really wasn't possible in washington in the political environment today? either one of you can start. i would like both of you to address it.

democrats were, sometimes frustrated that the president took so long trying to get republican support or some republican support. and, it seemed, it seemed, that it might be possible for a period of time but then, it was passed on a very partisan party-line vote. so, mr. leader, if i could, start with you, was it possible or is it possible in washington today to get something like this put together and passed on a bipartisan basis? >> well, steve, first of all, i would say yes but, unfortunately that did not happen in the case of the aca. as you rightfully suggest we were in a context back in 2009 where the president had just got elected. obviously historic election. nation's first black president. he came in after the country had just experienced a horrific jolt in the financial markets and as you suggest, we passed the

stimulus bill which also was not a bipartisan affair. and, for a variety of reasons, if you want to get into that. there was, certainly, i think a commitment by all of us to want to try and address and to improve the situation of health care in america. and you know, i would like to start any discussion with about health care in this country. and i know the secretary, you know, spent a lot of her time and years in trying to make sure that the system that we have here, despite what some of the international numbers say, oecd rankings and rest, i would still contend that no matter where you live in the world, if you can afford it, you will come to the united states for health care, if you're sick. and that's, the condition though is if you can afford it.

so when the president first started his discussion with us on the hill back in '09, i remember, that he had convened a session, i know secretary was probably there at white house. we were there and the premise was, we needed to do something about the cost of health care. and, the cost, because the government, being in the largest payor, of health care, couldn't afford it. the taxpayers couldn't afford it, and businesses where most people outside of government programs get their health care through employer plans, they were also saying, that it was becoming too expensive. and it was that premise that i think brought us all together. i think what happened later, as we got into the spring months that year and in june, you know, there was a divergence, if you will, and instead of that becoming priority lowering cost to increase access, it was almost in my opinion a sole focus how do we guaranty universal coverage no matter what the cost.

i know that wouldn't necessarily the view shared by the white house. but from what the kind of input we wanted to have, it was just, unfortunately, not integrated into what happened, which resulted in the aca passing the way it did. so. a little context. >> secretary? >> well, probably won't come as a great shock, i know it won't to the former leader that i was slightly different perspective on those early months, but i do want to start with a moment of personal privilege. we have two great health leaders here. one, sherry gleed who is now the dean of the public policy school at nyu but served with me as head of one of our great agencies, kind of a thinktank at hhs. and peggy hamburg, who just stepped down as fda commissioner, who i had the great privilege of working with for five and a half years. i just wanted to give them a shoutout. but i would go back a little bit

further than where leader cantor started with, the president talked about universal health care on the campaign trail. it's one of the things that he committed to from the moment he announced for office. he said the next president of the united states should be a president who is able to sign a universal health care bill in the first term. so this wasn't a surprise. he campaigned about it all over the country. and i would say that the aca really had three goals and they were talked about a lot. one was insurance for the portion of the marketplace -- it really was a slice of the marketplace who were either uninsured entirely, or, did not have affordable coverage in their work place. most americans who worked for government or for big jobs or were poor, or were old had health care. but a slice of the market did not. so access for those folks, and affordable access.

secondly as leader cantor said, it was definitely a cost control because, and in the united states, and, i will compare us to other developed countries, we spend two and a half times per capita what anybody spends and our health results are pretty lousy. we have great care for some of the people some of the time, as terms of great care for everybody all the time, we're not getting a very good bang for our buck. so that was, i think, number two, not only better care but also lower costs. and i would say as a third was a real opportunity for the first time to focus on delivery system reform. and what is it that we could do for population health. how do we get people in the united states to change the pattern of living sicker and dying younger than most of our competitors. you know, the aca had five

different committees writing bills, having hearings, three in the house, two in the senate. lots of hours of testimony. lots of amendments. i think the hope was that it would be a piece of bipartisan legislation. amendment after amendment after amendment was adopted in hopes that this would bring people together and, i think, the president was frustrated. i know a lot of us who spent a lot of time on the hill testifying, working with individual members were frustrated that at the end of the day it became a very partisan issue and was passed with a partisan majority. and had a lot of near-death experiences, not least of which was when scott brown was elected to fill teddy kennedy's seat, the 60th vote in the senate was gone. at that point it really looked like nothing was going to pass. but i would add one other piece

to that scenario, you know, the president said in 2009, you can't fix the economy without fixing health care. and in spite of a lot of internal pressures in the white house, a lot of senior advisers who said do something else, do anything else, pass a bill that insures 20 of your favorite children. pick three older people who you really like, get them insurance. get out of this space because it is too, as we heard earlier, 70 years of contentious debate, tried and failed, over and over again. lots of people felt this was the wrong time and the wrong place. i think he was prescient. we now have, unlike the economy he was looking at in '09, the stock market has doubled. we have strongest month in month

out job growth we've seen in decades. we have consumer confidence back. the american economy is thriving and, health inflation is the lowest it has been in 50 years. so, i would say, putting the bet on even that very contentious process, was a good bet to make. >> so, here's a question. was it partisan because of partisanship, or was it partisan because of principled point of view that people had that they disagreed on? so, for instance, when you look at what the republicans have recently proposed, the hatch bill in the senate, many of the elements of the hatch bill include things that are in the aca. yet republicans seem to want to repeal the aca and vote pretty routinely to do that but they embrace many of the elements of the aca. which of the elements of the aca, mr. leader is there broad agreement on? which of the elements of the aca do you feel and republican feel like need to be fixed or

changed? to be sure you don't think i'm going easy on the secretary, there must be some things in the president's bill if you were going back and doing it over you would do differently or improve or change now. if you could after the leader provides an answer, if you could address that, that would be great. >> you know, i mentioned in the beginning some of the, the substantive or the policies differences that began to diverge or to come about and it started with this notion of cost being the priority. and, i think that is derived from basic policy differences. you know, you never can divorce the policy all the way from the politics in this town. but i will say the basic policy difference, started with the notion that the government compels you to do something, and in order for that to be the case, the government needs to define what compliance with that mandate is. that's where the fundamental difference starts, with,

republican position and the democratic position. and it is about the mandates. it is about the, the insistence that washington knew best. what kind of health care, and what kind of minimum mandated benefits had to be present in people's plans. you know, this goes back to the proverbial situation where, you know, i remember i had a constituent, probably in his 60s, he was single. he had written in saying he had gotten one of the letters that his insurance coverage was being cancelled because of the aca. he found out what it would cost to get the new coverage with obamacare in place. and he said, wait a minute. why do i have to pay that? why do i need fertility coverage? at age 61, when he is single. and, again that just points out the case that, when you move towards defining what compliance

was with the mandate, it was a real problem. i think fundamentally there is a real issue with where republicans are and rejecting what the aca premise was and where the democrats are. now you say, what is in there that the republicans would support? i have always said i don't think anybody should tolerate the rejection of insurance coverage to someone who has a preexisting condition. we just had a different way of going about addressing that issue. and there were high-risk pools, reinsurance funds, set up at state levels, if they were adequately funded, could play the part, if you will the reason why there was a mandate. the reason why i think, some of the reason why i think there is mandate in the obamacare bill, was that you didn't want people running naked with no insurance and then all of a sudden coming

in, swooping in and getting insurance. so it would mess up the actuarial tables. >> don't though two things go together. if you cover anybody without discrimination with respect to a pre-existing condition, don't you have to require the younger healthier people, the folks running naked as you say, to get into the system? >> i don't think you have to have the mandates. this is where king v. burrwell will be very, the decision that the supreme court comes down with, if the court overturns the subsidies, in states where there isn't a state-sponsored exchange, then the two sides are going to have to work with one another if there's going to be some resolution here. and i think that it is fair to say, republicans are not going to accept a mandate. you know, as you can tell now, and secretary spoke about some of the attributes of health care costs and, you know, listen, it's early. health care costs some would attribute the fact they haven't gone up because we have not had the kind of economic growth we

would like to have in this country. we still have projections of growth at 2.3% by cbo, historically since world war ii it has been 3.2% growth. so i'm not so sure right away we can say it's aca that brought about all these savings. but i would say, if the two parties are going to come together, the one thing that the republicans are going to say, they're not going to be for a mandate. we don't even have the mandates in effect now. i mean honestly, you have a light enforcement of some of the employer mandates or some of the individual mandates. you have employer mandate for the mid-sized companies, if you will for 50 to 100 employees. that's put off until next year. because of that the individual mandate is lightly enforced. these provisions are sort of vegetables while the dessert was the coverage of the kids who were 26 and under on your parents plan, the pre-existing coverage, the kinds of things

that i think both sides will support. there will be, again, depending where the supreme court says, an opportunity for the sides to say okay, we're not getting everything we want but we've got to start over. >> so what about some of the vegetables he refers to? do you just need to eat our vegetables or is there something we can do here? >> i think, again, vegetables came from the heritage foundation which is hardly a liberal group. the mandate issue was a long-time republican concept. it was in governor romney's bill in massachusetts. and it was there for a very specific reason. i hate to sound too much like a geek but i spent eight years as an insurance commissioner regulating in the insurance market. what i know from watching state after state after state is, if you pass a bill like new jersey did, like washington state did, like a variety of states did which has community rating, no preexisting condition, no

differentiation in price based on health conditions and you don't have a balanced risk pool, rates are unaffordable. in fact in washington state, which is one of the first to do it, insurers left the market. they said, fine. for two years they literally had no insurance coverage for small business owners and for individuals. so it really does tie together. if you want to get rid of preexisting condition coverage, which i would agree everyone says they're for. unless you want a single payer plan, if you want the private insurance industry to survive, you have to tie that to a balanced risk pool. everybody in. some people will get sick. some people won't. i find that the story about the gentleman who didn't want maternity coverage or fertility coverage, my guess is his drug plan still has viagra, i guess he didn't get out of it entirely.

but if you don't want gender rating, which was legal up until the affordable care act, which meant that women in this market, again we're talking about a small market now, if we were work in big employer, if you work for government, we always had a situation where there is package of benefits, you take the package of benefits. you can pick and choose but nobody said, okay, i'm young and single, i don't want maternity coverage. you have it. that means that women are charged more than men. and, women in this market, up until the affordable care act was passed could be charged 50% more than men. and, many plans didn't cover maternity coverage at all. so women were literally not only paying more, but then paying out-of-pocket for coverage that they needed. insurance is again about benefits that some people will use and some people won't but if you again, don't believe that gender rating is something that insurance companies should be allowed to do, and many people say, we're against that, then you have to have a package of

benefits that applies to everyone. this is hardly the perfect bill. i would be the first to admit it. as i say was drafted by five committees. it was, we, had a snapshot of what the perfect bill could look like. >> not talking about romneycare, are you? >> i am not. that was a great template. done at the state level but once the house and senate passed bills, there was a period of negotiations between the house and the senate bill. that the president actually was at the table with the sleeves rolled up, leaders were there and went through every aspect of the bill, there were different approaches. when the massachusetts senate seat was lost, you then had to retreat to reconciliation, which is a procedure that only allows some things to be considered and others not, and i think at the end of the day, there are a lot of things that have to be fixed.

the individual mandate did go into effect this year for taxes. it was fully in effect the way exactly, it was written. the employer mandate will kick in, but frankly for employers, folks, who have 50 or less employees, are exempted from the law anyway. that is the way it was written. that is about 94% of the employers in this country. for those who have more than 50 employers, i mean employees, they are in but most of them offer health insurance anyway. so, things around the administrative burden, how to balance what the packages are, of benefits, right now, every state has the state mandates that they have passed that include that their benefit package. that probably doesn't make a lot of sense. we have probably the biggest

harm right now, there are lots of millions of people in america who are too poor to afford health insurance because they are in a state that didn't expand medicaid, and the way that the supreme court determined the medicaid decision, we have now millions of people in the country who literally don't qualify for anything and are kind of in a "catch-22." so i think there are a lot of opportunities to work together. lots of exciting things, i hope to get in the private area, employers, insurers and payers and others that we need to have move away as fast as possible from fee for service into a value-based proposition. there is a lot of exciting work underway and a lot of agreement. i just hope at some point we stop and i would agree we've got one additional supreme court case, maybe once this is decided

we can stop relitigating the past and move to the future. >> you mentioned the supreme court case and i want to get to in a minute the bending of the cost curve which seems to be occurring already maybe as a result of obamacare and maybe things as the leader mentioned. could you give the audience and in particular the students a quinn summary what do you think might happen if the supreme court comes in and says you can't have these exchanges funded the way they're funded. >> it's four words, established by the state. those are the keywords and the plaintiffs have put forward an argument that suggests only states that set up their own health exchanges are entitled to subsidies for those constituents. and that would be 17 states.

so in 34 states if the plaintiff prevail in this case, the subsidies, which make insurance affordable for now about 8 million people who have signed up for coverage would cease to exist. but that's just step one. the subsidies would go away. the affordable care act also has a provision in it if you fall below a certain level, if insurance is still not affordable, even with the subsidy, there is no requirement that you purchase insurance. for instance, in a state that has an expanded medicaid who are at poverty level don't have to buy insurance in the private market. if you take away the subsidy, you perhaps have an additional 68% of the people who suddenly have insurance and they drop out of the market entirely. insurance companies meanwhile,

have assigned risk pools based on new customers, projected rates based on the customers but they would have existing customers who stay in the marketplace, lots of people purchasing individual coverage who are not on the market, and suddenly their rates would skyrocket. you would have a domino effect of not only for the individuals losing coverage but everyone else who is in that individual market in that state would suddenly be jeopardized. and i would suggest some private insurance companies would see their portfolios in grave jeopardy pretty quickly. i would say having been there for not only all the debate, all the testimony, all the hearing, but led the implementation, there was never a conversation, suggestion, testimony, amendment, discussion, either during the passage of the bill or certainly any regulation that we ever wrote any conversation that i had with my former

colleagues, governors around the country that said, oh, by the way if you don't set up your own exchange, your citizens won't have coverage. and i think it is a -- it's difficult to read what is a national framework, a national law, national mandates, national coverage and say this is the intent but that's what the plaintiff suggest. >> so leader, 34 states don't have, they have not established their own exchanges or they don't operate their own exchanges. so if what the secretary is suggesting is correct, if the supreme court ruled that this funding mechanism was not constitutional, doesn't that put extraordinary pressure on the governors of those states, most of whom are republicans? what is it you think would be the reaction, and how would washington come together, or not, to solve this problem, how could it? >> that will be, i mean, as the secretary said maybe this will be the last court case or court

challenge because if the court comes down the side against the proponents of the law, then we will see whether the administration will come together and work with republicans on the hill, or if not, are they going to go around and try and work with the governors and the legislatures of the states because they will have to then i assume comply with a holding by the court which would say that they have to establish an exchange. and so it could very well put pressure there as well. but i think, take a step back. we had this medicaid decision as the secretary points out that was not consistent with what the president and the administration wanted that to happen as well. so you've seen a lot of state. i know minep in virginia has not expanded medicaid. and if you look at the numbers under the aca, at least i think

if, secretary, i'm correct, half of the participants now, under the aca are medicaid participants. and i know in talking to a lot of the provider community, very difficult for providers to stay in business, for doctors to stay in business at medicaid reimbursement rates. there needs to be some realization there that that's not a sustainable situation either. so look, if the court comes down and says, and i think what you will see is a real unraveling of this law the way the secretary said, that if there's no longer affordable insurance plan for a lot of people, millions, they will go without as well as insurance companies are going to be facing a very daunting situation in some instances. so that goes back to where it -- where can you head? i said earlier the republicans in my opinion are not going to support a mandate. the secretary talked about if you're going to have community ratings, if you're going to have the kinds of constructive law that obamacare is, then, yes, that's why you need a mandate.

but that's where the republicans are not coming from. they are not saying that you need to go and establish these bands of ratings -- >> if you get rid of pre-existing conditions, you need a rating. >> but what i'm saying is, that construct of the law right now is there's a severe inflation in cost because of mandated benefits that washington has decided needs to be in these plans. secretary says now, well, the states on top of that have their mandated benefits. that's a problem. it increases costs, that's the problem. you can watch the mandated. we have to work on that. and there are -- i hope we can get to the kind of things that are trending now in the health care marketplace. cms just recently came out and said that we want quality-based payments. we want to have these bundled payments.

those are the kinds of things i think everyone is for. the sgs patch or fix went in that direction. >> you took my next question which was a rare but hopeful example of a bipartisan deal, the sga, the fix, that medicare reimbursement rates and it also changed the way health care is provided in a meaningful way in terms of incentives and reimbursement. correct? >> the sustainable growth rate, the sga is really about doctor pay, but there are features in the house passed bill as you know the senate has not tested. they will deal with it when they come back and we hope it will be a rare bipartisan triumph, but it does contain a lot of elements that repeat actually framework that comes directly out of the affordable care act, around a delivery system reform, moving to a value-based payment, picking up accelerated issues that cms has put on the table.

but this is, again, the framework that the law actually jump started in 2010. it's been very much under way. i always say, steve, there's lots of people -- a lot of the attention, i would say 90% of the attention of the press and everybody else has been on the marketplace or medicaid expansion. that's a slice of the market. but it's like watching synchronized swimming and only paying attention to the bathing caps because there's a lot going on underneath the water. underneath the water affects all of us. it's what kind of care you get in the hospital. it's how providers are reimbursed. it's for the first time having electronic records that was a bill prior to the affordable care act part of the recovery act. but can you imagine a 3 trillion dollar industry which as recently as 2008 was exchanging most information on paper files. couldn't measure it, couldn't see it, couldn't tell what was

going on. has dramatically changed. so there is an unlocking i would say of innovation and ingenuity and private sector technology coming to jump start issues around efficiencies in health care and medicare and better patient care that we have never seen before. but the framework really was this administration has to jump the affordable care act which is set for the first time, gave cms, the centers for medicare and medicaid services who spend $1 trillion a year on health care. so a third of the spend is out of the public sector plans. finally said we're going to use that public sector leverage to align outcomes with what's going on. and said to cms, and this is in the law, if there are protocols found to lower costs and improve

quality, you can take them to scale through administrative work. you don't have to run a demo project, evaluate it, come back to congress to increase it. it is now in the law. that's a huge sea change, and private employers and others are thrilled because they've been trying to do this for a long time but medicare has a big stick in the marketplace and was stuck in fee-for-service as recently as 2011, zero percent of medicare payments, last year which was $585 billion, give or take a billion zero percent were in any kind of value-based payment. and cms is committed to having that 50% by 2018. it's now at 30. it's going to go to 40 and it will be at 50. that is an enormous change in the way financial incentives can align with outcomes. and will make a huge difference to everybody.

>> leader, you're now in the private sector and venture capital. what is the most exciting thing you're seeing out there when you look to the future what's happening with efficiencies and improved outcomes as a result of the things the secretary just mentioned? >> right now i'm vice chairman of mull ifrmtss and company, an investment bank. we have a fairly robust health care practice and what we are seeing is, there's a lot of increased focus of attention on a lot of providers. you're seeing a lot of private equity interest in coming in to the space. you are also seeing big players looking at -- and there's a lot of press reports about big acquisitions and mergers and consolidations. and i think that's a direct result of what the secretary referred to about the move

toward quality based payment systems. in other words, payment systems that are real outcome-based where the different providers surrounding a patient's care are now all assuming a piece of the risk, and it's not just a fee for service anymore. and it is really making sense. i read this article in "the new york times," i think like last week. it was the company that has just started that basically is a primary care company and they get almost like a capitated payment per patient. and that's all they get and they have to figure out how to best produce an outcome. and there is no coding. you don't have the providers or the back office sitting there try to figure out what it is, what procedure, et cetera. they give an example of one of these primary care providers and they have a lot of health coaches that help the physicians.

they figured out that this woman who had diabetes was unable to take her pill. and that was the problem. and if that was not caught, then she would have gone into a hospital and incurred all the additional expenses. so it's just a little bit of a common sense factor as well. so you are seeing capital flow in. you are seeing, in the pharma space -- i know peggy is here, the incredible piece of our health care system i think -- one of the most incredible, is the innovation. some would say that is also does contribute to the cost. and again if you look back at those rankings which always don't sit well with me because we are different in this country. we're different on how we treat the start of life in neonatal care and what counts as live birth versus what doesn't versus other countries. in the same way we value life at the end of the spectrum as well

which, you know, causes some contentiousness in the debate. but i believe that's a good thing that we value life like that. but we also are the leaders on innovation and the first to adapt the innovative measures are the first to pay. and so when you look at the incredible amount of capital going in to biotech and all of this, all of the new type of medicines that are out there that are tailored to the disease and the person, just phenomenal. i, went i served, was always very free focused on seeing that the government place a proper role in funding basic research. because there can be such leverage, not only from saving lives, helping cure disease, it also does help your budget. if you cure a disease, you are not going to have the kind of outlays that you did. so it just makes sense to me. so there's a lot of interest obviously in the private capital

flowing into some of what has been created because of the nih and the nsf. >> when you think about the innovation of medicine and the advances of medicine, personalized medicine, personalized for the individual and the disease, it sounds expensive. and my question is how are the providers and payors reconciling that? it seems like the pharmaceutical industry which is inventing and bring a lot of these to market is fighting with the insurance industry more and more. how is that going to sort itself out over time? >> well, we have a different system in this country than anybody in terms of drug pricing. we -- in the united states, medicare is prohibited by law from negotiating for drug prices. medicaid can. governors could. i could negotiate and i could set a formulary in medicaid. that is not legal for medicare. the fda i think appropriately is not allowed to consider costs

when they're approving a drug you never want to -- folks to say, well, this would be brilliant but we're not going to put it on the market because it's going to cost too much money. but there's really no -- other countries have put caps on drug prices and ceilings. in a lot of places around the world, you can buy drugs that are really invented here in the united states and discovered here in the united states and sold here in the united states for 30 to 40% more than they are sold to people around the world. i think eventually there's likely to be a conversation and we won't not solve this tonight, steve, of whether america should continue to basically fund the r&d for the entire pharma industry into the future and what kind of burden that puts on our health consumers that isn't

there elsewhere. but there's no question that unlocking the human genome and mapping dna has lent itself to incredible possibilities. i think the latest data, and peggy is here so if i get this wrong, just pretend you didn't hear this, peggy. i think the fda has about 60 or more drugs that they consider breakthrough drugs. and about 80% are in the targeted therapy region, and that's just starting to explode. so there is a cost factor, but i think also there's a huge benefit factor. one issue that is not really in the drug area or in the innovation area that i think is a focus and is a growing focus is back to sort of part of the delivery system issues are finally paying doctors to keep people healthy in the first place.

if you think about fee-for-service, the way a lot of reimbursement occurred is through the acute care system. if your patient stayed out of the hospital, in fact, you were often not as lucratively rewarded as if your patient ended up in the hospital. and that such as a providers always did want to keep people healthy but how to shift financial incentives -- and you heard leader cantor talk about risk sharing. if a provider has a patient, a diabetic and through earlier intervention, wraparound care, following up, did he or she take a medication, is the medication working? prevent the next hospital dags then they now will get a share of the savings. and i think that's an incentive that not only leads to better care but more appropriate intervention.

people are watching the pathway that particularly chronically ill patients have and how many times come how many emergency room visits there are. some of them can't be avoided but a number of them can with followup care and somebody looking out for them. so i think that's all a part of the service. the other part of is looking at smoking and obesity, the two underlying causes of most chronic diseases and really doubling down on going after smoking again, helping people -- so here's a great factoid you can use in your next trivia contest. medicare, five years ago, would pay for medicare beneficiary to get smoking cessation treatment once they were identified with lung cancer, but not before. okay? make a lot of sense? pay for a diabetic to have an

amputation, all the followup care, all the post-amputation treatment but not necessarily the -- all the benefits that it took to intervene more dramatically, more quickly, wraparound care that would, perhaps, have prevented that. so again, some of the way that we pay really does create a different way to practice. and measuring and looking at what's happening across the system, why ten times as many tests are being done in this case as opposed to this case, what the outcomes look like, how people can be kept healthier for longer periods of time i think is just beginning to happen. it's really an interface finally of technology and health care in a way that i think can lead to a lot better care. >> the incentives -- and that's what the secretary is talking about. the incentives are right when you are talk about preventive

care and you're talking about healthy living and wellness. this is part of the aca that came out and had and allowed for some of these sort of incentives by private employers to put in place for their beneficiaries to reap some of the reward for their healthy behavior. and it's also relative to the individual. the problem is you've got another arm of government now coming in and filing suit, the eeoc, against some of these plans because of what they claim is a violation of the ada. so we've got to be careful now. i mean, i am all for i think incentives make a huge different. it really does. it's risk allocation, is where is the incentive to share in some of the game if you taken the risk? so you know, we've got to be careful all the time when we say we can fix this from the

government standpoint, let's do this, and then you see once again the government comes back around and says, no this is where it needs to be. so i think this goes back to the larger picture. if the supreme court case comes down against obamacare, then you're going to have real, both sides are going to have to step up, and i think the sensitivity on the republican side is going to be about we've got to roll back this sense that we can fix all problems here. but instead why don't we create the platform or the environment for the private sector to do that which we believe could lead to healthier lives and to less costly health care. >> if the supreme court rules against the plaintiffs are you optimistic that the republican majorities will step up and look at ways that the act can move forward and fix what needs to be fixed and not vote for the 57th time to repeal?

>> so what -- >> just curious. >> you know, as you know, and i said before, some of the really tough parts of that law haven't yet been implemented. there is a lot of discussion around the cadillac tax now, and that's not just republican opposition. there's a lot of democratic and then the labor unions very much opposed to the cadillac tax. so you've got i think and was said earlier, we have an election that's coming in november of '16, and these kinds of questions i think are going to be a real test for the next president and his or her administration. because are you going to subject all to the mandate? are you going to implement the cadillac tax that is coming? and these are questions not just for republicans, if the law is and stands as it is, it's a question for i think both parties. but i would say this, having been and served, you know, for

six years in a republican leadership, one of the things i want to stress most, again, risk and rewards, incentives, they matter. and going back to the prescription drug arena, the pharma, the bio tech arena, there is nothing more valuable, i believe, long term to guard that research, to create incentives for the private sector to continue to risk capital to create these life-saving drugs that we've become accustomed to in this country. and you're right. other countries are living off of us. i don't know what the answer is because if we say we're not going to do it unless you do it, we're going to all be out of luck then. i do, that's why i've always opposed, it ends up being price fixing. then you are beginning to play

with this risk and reward that the country was based on. and you're liable to snuff out of some of the innovation and life saving drugs we've seen. so that, too, and it was constantly part of the debate on the fiscal end as we dealt with the sequester, as we dealt with what the tradeoffs were. and i believe we've got to be very mindful of that and hopefully we'll not get there where the government is ending up dictating what the prices are. >> we're calling time? so that's it. we're calling time. i think, though, we have a few minutes for some questions from the audience. if that's -- if i'm not mistaken. >> yes. >> and mr. mcintyre, five minutes. we've got microphones on either side. if anyone has a question, stand up, state your name and your affiliation. hopefully nyu affiliated individual, student. but if not, please, go ahead. >> debra wine trop from garthers burg maryland.

i am a 27-year alum of nyu. >> perfect! >> and to all of you, you'll make it. just pay the tuition. trust me. pay the loans off, you'll make it. reward will come. one, we have an incredible administrative burden in the health care system. i happen to work in the pharmaceutical industry and access to getting drugs by putting hurdles with prior authorization, gets in the way of patient care. i am a pharmacist by training so i care about patients. it's important to me. one of the other administrative burdens or lack of harmonization is the government itself. so many administrations. we've got the veterans administration, active military and their beneficiaries, medicare, medicaid, how come we haven't gotten some harmonization there? it is a single payer. why have we not kind of streamlined what the federal government is paying for all those beneficiaries so we can get some economies of scales that i'm sure representative

cantor, in your business now, you can appreciate. >> anybody want to take the first shot? >> well, i think there was -- there is conversation, i would say. in my time there, and certainly a lot of dialogue, particularly with the v.a. system and hhs, but medicaid is run mostly by the states. medicare is the big federal program. within the -- at least military as you know, active military have a different system than the v. a. has. so it's multiple systems as you say. i think there clearly could be some efficiencies of scale. there's talk about eventually getting to the point where once

there are electronic records that can talk to each other, looking across those systems, and ways that there can be greater opportunities to leverage contracting ability. but you're right. right now, it is very separate and siloed systems. and, you know, the system that most americans are in, the private insurance system is a world unto itself with 50 plans in one, you know, company, in one state. so i -- we still, you know, one of the reasons that i think we are higher per capita than basically anybody else on the face of the earth is we do have a much higher administrative burden. some of that is private insurance. but government programs -- i can't speak for the v.a. or defense department, but at least medicare runs on about a 2% to 3% overall administrative cost.

which is pretty good for 53.5 million beneficiaries. i wish we could get private insurers to lower their costs, too, in that ballpark. >> and i would say this. first of all, i like the suggestion. if the government's going to sit there and say, you know, attempt to go and say this is good for everybody, i need to do it for itself. i do think you're right about all the different arms of the federal government should begin to think about at least making it easier for providers. so maybe there's an opportunity for the two sides to come together on that. i don't believe there's a lot of folks here in this town who do believe that the government can

actually function cheaper, more effectively than the private sector. so that you threw that out there should probably be a point of discussion. because if it's true, because we had this big discussion when on the democratic side of the aisle during the aca discussion, there was a government option. remember, there was a lot of, a lot of discussion, a lot of support on the democratic side of the aisle that was a majority in the house, obviously, and in the senate at the time that they wanted the government to be a competitor with the private sector and be the regulator. and the argument given at the time was we need the government in there somehow to keep the private sector honest because we can't have the profit that is being made in the private sector. that was the argument that was being made. again, my reaction, when we say somehow the government can operate at 2%, and why is it that the private sector is not doing so and what is the outcome? i think there needs to be a lot more discussion on that. >> well, just a snapshot, i know we're running out of time, and this is one question. medicare advantage started in the early '90s as a private sector competitor to medicare. the theory was that the private

sector could run more efficiently benefits for seniors, coordinate the care. and they actually, in the statute, creating the possibility, were to be targeted at 90% of fee for service. we can do it at 90%. by the time this administration came in, medicare advantage was at 113% of fee for service with no health benefits that were measurable. so part of what the aca did was bring that back down. but just that one snapshot where the private sector was competing, supposedly going to run -- >> but it's apples to apples. it wasn't necessarily, right? >> no, it was medicare to medicare. >> but m.a. versus fee for service? >> correct. started at 90% and went to 113%. >> and that's why the discussion needs to be a lot longer. now you're introducing the concept of choice.

right? >> another question. i think we're almost out of time. but go ahead, please. >> we'll keep your answers shorter. >> thank you. >> so i just had a question about sort of we're now just getting into implementation and it seems like we have no patience with the way we're reacting to the aca. seems like it should be 10 or 20 years before we start to see real results. we're already starting to see some, but policy always takes a lot of time, it seems like. so i was just curious, secretary, how long you think it should take for the aca to really show true results. i know the scores are always, you know, until 2025 or 2026 now, but what do you think? and the second question is about consolidation. i was just wondering how you feel about some of the things we're seeing now with a lot of hospitals and physician groups being consolidated with facility fees and things like that. and a problem for chronic care

patients and elderly patients who have to go to the doctor a lot. i was wondering what you think about that, and if you think that's sort of a reaction of the aca or was it just something that was sort of there before? and if you really think it's a problem for the patients. >> i would just do a quick answer to the first. i clearly, this is a major framework assuming supreme court cases are survived that will evolve over time. we're looking, this year, at the 50 agent anniversary of medicare and medicaid. this morning i want to express our grief and condolences to the families of two hostages, one american dr. warren weinstein, an an italian, giovanni la porteo who were

tragically killed in a u.s. action vm they were devoted to improving the lives of the pakistani people. i directed my national security team to do everything possible to find him and bring him home safely to his family. and dedicated professionals across our government worked tirelessly to do so. we also worked closely with our italian allies on behalf of giovanni who was kidnapped in 2012. since 9/11, our counterterrorism efforts have prevented terrorist attacks and saved innocent lives, both here in america an around the world. and as for the culmination to protect innocent life only makes the loss of these two men especially painful for all of us. based on information and intelligence we have obtained, we believe that a u.s.

counterterrorism operation targeting an al qaeda compound in the afghanistan-pakistan border region accidentally killed warren and giovanni this past january. yesterday i spoke with tim warren's wife's layne and prime minister renzi of italy. as a husband and as a father, i cannot begin to imagine the anguish that the weinstein and la porto families are experiencing today. i realize there no words to ease their loss, nothing i can say or do to ease their heart ache. today i simply want to say this as president and as commander in chief i take full responsibility for all our counterterrorism operations, including the ones that inadvertently took the lives of warren and giovanni. i profoundly regret what happened. on behalf of the united states

governments, i offer our deepest apologies to the families. as soon as we determined the cause of our deaths, i directed the existence of this operation be declassified and disclosed publicly. i did so because the weinstein and la porto families deserve to know the truth and i did so because, even as certain aspects of our national security efforts have to remain secret in order to succeed, the united states is a democracy, committed to openness in good times and in bad. our initial assessment indicates that this operation was fully consistent with the guidelines under which we conduct counterterrorism efforts in the region which has been our focus for years because it is the home of al qaeda's leadership. and based on the intelligence that we had obtained at the time including hundreds of hours of surveillance, we believed this was an al qaeda compound, that no civilians were present and that capturing these terrorists

was not possible. we do believe that the operation did take out dangerous members of al qaeda. what we did not know, tragically, is that al qaeda was hiding the presence of warren and giovanni in this same compound. it is a cruel and bitter truth that in the fog of war generally and in our fight against terrorists specifically, mistake, sometimes deadly mistakes can occur. wu bun of the things that sets america apart from many other nations, one of the things that makes us exceptional is our willingness to confront squarely our imperfections and to learn from our mistakes. all right i directed a full review of what happened. we will identify the lessons that can be learned from this tragedy and any changes that should be made. we will do our utmost to ensure it is not repeated, and we will

continue to do everything we can to prevent the loss of innocent lives, not just innocent americans, but all innocent lives in our counterterrorism operations. today we join their families and friends in honoring warren and giovanni, two humanitarians who came from different countries but who were united by a spirit of service. for decades warren lived the ideals of our country, serving with the peace corps and later with the united states agency for international development. he devoted his life to people in africa and south asia. he was a husband, father and grandfather who willingly left the comforts of home to help the people of pakistan. he was focused on helping pakistani families escape poverty and give a better life to their children.

giovanni's humanitarianism also took him around the world to the central african republic to haiti and ultimately pakistan. like warren, he fell in love with pakistan and its people and believed passionately he could make a difference in their lives. giovanni's service reflected the commitment of the italian people, our great allies and friends, to the security and dignity of people around the world. and today is a reminder of the bonds of friendship between our countries and the shared values that bind americans and italians together. there could be no starker contrast between these two selfless men and their al qaeda captors. warren's work benefited people across faiths. meanwhile, al qaeda boasted to the world that it held warren citing his jewish faith. al qaeda held both men for

years, even as warren's health deteriorated. they deprived these men with precious years with their families who missed them terribly. amid grief that is unimaginable i pray these two families will find some small measure of solace in knowing that warren and giovanni's legacy will endure. their service will be remembered by the pakistani men women and children whose lives they touched and made better. their spirit will live on in the love of their families who are in our thoughts and prayers today, especially warren's wife's layne, their dauters alicia and jennifer and their families. the shining example of these two men will stand as a light to people the world over who see suffering and answer with compassion, who see hatred and offer their love who see war and work for peace. may god blegs these two men and

may he watch over and comfort their families for all the years to come. na now to capitol hill where health and human services secretary sylvia burwell is commenting on her 2016 budget request, also likely to talk about health care and medicaid and medicare. our coverage begins here on c-span3. >> -- to put these issues on parody and make progress on them. we look forward to doing that. with regard to our conversations to you and senator stabenow we'll try to beat the deadlines put in to implement the bill. as everyone knows one year and nine months for me. the idea we can get that done and done quickly and get these things in place so we have those

eight up and running and the states -- eight states up and running, but continuing to do the work it takes to implement mental health parody. that's about payment systems, about stigma, about how we implement our grant programs which brings me to the gao issue. in the gao issue i think there were two issues we want to hear and take seriously. one has to do with coordination make sure we're coordinating across government. i've asked samsa and the assistant secretary to come together and do that intraand enter government coordination. with regard to the question of the evaluation and the quality of our grant making, i think you probably know we have a new acting deputy secretary, dr. mary wakefield, the highest ranking nurse in the federal government. she comes from hrsa. hrsa has made a lot of progress

with the question of grants and evaluation. we want to see if we can share some of the best practices and see how to continue to make progress on this issue of evaluation. >> thank you. and i think we want to look at what we can do to help enable you to do exactly that. >> thank you. >> if there are things that need to be said in report language or moved around or in the budget, let's talk about that and be sure we get on that track where this happens. i'm going to go ahead and go to senator murray. a lot of questions that i might ask will be asked by others. we'll see what's left when we get back to me. >> thank you mr. chairman. madam secretary, for many women, the affordable care act expanded coverage of all fda-approved continue separatives has introduced their out-of-pocket costs and given them access to more effective methods of contraception. women have saved over $483 million because of that provision. unfortunately there have been on

going reports of women across the country experiencing difficulties in securing guaranteed no-cost kov reasonable from their plans. the kaiser family foundation released a report showing that there is still variation in how insurance carriers are adhering to the aca requirement and that not all methods may be covered without cost sharing by women policyholders. as someone who cares very deeply about ensuring women have access to comprehensive health care that is very concerning. has hhs identified the carriers that are requiring cost sharing or declining coverage or otherwise limiting coverage for some of these contraceptive methods? >> the issue has been brought up broadly to us. it's an issue we continue to work to make sure our guidelines are very clear about the requiremention of the aca. it's working across the issues of contraception. we've seen some of these issues arise in certain farm suit skals and drugs for things like hiv and other things.

we're taking the steps to reenforce and be clearer about our guidelines. with regard to the specific cases as they come in those in terms of -- ags the kaiser report was a general report. it was about us understanding where those specific issues are, and when there are those specific issues we plan to follow up. >> you do plan to follow up. >> we do plan to follow up. we understand it's a general problem. by putting out better being clearer about our guidelines and requirements and in our conversations with the insurers, it is one of the things i continue, as i have conversations, to make sure people know, making sure that whether it's providing the transparency of information about what you do and don't cover or making sure that there are things like this issue of the coverage that we're being clear about what the law is and our guidelines. >> thank you very much. i really appreciate that. i was really pleased to see that you're requesting $490 million to expand the effort to address

antibiotic resistance. outbreaks of these dangerous superbugs are occurring more frequently in hospitals around the country. i talked about virginia mason medical center in my home state. in february i sent a letter to the food and drug administration urging them to take action to improve safety for patients and a followup letter in march calling for a review of fda's practices surrounding the type of scopes that were involved at virginia mesa and other places oovmts we have to do a lot more to prevent these infections from becoming resistant in the first place and detect them as soon as possible. how would the additional resources that you've requested in your budget help with an outbreak at virginia mesa or any of the other places we've seen. >> the program in our budget has a number of elements in terms of what it's going to do to do that. we put out a strategy in '14. in '15 we put out the action

plan to go with the strategy. our budget is the budget to support the action plan. the elements are making sure we are redoinguceing the over use both in humans an an machlts my partner is tom vilsack at usda. it's an animal issue as well. first, some of the funds will be used to support the reduction of that in terms of both humans prescribing as well as in terms of animals. second epidemiologically, we need to recognize quickly as in the case in virginia mason. we need the epidemiologists to recognize when we do it quickly. that's one of the things we see in the scopes issue. the third thing is to make sure we continue to do the research to develop things that aren't resistant as we go forward. so those are elements of the core strategy that the funds will go against -- >> it's multipronged. >> it's multipronged approach. much of this sits with the department of health and human

services. we work across other departments as necessary with usda being the primary partner because of the animal connection. >> what about the public health programs in washington state, what role can they play? >> that's a place where cdc will continue to work and education is an important part of that. when one gets to this issue of prescribing the number one issue, making sure the cdc is working with public health organizations as well as medical centers and training facilities to make sure people know about not overprescribing. part of the problem is actually overprescribing. it's the demand of the consumer the patient, they want the antibiotic to treat something they're asking. but it's also the physicians. as part of the public health and population health, cdc has the ability to go in education and the tracking. we need better monitoring. >> i think this is very important. we'll see a growing number of cases similar to what we saw with other arenas unless we take

this head on. >> it's millions already, so everyone has a sense. 23,000 people died last year but there are millions and millions of people who contracting resistant disease. and many of that is occurring in hospitals as you reflected with the situation at virginia mason and the scopes. >> thank you mr. chairman. >> senator cochran says he'll speak in order of arrival. i want him to know when it comes time to allocate subcommittee amounts, that you can talk in this committee any time you want to no matter what they say anywhere else. on this side i vsenator langford. >> madam secretary, thank you for being here and thanks for the engagement on this. let me go through a couple questions quickly on it. there's a lot of conversation

about the rack audit process. that's not a new conversation to you at all. in your testimony you also even note that starting in 2009 there's a 1300% increase in medicare and the auditing and what's happening in the appeals process. there's obviously a problem that has happened. so while you're accelerating the appeals process on this, i'd like to get down to some of the root causes. there have been multiple changes to the rack audit process. what's pending right now to continue to reform the process beyond just the appeals process, but the root cause of this. >> with regard to the rack process, i think it's important to step back. what racks were put in place to do was to work on program integrity issues in terms of medicare spending. this is something that dr. coburn and others helped us focus on. this was put in place so we could do the tracking. it has tracked many, many and returned quite a bit of money to the federal treasury, billions

in terms of what goes back in the trust fund. there were negative unintended consequences that occurred. administratively we have taken steps to change the rack process. >> what i was trying to get at what's next? what are the changes pending still? >> there are constraints put on by the congress in terms of us and our ability to go forward with racks. that's something we want to do. there's also contracting. we've had challenges to the contracting. we need to get through those changes and go through the process. we need to get the racks back up and running and we need to put in place and implement the administrative changes. chings like, if it is not resolved within 90 days -- we have these changes, but not able to act on them as fully as we like because the process is not up and running it's only in part d, a very small part. it actually does interact. there are a number of changes. if the rack case does not go forward and isn't successful, there will be nothing paid. we tried to fix some of the

incentive issues that were causing problems. it is related to the backlog issue, and the place where we believe we need some help from the congress and have have these conversations a across a number of committees are in the backlog process. >> the recovery audit data warehouse, putting that in place to make sure you don't have contractors doing multiple claims, last year there was a statement that came out to say that is in process of trying to reform that to make sure the contract terse -- do you know if that there has been any progress. >> that's one i'll have to get back with you on. >> dealing with good providers. a good provider, they don't need this continual rack process coming through as frequent or at least have a smaller number pulled. any kind of kens quens for any contractor that's pulling a lot of files that are being overturned, so on both sides of this there's an incentive for the contractors to also be good the way they do it and the providers. >> yes. and the provider review is something we have put in place in these administrative changes.

>> okay. let me ask about anotherish yoouf not near as contentious as rack audits icd 10 and the transition to that. let's do something simple as well. this process transition everybody is concerned about it, you have dealt with it for a long time. a lot of conversation about the advanced payment ts, what happens in the transition, how many small providers will be vulnerable during that time period, the same issue with the racks. the racks can be manninged by large providers, small providers. very difficult for them to have large files that are pulled. the concern is out there as well for icd 10 what happens in the transition there, the in between. the discussion has been out there on advance payments. is there a policy in place, are there details coming out or is that still being considered? >> we plan to go forward in october. you probably know there was a delay that was legislated. right now the plan is to go forward this october to icd 10.

as part of that process we have been doing testing with and communication with large players and small plargs. most of the large players have been red did and are player. the question of any type of delay has to do with both cost as well as the question of fairness and equity for those prepared to make the switch. the hospital associations have done surveys and we have very high percentages of people reporting they are ready. for any who aren't anyone we will provide the technical assistance to go in and try to do the training. >> what about the advance payment side of it? is that still being discussed? the concern is there's not going to be a smooth transition from one to other. is it your confidence there will be a transition and not a gap for the small providers. >> the numbers that we're hearing and what we're hearing in response is they are ready only a very small group that is not ready. from now to october we want to continue -- if you're hearing from those. >> it's important for us to know you're confident there's not

going to be a gap in payment to further expose some of these smaller providers. >> we are planning to make sure we can go through and people will be ready so that there won't be those kinds of problems. >> senator mikulski. >> thank you very much, mr. chairman. we welcome secretary burwell. before i go to my questions to her, mr. chairman i'd like to bring to your attention and the committee's attention that a very dedicated staff member of this committee for 13 years who has worked for senator harkin then worked for me, was also respected by senator specter will be leaving. adrian hall lock who has worked for the committee for 13 years will be leaving the go to the executive branch -- actually leaving the go to nih, not for a clinical trial but to again help dr. collins. i would like the committee really, to give adrian a round of applause.

[ applause ] >> and i will say thank you, thank you to the committee. >> madam secretary i'm glad to see you. so many of the great federal assets of hhs is in maryland nih, fda, cms, just to name the big three. they have a tremendous impact on our economy, the jobs they provide and the jobs they stimulate. we could not have the robust biotech community we have in maryland without you. so we'll, of course, be talking about those issues. but i'm going to go right to a marylandish yu in a part of the state that's very familiar to you. my mountain counties up in appalachia appalachia. i have a situation where due to the census they're telling me that allegheny county right next to your colleagues in west virginia, your daughter of west virginia, has lost their designation for federal funding to qualify for the affordable

care. i wrote you a letter in february. your staff has been calling back and forth, but we've been told recently there is nothing you can do. madam secretary i need you to look into this. you know western maryland you know those mountain counties. you know they've lost population. you know they've lost jobs. we don't want them to lose hope in their government. the loss is $2 million. that may not be a lot by our spending up here. it enabled them to attract doctors, enabled them to attract volunteers that reduced dental visits. can i have your assurance that you will look into this and not have a lot of bureaucratic phone calls back and forth where they just say no? >> senator, i will look into it and see what the opportunities are for us to try and support this county. >> and not just a list of grants that they can apply for. they are not an urban county.

let me go on to another issue which was a source of great exuberance among many of us the fact we worked together on a bipartisan basis to pass the child care development brock grant working closely with senators alexander burr, senator harkin and myself. we passed an authorization. can you tell us what you're doing to implement it and particularly where we worked so hard on the quality provisions. sure we wanted more money sure we wanted more spots, but we really focused on a bipartisan basis. can you tell us what's in the money to implement the law and enhance the quality and safety of our children? >> the quality and safety are a large part of the implementation and what the money is for. that is implementing the standards that you all put in. with regard to increasing the questions of safety and quality on an evidence base. that implementation is part of

the money. the second part of the money, the only other part of the money in terms of the implementation and thank you for your leadership on this, there are funds, because one of the other things we were asked to do is make sure that child care for unusual circumstances for parents who work different hours for places that are not receiving and hard to reach, that we do work in that space to understand how we can help and support that. so quality in terms of the standards, and those were standards that we need to apply and implement and we will do that, as well as the quality issues. this cuts across the entire suite as one looks at the continuum for children. home visiting child care in terms of implementing the authorization that you gave us. also in the budget is the child care expansion that senator murray mentioned the $8.82 billion over the ten-year period that would be for making sure that working families have access to that, and then we don't want to forget head start and early head start and those

partnerships. this is a continuum. we worked to implement that piece in the context of improving quality and safety across all of those pieces is. >> in a nutshell, a $370 million increase from last year. is that correct? >> that is correct. >> of that $370 million about $270 million is for the new quality provision? >> that's correct. >> do you feel that's adequate? >> we do to get us started. i think what we want to do the get the implementation started. as we look at next year's budget we'll understand more. >> you also have $104 million for pilot programs for this gap in care? when we think of shift work the days of factories are are one thing. but we have nurses who are working the night shift. i a national security agency that works 24/7 many are women cripping the fers keeping america safe, often single

mothers. my time is hope, but i hope we can have additional conversation on the work that you're doing on both foster care and also on the unaccompanied children. though the children seem to not be at the border the way they are, they're in our country, they could continue to come. we cannot turn away from this very important issue. i look forward do dialogue with you and with the chairman. >> thank you. >> senator alexander. >> thanks, mr. chairman. welcome, madam secretary. senator murray and i on the health committee are trying to get a few things actually done. we've reported a bill on elementary and secondary education. we're moving ahead to higher education. as you know, we're going to get into innovation in medicine. and one other area where i believe we could get something done is electronic health records. you and i have talked about

that. you've talked about a year and nine months left for you. what i'd like to do is to move up toward the top of our -- of your list and our list doing something about electronic health records. the government spent $28 billion subsidizing electronic health records. sounded like a wonderful idea. half the doctors are choosing not to participate in the program instead they'll face medicare penalties this year. doctors don't like their electronic medical record systems by and large. they say they disrupt the work flow interrupt the doctor-patient relationship. they haven't been worth the effort. ama commission grant study found electronic health records are the leading cause of physician dissatisfaction. a survey last year found nearly 70% of physicians say their electronic health records haven't been worth it. i've met already with andy slavt

and at your suggestion i'm meeting with dr. desalvo. what i would like to do with the committee here listening -- one other thing senator murray and i have formed a bipartisan working group on the health committee to identify five or six problems in the electronic health record system we can address administratively, in other words, you can do it or legislatively if we have to. would you commit to putting on your list of things that you would like to get done in the year and nine months that you plan to be here, working with us, identifying five or six things that would make this promise of electronic health records something that physicians and providers look forward to instead of something that they endure? >> yes. after our meeting and our conversation, i think we've got a group, a working group of staff ready to go, and we are committed to do that. i think this is extremely important in and of itself, but all the thing it touches. i'm sure i'll get a question,

hopefully about oip oids and heroin. electronic records touch that issue. precision records, touch that issue. delivery system reform creating a system of health care delivery that has better quality and is more efficient, it touches that. we should focus on it in and of itself. where health care is going and where everything the going in terms of our ability to serve the consumer the patient in the way we need to, this is a core part. so welcome the opportunity, look forward to putting the list together and look forward to getting it done. we'll look at our administrative things and we want to work with you all on what we need legislatively as well. >> great. a lot of interest on the committee. senator cassidy he's a physician himself. other members on the democratic side have expressed interest. senator mikulski and i and burr

and bennett asked some higher education folks to give us a report on what it cost -- the cost of overregulation. they gave us 59 recommendations about what to do. we're putting it together in legislation. we're going to incorporate these ideas as much as we can in thigher education act. at the same time, the national academy of sciences has said that principle investigators are federally sponsored research projects spend 42% of their time on administrative tasks instead of research. we used to do a lot of talking here about needing more money for research. taxpayers spent $30 billion a year on research and development in colleges and universities. nih spends about 24. vanderbilt university hired the boston consulting group to tell it how much it cost vanderbilt to comply with federal rules and regulations. the answer was $150 million for one year. a lot of that has to do with

research. that's not all in your department and not all in education. but my question is will you work with us and help us work with other agencies to see if we can work with the national academies and take that 42% down releasing hundreds of millions or maybe billions of dollars which could be used for important research of the kind all of us hope there should be more of. >> yes i think it is an important issue. i think we can make progress. having sat on the end -- when i was at the bill and melinda gates foundation our grantees would ask us to pay the administrative level that the federal government would. having been in a position where that's what you're always asked to grant with a grantee. i believe we need to work on it, work on it from our end at the federal government but across -- it will help even beyond the wrk we do. some of these things, we need to figure out where we are willing to take certain risks or not. some of the administrative costs

have to do with very important things like tracking conferences and provisions that are put in. i think this is a place that's right for us to have quality conversations about what are the things we can do to reduce some of that burden, reduce that cost and we want to make sure we're all clear about what does it mean when we do the changes that we do. welcome that chance and i know our nih colleagues, there are a number of things already on their list they'd like to talk about. >> thank you, madam secretary. thanks mr. chairman. >> senator reed. >> thank you madam secretary for your testimony and great leadership. let me focus on a topic of why senator collins have been as you know, for years committed to ensuring adequate resources. i'm pleased to see your budget request is a slight increase from previous years but still $200 million below the previous authorization and appropriation. what can we do to get la hee further funded. with weather patterns the way they are it's not just the cold

in the northeast and families dealing with that it's increasingly hot summers to which air conditioning is essential to people in the south, southeast and east coast. can you help us? >> in the budget proposal, what we did was provide the base level of laheep. we also proposed a contingency fund. this gets to the issue of variability and what it's about and we have having these huge changes. what we were trying to do is create a fiscally responsible way to respond to the type of increasing erratic weather that we're seeing and that the contingency fund would be our ability. it's obviously scorable in terms of how much we need to put in the budget so we have the contingency fund. it would allow us to have some of the flexibility, so then fund at the base level but add a contingency fund that can help us. that is our approach to working to get additional laheep funding. >> i commend you on the

increase. senator collins and i look forward to working with you on this. a related issue, you have the discretionary authority to move aside about 1% of the funds. you consistently do that with laheep. to date there's about $34 million that's not spent and there's certainly the need out there. can you work to release those funds or make sure they're committed to laheep. >> at this point we're doing the final review to determine if and when those funds will go. we'll work with you. we're 99% there. the 34 is the outstanding amount at this point. >> quickly to another topic, cdc section 317 immunization program. it buy it is vaccine for many middle and low income families. it provides the structure for vaccination which is a critical public health -- some would

argue one of the most critical public health initiatives we've taken in the history of public health. it is somewhat disappointing that your budget is going to cut this program by $50 million next year. particularly concerning because we're seeing the outbreak of some contagions that we thought were in my youth, like measles. this section 317 is also used to track that and respond to that. looking at all of these issues, why are we cutting this program? >> like you we agree and are very concerned about the vaccination issue, especially in the context of the measles outbreak that we've seen and all that we've seen happening around that. with regard to 317, there's also the additional complimentary program, a children's vaccine fund. when you combine the two of those programs together, there's a net increase of $58 million in the budget overall. with regard to 317, as we're implementing the affordable care act, parts of 317 were used for those that were underinsured.

when the aca was passed, it is actually required that all plans do no cost sharing. so when i take my child in for the wellness visit that vaccination is actually -- it doesn't have a copay. and because of the reduction, the 317 money that we reduced was for vaccine purchased that is being reduced because we have those people who are now in a fully insured space. with regard to the funding at 317 that does the kinds of things that are very important that you mentioned, which are those issues of educating, and that's something we're doing more and more of through the cdc out of this measles outbreak. none of those funds were cut as part of this. >> and you are doing analysis to ensure that there's no gap and in fact children are getting the vaccines. >> so the problem senator murray raised with regards to contraception we have not seen with vaccination.

which that people are not covering that. if that's something people are hearing about please let us know. it is when we here that we go back out with a guy dance. we have not heard in anyone at this point. that is a part that seems to be being implemented correctly. if you are hearing something different, we want to know. obviously this is an extremely important issue. we just did the wearing in of the attorney general. that's something he's been focused on. we're trying to do everything we can, work with the states directly, epidemiology. >> i think elmo is a good place to stop questioning. >> my children now understand my job. >> that's the moment they knew you had arrived. >> yes. yes. >> senator cassidy. >> hey, secretary burwell how

are you? >> good morning. >> a couple of things. you had mentioned -- this question has bugged me for a year. when you mentioned the the effort cms has made for those unaccompanied children coming to the border. when i was at the house there was an oversight hearing. as i recall, cms had $800 million in the regular budget to care for the expected surge of unaccompanied children and there was a physician there and she had the public health service uniform on, and i was a little critical because the response have been so poor. and she said, well i'm the first doctor and i was just hired two weeks ago, and this is like july. now i don't expect you to have the answer as to the $800 million was spent now with you. but a question for the record. cms, or hhs had $800 million, and the first doctor was hired in the middle of summer when they had requested a bump up in anticipation of asurge of

unaccompanied children. and you can follow up with that because i don't expect you to have that. when you mentioned it oh my gosh. it just popped up. it's bugged me ever since. and she was a dedicated physician. but she was fired as the first physician. you said two or three nurses were working on it, but never a physician, and only two or three nurses to handle the whole program. no offense against the nurses it was just so few of them. second you mentioned the effects. i want to speak for the physician in a smaller practice. the big hospital chains are of course ready. but what i'm reading here from athena help is that cns estimates denial rates were rising by 100% to 200% and in the days in accounts receivable will grow and it goes onto explain why. i'll say that according to your own website that urologist in south louisiana who is in a one

or two person practice, she cannot afford to have denials go from 100% to 200% and her ar growing by 40%. personally i think a reasonable thing to do is delay the transition phase. it's that doc struggling to see however many patients she has a day and suddenly has denials grow to 200%. not because she's not doing it right, because the system changes and unless we're sympathetic, we're going to drive her out of practice. that is what's happening. i'll put that plug in to create a core for all the physicians who right now just feel. now this is something that perhaps you can address. in february 2013, cbo projected the per person cost of medicaid, for just that portion getting

acute care. the person that for example the expansion population under the affordable care act would be $2500 in 2014 only including estimates for the the fully eligible. last month, the cbo projected an average per person cost of medicaid for $3460. including partial eligible and fully eligible. this is a jump of $1000 per beneficiary over the entire nation, which is almost a 40% increase. what's going on with medicaid? we'll disagree but the affordable care act is unaffordable for the taxpayer if from year to year we've had a 40% jump in per person medicaid costs. >> so i will want to look at exactly what the cbo reference is. because across the system, medicaid as you know is generally the least expensive options in terms of service and care for individuals.

to i'm surprised and surprised by that cbo number because as you and i had the chance to discuss in the ermserms of net and overall costs we've seen that not happening. in terms of the overall increases in costs, we've seen deep control of costs. i apologize. that particular number i have not seen and is not indicative of my understanding of the cost curb. >> and one more thing, you started off extolling the affordable care act. i'll point out apparently only 2% of those with 400% or above income, ie, not eligible for subsidies, only 2% of those eligibles have signed up for insurance through the exchanges. soft the middle class is getting hosed by premiums that have increased dramatically. and we're just going to lee the middle class behind when it comes to affordable health insurance. >> with regards to premiums in the -- >> no, this is in the exchanges. only 2% of those eligible for

insurance through the exchanges have signed up for the insurance. >> i think with regard to the number we have seen in terms of those eligible to receive insurance through the marketplace, as we have talked about, it's about 16.4 million people is the reduction. which is the largest reduction we've seen as a nation in decades. >> well we debate that. as we talk about cms cbo reduced the baseline of those insured. and the numbers i looked at is those newly insured have signed up through medicaid, not through the exchanges. >> cbo reduced their baseline of those uninsured. >> correct. >> so what cbo and the most recent numbers they came out where they reduced the cost of the affordable care act by approximately $300 billion in terms of their estimates. >> just in truth in advertising, that's because states didn't do the medicaid expansion. >> it was a combination. states do the expansion.

costs of health care costs increases were much smaller and premiums were much lower than they expected in the original. fewer people moved from employer based care to the marketplace than cbo's original. it was the combination of those three things that had the reduction. and cbo went from a number of about 55 million being uninsured, and that's total. that's not eligible for the marketplace, to 52. so what cbo did was actually reduce the number and therefore, the percentage of uninsured that we now have, that makes actually the percentage that we you know in terms of if you want a success measure would go up based on that change that cbo did. >> and so with regards to the question of the number of people in the marketplace we want that to continue to go up. we want to do everything we can. i think you saw we worked hard to have an open enrollment that

conserved the consumer. i think it is actually important for us to have the conversation. so i welcome it. >> yes. >> and so we were trying to conserve the consumer and we continue to see growth. can it be more? can it be better? we would like to do that. and we like to work on the ways we can make more consumers come in and find the affordability. having traveleded around the country and finding the woman who said you know how you treat ms this is a working woman with three children. you get sick enough until you go to the emergency room until they serve you. >> we're three minutes over. i'll finish by the woman i spoke to who says i'm 56 years old -- >> we are three minutes over. >> and i'm paying 500 bucks a month over for insurance. and i don't need what i'm getting. >> mr. shots? >> thank you, mr. chairman. thank you, secretary burwell. i have a question about telehealth. i'm a big believer in

telehealth. i think the dod has done good work. private health care providers are expanding their services. it's a way to improve clinical outcomes and also a way to save money in systems. and i just wan to know what medicare in particular is doing. what you think you can do additionally within the confines of 1834 m and whatever statutory restrictions you may have, and could you divide your question into those two categories. where you think the the law needs to be changed and you're stuck, and what you think you could be doing within the confines of the statute that you're not quite doing yet. >> so i think the places where we can do more are in the innovation center. so the funding we received for the innovation, and that was part of the affordable care act that we've been given. there we are seeing and doing a number of projects that are including telehealth. that's one place where we're acting. we have several things we funded that include