running around, nine of them are administrative. the number of nonclinical labor jobs has doubled. that's the opposite of what you would expect in a system that's getting more productive. the ratio of productive labor gets smaller every year as we get more efficient. we're not seeing that in hillary clinton. think about how to signify the process sees how to redesign them to have frankly fewer people in them so you don't have to check and fact so many things back and forth. we haven't tackled it yet. whenever i talk to doctors, why did we fix medical malpractices, defense medicine by doctors. i think there's lots of things that make it better, for following evidenced based pathways there are lots of ways you can do it. the last thing we have to think about of stuff, they're super expensive. we think about how to do how to reward doctor fees for things they'll be able to see.

to create competition on the supply side. i want to leave you with the follow for comments, the one that's despite lots and lots of discussion and and the worst web site launch, the aca is actually working, when you walk around patients and you see change. there's millions of people now who have access and experiencing technology, who are seeing systems that care. it's working. the next thing i say is exchanges are a good idea that can work well. they require make them work better and more dynamic. i don't think anybody wants to go back to the old way, under wrote it. we can make them work better, cover california shining light how you can make this work and there's a lot that you can extrapolate to other changes. the third thing is the problem gets cost. if health care cost a lot less, we would have a lot less about getting people into the markets, right. if health care was as reliable

as any other product i think we're more for one signal for quality, we'll have a lot better option if you want to follow through with it more. the last thing is that the policies that we passed over the last few years, aca, to wire us altogether and the governor said, are monumental. they definitely have moved everybody from the old model to the new model but that new model will be one that cares a lot more about your out comes and enl gauges you more, i'm very optimistic for the future. i thank you for your time and attention. >> you can see bob is truly passionate and optimistic about changing health care and has such a rich understanding of the issues. now, it's my pleasure to

introduce our next speaker, jd who is president and ceo of blue cross blue shield of tennessee, a nonprofit health plan serving more than 3 million members. jd has an unusual background for a health plan ceo, having previously led tennessee's medicaid program known as ten care. then governor tapped jd to turn around care and control the soaring cost and try to preserve the coverage. jd led that leverage successfully and i think it's very proud of the work that he did on that. prior to that, jd was a consultant, was a partner with mckens zee and company. he continues to be a champion for the residents of tennessee of blue cross and we're so pleased to have him with us today.

jd. i've -- before i do, i want to give you a little history, a little background in tennessee and why this is so important. there's a number of reasons why when we think about the future of health care, we should be focused on the highest cost populations. one of them, obviously, that's where the money is. if you look at medicaid that's now a 70 million person program that's the largest federal health care program by enrollment over $350 billion worth of expenditures. if you look at it you've got 20% of that population, less than 17 million people who are responsible for 70% of those expenditures, about $245 billion it's that senior and disabled population in the middle. the second reason to focus on these populations particularly, by the way, if you look at the two top bars when you talk about the institutionalized group. the efficiencies are so high. it gives you lots of room to

invi innovate. you can provide hands on care and stay below that $106,000 benchmark. the last reason and probably the most important one is health care is one of those preverse industries where most loyal customers are biggest high spend individuals in any given year are least satisfying. it's not because they have health needs the quality of care is so low and if you particularly talk about the medicaid institutions, they've been so low for so long, you've got people demanding and asking for change literally for decades. i'm going to take you back in time, go back to 2006 in tennessee, this is a medicaid program that's simply wasn't focused on long-term care at all. it wasn't that they did pay for them, they did, they had for years. but assessing -- accessing the surfaces was so difficult and the services were so piecemeal. it wasn't enough, obviously, if you look at the data to over

come the natural profit drivers that were sitting out there in institutionalized care. i can be hard on this program and leadership team because i was director in this window. it wasn't that we didn't care and wasn't that we weren't aware. we had so many things on our plate. we weren't capable of the comprehensive reform that this type of spend pattern demands. i will tell you aside, it was early in 2006 that we got protested by adapt, rightfully so, again, if you look at the numbers, that's a disabilities rights and they locked us into our building. i can remember looking down from the fourth floor with my management team as the protests group paraded in front of our group and they were dragging in our long-term care director behind one of the wheelchairs. and about the time they lit it on fire, long-term care director

saddled up, we never made eye contact, he leaned in and said i put my resignation on my desk and i leaned back and said, it's about time. there's no more pure example of democracy and action. so thankfully there were people who were capable of that systematic structural reform that came after i left. the director who followed that individual's name is patty, she's still with the bureau, one of my personal heroes. she came up with choices. what makes choices so unique is that -- certainly unique at the time. it was systematic comprehensive set of benefits integrated that that was available statewide that has a single point of entry, it was all managed through a managed care structure that was fully kacapitated to kp people out of institutional care. if you flip forward to 2014, you can see the dramatic results that are in the data and this is

a national story to a degree, i believe 2014 was the first year where hsbc over took institutional spend over all all across the nation. no state improved as fast or as dramatically as tennessee. i will tell you as managed-care ceo we were not good at this. when you think about the skill set required, it was fundamental tally different as claims adjudication as you can get. it is core competency for us. they don't do anything except work out of members homes. they provide meals, they do wellness checks, they oversee home modifications. they provide pest control services. if you think about the demographics. if you think about the geography of this program in tennessee, we've got nurses going into some of the toughest neighborhood and some of the remote geography in tennessee and together collectively and very proud to say that we're changing lives for the better. you'll also notice we're saving money. for those of you who saw quick

at math. the total long-term spending budget from 2006 to 2014, actually went down by $12 million. excuse me. that's not typical for a federal health care program, as you can imagine. over that same window of time the budget went up by 50%. i think the enrollment went up by 15 to 20%. it's a tremendous accomplishment. we may be the only visitor they have outside of our provider.

each and every time we seem to encourage them and let them know we think they can get better. i'm sure that gives them a piece of mine to to see the relief and members in their families faces is priceless. >> looking ahead, the same rock stars and bureau who came up with the joyce's program have come up with a new program. employment community first. these are individuals with s intelial individuals in tennessee most states have an asset requirement. tennessee it's $2,000 and can think about that number for a minute. we've got over 6,000 individuals in tennessee who meet those criteria who have been on a wait list for services in some cases for decades. that's not unusual.

that number is probably above 3 to 400,000 that's of the disabled that we know about. by some estimates 50% meet those qualifications aren't known to the state system. if you think about being on a wait list for decades you can understand why. there's a couple of things that make this story more pressing. one is majority of these individuals live with a family caregiver who is going to age beyond the capacity to provide care over the next ten years and it's estimated at two-thirds of those families don't have a plan in place of what happens when that primary caregiver passes away or becomes incapacitated. another real pressing part of this story is the lack of employment opportunities, which is core to this program. over nearly 70%, excuse me, of the disabled are unemployed, that was true in the 1970s and 80s, sadly it is still true today. the way the current system works and pretty much every state is

the only way to get off wait list is have a crisis culminating in the emergency department. if you think about that, that's a set up for institutionalized care. the good news, one of the silver linings here, most states have shutdown the big state run institutions. we've got 30 years of good data that says individuals are happier, healthier, report more control over their lives if they live in a smaller setting. but being placed in the community is not the same as being part of the community and having meaningful employment as a big part of this. couple of things i will add.

>> we are privileged to be a part of it. this is not charity work for us. this is big business. this is a new program, but the choices program that i talked about a minute ago, we've got revenues over $500 million a year. it's important part of this story being as sustainable as it is. i'm going to close with a profile of ryan, his grandmother, kim and his care coordinator christian. he's one of our members, he's an olympian. he has two jobs. he works at a grocery store and at walmart. what does he want. he wants a promotion. he would like to get paid well enough in one of these jobs that he doesn't have to try to juggle two of them. he would like to date. ryan would like what we all want. ryan wants what we all want for our families.

♪ ♪ ♪ >> i was football manager for my high school too. we had road race, tournament, and it was a full-man select hanging it up and having my own team, which was me, my dad, and one of my friends and his partner.

we came in and that third flight. they say i work hard. they say there's more people out there that look like me that will be able to work, like i do. ♪ ♪

being able to drive getting a promotion at work. and being able to get out and get my own place. i want to live out my own so i can meet other people around my age, maybe dating -- i felt like it use to driving. i wanted to be treated the same way other people like to be

treated. >> this is one of our new employees, she said. she's had 20-year experience here of the family supporter in the disabled community. if you think about it, we've got 6,000 people who work for blue cross in tennessee. we're really good at wellness and claims adjudication. but we don't have anybody or we didn't before this profile, before this program who fits kristin's program. i think we're exceedingly optimistic. this is going to become core kovrp t competency. most importantly we hope to change lives and save some money. thank you. >> you can see jd is both very analytic and compassionate problem sovr al ver and trying make things happen. now, it's my pleasure to introduce jeff row, he's president and ceo of blue cross

serving 2 million members in washington state in alaska. jeff is leading the transformation to a consumer sen trick company. as you'll hear he has a unique perspective working with large innovative west coast employers that you know their names, amazon, starbucks and microsoft, to name a couple, who have transformed the customer experience. he's bringing this consumer expressed culture to hillary clinton, to make it easier for the members to understand their hillary clinton benefits and navigate their hillary clinton options. and jeff actually began his career here on capitol hill and -- in the office of senator, slave gordon from washington state, we're delighted to be welcoming him back to the hill today. jeff. >> good afternoon. thank you. it's great to be here with you and to be a part of this important discussion. it's an esteemed panel and i'm honored to be a part of it.

you heard a lot about health care policy today, i think the insights and jd have provided thus far have been excellent. as we move this discussion forward, though, i'm going to move in a slightly differently direction, that is to step way outside the box of policy and examine the issues of fresh and totally different perspective. as nancy said, i spent four years on capitol hill and i found one of the great values that i benefited from was when an outsider came in and actually shared a perspective of a place other than washington that some might call the real world. i would like to talk about three seattle based companies that are well-known throughout the world for the tremendous success they've achieved in three very different industries. success that's been driven by technological innovation by operational excellence and perhaps most importantly by providing a great customer experience. and they are, as nancy said, amazon, starbucks and microsoft.

i would assert that there's a lot that we can learn about the potential future of health care from these companies. and all three, by the way, are clients of premier blue cross. join me as we consider these questions. what if amazon, starbucks and microsoft ran health care. what kind of system would they create. so let's start with amazon, the first of these. we've received as amazon's health plan since 2012. we feel we know them fairly well. amazon, first of all, is obse obsessed with its customers. they have worked relentlessly to put the power back in the hands of the 0 consumers. they are organizations that make decisions based on data. hard statistical evidence and they combine these two great obsessions, customers and data to deliver an unequalled customer experience.

one that makes every interaction with their customer simple and easy, fast and integrated. so at amazon, as you know, you can buy just about anything in the world in an environment that is all about transparency. amazon customers are given information they need to compare products by cost, by quality, and by user reviews, there by helping the consumer to make purchases that's right for them. you can get really low prices at amazon, but you can also pay more for products that provide superior quality and value. the choice is yours. they do all of this without requiring their consumers to do much more than to simply access the internet. the product does the work, not the consumer. so this dynamic makes amazon suppliers compete and compete aggressively, bob brought this point out as it relates to health care. so let's contrast this level of

transparency which is so fundamental to well functioning marketplace to what consumers are subjected to in health care. prices are completely opaque. the consumer leaves a provider and opens an envelope with an explanation of benefit in it. after the fact of what the service cost. as one person remarked, there's a surprise in every envelope. reports on the quality of care are highly complex and confusing, providers compete mainly on the basis of their brand name and the convenience of their location, not on service excellence and certainly not on the quality of their out comes. that lack of transparency permits dramatic variation in cost and quality in the delivery of health care. something that a well functioning marketplace would never tolerate. in washington state, we have providers who charge 30% more than the market average, even

for basic routine services with quality that is just average, if that. it's simply not justified and yet provider reimbursement rates often are presented as a take it or leave it proposition, particularly, in those concentrated markets bob highlighted. in essence, you pay more and get less. in any other industry, consumers would never tolerate such treatment. so a competitive and transparent marketplace wouldn't sustain such significant differences in prices for any services. another thing about amazon, a customer phone call there is considered a defect. think about that for a moment. if a customer feels the need to call amazon to discuss an issue, amazon considers that a defect. because amazon has failed to provide a process that is seemless and simple enough for the customer to not need

additional assistance. and yet if a so-called defect occurs, amazon is available immediately to help the customer get the issue resolved. so in contrast at health plans today, phone calls, including my health plan, by the way, phone calls are the primary way consumers get questions answered. amazon's so-called defect is our primary mode of interaction. and as an industry, we still use paper, forms, prescriptions and so forth -- to make an informed

decision about the care they deserve. so i ask, is this all a bit too conceptual for today's discussion. and i don't think it is. and i say that because -- we've already started this process of trying to bef haif like in amazon. let me give you a few examples of how this kind of thinking is transforming our approach to hillary clinton right now today -- we've and technology

. >> and -- you can feel that pulsing through the environment. we in health care need to adopt that customer obsession. i went in for a procedure not long ago, pulled into the facilities garage and encountered assigned reading, first two floors reserved for doctors. that's not patient sen trick, by the way, that's not unique to that facility. so, again, we've launched another service called it listens, it was developed by former amazon employee who works with us. allows us to quickly make improvements to service based on real time online feedback collected from our consumers and

perhaps the best part of the entire project is it went from concept to launch in four months which at amazon is normal but in health care is light speed. as we look ahead at -- we're designing products, networks, provider compensation models, analytical tools, transparency capabilities and so forth, all within the intent of creating a more competitive environment where providers actually have to earn consumer's business. if amazon ran health care, i believe that's what they do and that's what we're trying to do there. here is a company that sells a commodity almost twice at what others charge. we all are subject to that. so how do they do that.

and a lot of times they talk about the third place their stores provide. and they're -- and people -- it's what's behind the experience that most impresses me about starbucks, operational excellence. they've made science out of running their stores of extremely high level efficiency. because of their emphasis, you rarely hear the company discuss operational metrics, contrast

that with most health plans, primera are in that group. we focus on that like average speed of answer or claims turn around times. you'll probably never hear starbucks talking about grinding beans in 30 seconds or less and yet we hang our hat on that every day. yet without this foundation of operational excellence, starbucks could not produce such a predictable high quality and yet personalized experience you can get your cup of coffee at any starbucks anywhere in the world and the experience will be exactly the same every time and in every location. the only thing that may differ is the language that's spoken. let's compare that to health care, when it works, when lives are saved and well being enhanced the experience can be nothing short of amazing but too often it's best or frustrating

at worse. a major drive behind these experiences is the major lack of standardization. the variation and care, patient's receive is tremendous. it isn't unusual for and most of the time they'll get exactly that, another completely different opinion. this will often occur even with two doctors in the same institution. for a health condition rief with such emotional and physical burdens, patients should not have to struggle with the confusion that leaves them wondering if they're truly getting the best therapy for their problem. so as part of the future, we envision, we're working with the seattle cancer care alliance, comprised of seattle children, the university of washington and

fred hutchinson cancer research center. their international leaders and we're working to ensure that our members get consistently the best care recommendations for their particular form of cancer from a team of true experts. along the way we're partnering to provide members with an advocate who will ensure that all of the patient care needs are met in a way that suits them. that way they and their families can worry less about the process and focus more on themselves and their own well being. standardized, yet personalized health care, starbucks style. we would contend. another area in which starbucks excels is convenience. they have more than 24,000 stores worldwide, starbucks is practically everywhere, in a sense they bring the starbucks experience to you. if starbucks ran hillary

clinton, i'm certain they'll make health care more personal and convenient as well. this act of -- the act of providing care to patients would be the same, no matter where the location, but the experience would be tailored to each individuals, patient's needs. that's where we're starting to do. for our members with the greatest need, the 5% of our members who account for 50% of the cost, jd highlighted that in his remarks, we partner with a special team of providers who bring services directly to those patients in their homes and on a scheduled taylored to their needs. doctors, nurses, behavioral health specialists, all of them are ready 24 hours a day to help our sickest members get exactly the care they need when they need it. that's what convenience means in health care what that translates into is a better.

so i hope from there you can see it's easy to imagine a convenient locations. so finally, my third company to profile here is microsoft, a company that's been privileged to serve for more than a decade. not only do we provide their health coverage, but we actually main tan an office on their -- maintain an office on their campus. so we're literally a part of their unique and very powerful culture. so i think governor had a quote from bill gates, i would like to share one, as well. when i think of microsoft, i think of empowerment. over 40 years ago, bill gates famously said, his goal was to

put a computer on every desk and in everyone's home. in achieving that goal microsoft powered computers have made consumers and businesses vastly more productive and efficient. in my view, health care needs and microsoft like movement right now, particularly in developing tools that enable better decision making and better delivery of care. in health care, we're but riburd in data. doctors lack the information necessary to empower them to clearly understand their patient's needs. . we gave a tool to to dramatically improve the care they receive. it's called one view and it aggregates all the members claims and medical information from the emr, reviews it for consistency and analyzes any

gaps in care that may exist, like prescribing irregularities. that is to the doctor, in the exam room. this powerful interpretative tool eliminates the potential problems that can arise when a patient's care is fragmented among variety of providers. it gives each of them a complete view of that patient's history. in the process it empowers to provide best possible care possible driven by the power of protection. in conclusion i will say this, amazon doesn't run health care and probably doesn't want to, starbucks and microsoft probably feel the same way. but the fact is, health care needs these awesome companies and needs the same kind of transformation that they brought to other industries.

i think as you're hearing today and hopefully have for me as well, many blue cross blue shield plants are working to make that happen. thanks very much for your time. >> so you can see jeff has the vision in drive and i think humility to bring the best practices from these other industries into health care. now, it's my great pleasure to introduce reinhardt. many of you know is the james madison professor at princeton university where he's one of the most popular and respected professors. he's original thinker. he has served as an adviser to the clinton white house, maybe, again. the world bank, the physician payment review commission now

known as med pack. the va, hhs and many others. he continues to inform policy as frequent speaker and guest blogger for health affairs and also appears in the "new york times." he's the longest serving advisory for member and it's really be my great pleasure to be working with him for over 20 years now. >> nancy, obviously, make sure they have the garden party, that's my role. i want to talk about value because what i learned from the speaking surrogate and the bloggers fear is that we're moving from whatever we weren't doing towards value. that's the future of american health care. now, the -- it's true if you reached my age. we've had some by which we

marched in the 80s it was the strategy. to 30% of american health care is a way managed care must have had some limits in doing it and doing what it's suppose to do and now it's value. now, my wife and i are both immigrants, english is not our first lang. it's natural for immigrant to inquire to the meaning for english wards. we all do that as immigrants. now you can look it up. you obviously have an ipad at breakfast to look up all these words. so leads me to this talk.

>> when you go to concert, you'll hear about valued health insurance, valued purchasing, valued pricing, value maximizing, innovation for value. the value chain in health care and then you could make your own concepts.

you can put any in the value integration sounds good. value pa value -- i haven't a clue what that means, however, like any professor, i could probably give a good 45-minute lecture on the topic. and i'll do that. i saw this on the web of course i wanted to look at what is the value chain. this is it. you find this on the web. i haven't a clue what this means. the people who drew it didn't either, obviously. but they thought it was worthwhile putting on the web. the patient isn't even in there, as you may notice. this is not patient center. i'm thinking of conference called value, value. because if it is really true that so far we've never moved to value in health care, who should be taught how to value, value

and you could have a good conference around that. it's some clue. so -- i sort of went back, because i'm an economist and we concern ourselves with value a lot. it's really about half of what we teach people, so when you actually do that, it goes back all the way to -- you'll find in the code, which is the chiseled in there, 1,700 bc, you will find fee schedule and it's value based. there is a fee schedule and it's value based and it said, if the bab loanian patient -- -- what a weird fee schedule and you look

at new jersey, that's exactly how we price pead attic care. >> it's the code. so some things last. canada doesn't do that, by the way. >> plano wrestled with this. adam smith, david, all of these great guys in the 19th century wrestled with it. and now, of course, we know the answer, we teach it correctly. but they had it wrong. they made a distinction, e -- between value and use, what is the thing worth to me or to you and value in exchange, how much money or other stuff do i have to get -- give up to get this thing that i want. it's another word for christ.

adam smith, all of these people could not really figure out why are there two concepts of value and how do they relate. actually, nowadays quite simple, if you all had this one or two, if not, shame on you. we have a demand curve, which is really the value curve. those are the maximum bit prices different consumers would be if push came to shove. and you have a slight curve and where the two curves cut. that's value in exchange. that's price. but up there, i have value in use. jones would have paid a lot more for this thing if push had come to shove on ebay, but because you can go to macy's, you get this stuff cheap. generally, i never bought a shirt that was actually where the value in exchange was e kwul to my value in use.

you go there and they say it's on sale. i didn't know. and you get 20, 30% off but you would have bought it at full price. that's a surplus. it's a psychic prophets consumers get. it's not taxable, which is one of the, you know, i think donald trump would like it. what complicates value in hillary clinton is that very often the people who get a procedure, like an epi pen or any procedure and not the people who pay for it. there's a real difference there, what is something worth to me. what is it worth to me that somebody i don't even know gets in jail. that's exceptional case. so it's very very complicated to know what does value actually mean and whose eyes should actually be making that

determination. did you ever think about what does that actually mean? i mean that really came up, most of the people benefitting for it, were actually poor people couldn't pay for that. so there -- any such drive, you run into this problem. now, we have management consultants who know the answers to things professors don't which is why they can charge so much. when you read what they say value equals out come over cost. when you don't think about, which is obviously the safe thing to do, that makes sense. when you think about it and economist and says that doesn't make sense, because costs never figure in value, what something is worth to you is independent of the cost. you never ask how much does something cost.

never do cost enter value considerations in economic theory. the multi conventional, we can solve that, by the way, harvard professors this book redefining hillary clinton, michael portal. he has it right on page 5 that value is out come over cost. that's where i get this idea and right there i'm quoting it, page five, of the book and the whole book is about value. now, one of the problems at this dimensional thing, we can solve this by converting out come into quality adjusted life years. if you don't know what this is, i mean, basically it's -- it

says you have an extra life here but it may not have quality. how many gives you ten more calendar years in a not great health status. then you ask people, how many years of that life would you give up to have only really healthy here. if that person says, actually i give up three years to have seven really healthy years, then that life in the less than perfect health status is quoted than .7 of healthy year. this is a concept one dimension that will that takes quality of life and life expectancy into one number. so you could solve this problem and i have that this is the

consultants equation, value equals the number of quality procedure yields divided by the cost of that procedure. are we happy as economist, the answer is no. we're always complaining. my second problem is that cost should be in there. what you could do with this, we go back the latin. i don't know if the romans actually spoke like that, that's all i can do. this thing is worth what you can sell it for. cost isn't in there, right. whatever i can get for something that's what it's worth in the market. so let me now turn to this expression around and put it on its head. in economics you don't what it means, invert it see what it means something then. if you actually do that, you get what is known as the cost

effectiveness ratio. what is the cost per additional procedure advises you, which is all i did was take the management consultant's definition and put it on its head, inverted. when you do that, imagine a procedure that gives you three additional quality adjusted light years. it cost $150,000. now, ten years ago you would have said you're dreaming, nowadays that's normal thing, right, that could have specialty drive. that costs that much. what does that really tell you, is that value? i would argue, unless i know what quality is woort, this expression doesn't tell you anything at all. what do you do with it. if i turn it on its head, then i learn that her quality this

procedure costs me $50,000. does it tell me what it worth. it tells you what it costs. whether or not you want to do that procedure depends on what it is worth. in the u.s. we would absolutely do it. in some poorer countries we would say, no, we're not going to do it. even in england about that. so the management consultant's definition of value tells you nothing about value, that's the -- some of it. you can sometimes use it that if two procedures have the same costs but one gives you more quality than the others. you can see the one with more quality is more valuable, but you don't know how much more valuable because you don't though what the quality is worth. we americans if i asked in this room, if i asked in this room, i really should just to torture

them. first you'll say is it mine or someone else's, is it a democrat or republican. in this town, surely you would ask these things. there were these doctors who wanted to use that expression to say, what is the high value and low value procedure and i said, these doctors are just dead wrong. they shouldn't even get into that. in fact, they shouldn't listen to management consultants on this point. now, why are people confused where the management consultants actually are thinking about a process of comparing costs of value. they don't define value, just to think about how would i go about this as i just did, two procedures, same costs, different qualities. or two procedures, same qualities, but lower costs for

one. that's what they're thinking of but it's not value that thigh ear giving you. the real problem that we face and the next one i think i will click over. what we really like to know is the met value that the procedure gives you after cost. that's what these consultants are after. the best way to explain that to you is to talk about the quality, quality supply curve. the health care sector basically tells the rest of society through the insurance companies some are very cheap immunization for kids, a lot of that stuff. some are very expensive if you go more expensive cystic fibrosis drug costs $300,000 a year. you get a curve like this. of course, if you're not on the

curve, you're inefficient. that is, of course, what the insurance companies try to do to get us onto that curve. once you're on it, should you go from b to c? so you get a few more qalys but they cost you a bundle, they cost a lot. should you do that or not? the health care sector says this is what we, the health sector can do for you, the citizens. where do you want to buy on this curve and where do you tell us, uh-uh, we're not buying anymore. in england they say about $50,000 bucks. beyond that they complain and say maybe we won't cover it. in the u.s. we can't even discuss this topic. if you do, people really get angry at you. i tried this once in testimony, and i really got blamed for that, blasphemous to even talk about what a qaly might be worth.

we have swept this under the rug and so far paid for everything. that is one of the problems with what we now face with a specialty drug industry. since we don't ever want to discuss what a qaly -- what the value of a qaly is to us, therefore we can only pay for whatever they charge us. if you refuse, you will reveal to us your value or the maximum value you assign to human life. if we had said nobody at $1,000 bucks a pill gets that, you immediately reveal the valuation you put on human life. that's what makes this so difficult. finally we come to this concept of value-based pricing. that, of course, i guess we talked about this. there are several concepts of value-based pricing. one of them, people who talk

about it mean we're not paying for junk. we're not paying for stuff that's harmful to patients. we're not paying for stuff that doesn't do anything and we're not paying for stuff that's only marginally beneficial. however, we will pay extra for superior quality. that's what the insurance industry now is trying to do. the second one used by the drug industry is saying if we actually -- you're already spending money on an illness. if we come in with a drug that's cheaper, the value added is the difference between the cost you are already incurring and what we can deliver. that's a kind of value pricing. that's why it's a bad illustration for greed. all they ever did is say we're going to make it roughly the same you've already been spending.

and here's the price. as a board would they have ever voted for making a pill at $1,000? no. because at $1,000 bucks journalists will notice it. had you made it 885 they would never have noticed it. who would write an article about that? so the third concept is when you say i'm going to peg the price on what this product will do for you and the value attach to that. when you come to life-saving drugs, that's a difficult thing. how much do i assign to my life? the image i invoke to students, think of someone in the sahara desert dying of thirst. this guy is literally on his last leg. along comes a caravan of merchants loaded with rugs and loaded with water. one of the merchants takes a bottle of water, evian, and says what would you pay me for this bottle?

the dying man says everything i own. you can have all my possessions. he figures out life is more value than everything he owns. that's value pricing. the deal is done. that's value pricing in its clearest sense, peg the price on the value of this procedure to the patient. it seems to me the pharmaceutical sector isn't totally there yet at the sahara model but they have slouched in that direction considerably. i think that's a dangerous path for the industry to follow. you just look at the hearings, maybe even in this room, on epipen. the average american does not like this value-based pricing model that should be based -- you have a kid who could die unless you have an epipen. therefore, i'm going to charge whatever i like.

the very reaction against that suggests to me the drug industry is walking down a very dangerous path politically, not economically or theoretically, politically. including observation that i have is in general our national conversation about health care would be better if we used the word value less often. if we do use it, we define what do we actually mean by it, so people know what that is. fuzzy language begets fuzzy thinking. there is a lot of fuzzy thinking on the speaking circuit, as all of us know. in the meantime, i would give you this advice. if you plan to attend a health care conference, there is a nifty device that you could take with you, and it's this.

so let me end on that happy note. [ laughter ] [ applause ] >> so don't you all wish you could be in his econ class and learn all this? now for those of you that need to leave go ahead. for those that would like to stay, this is the q&a portion. if you have a question, if you filled it out, raise your hand. i see one right there. and the team will be coming around and gathering for us. to get us started, i'll go ahead and ask the first question, and i will carefully avoid the word "value" although it would be attempting to use it in this sentence, which is we've kind of had a smorgasbord here of different perspectives.

i'd like to pull it together with one question, which is as this incredible panel thinks about the future, what gives you optimism that we're really going to improve on the three measures of access, cost, and quality? i'd love for a volunteer to go forward. bob. and then mike. >> one of the most exciting things i think is the data liberation i referred to. as a doctor i remember the first time i got a report card from a health plan when i was a doctor in boston, i got a report card from tufts saying, you're a harvard doctor. you're average. i remember calling the chief medical officer of that health plan to ask for the data because it must be wrong. i can't possibly be average. i'm far above average in my mind. they sent me the data. the data actually was right. i was average on a bunch of measures they were measuring me with and i wasn't aware of and i

got better quickly. i took that observation from many years ago with me. one of the most interesting things today i'm a professor at stanford, if you get sick in california and have cancer and need a bypass surgery you're told by your insurance company, go to stanford. think about what happens when that happens. you might get me. you don't know if i'm above average or below average you know stanford is awesome. you get the data, you can do it in california, everywhere in america, doctor data. if you need bypass surgeries, four do more than 80 a year, three of them are awesome. i would go to them. but one of them is terrible. there's new data four times worse than the average risk to protect you from getting that one. one of the most interesting things i think is the idea we're going to start doing this doctor

patient matching. i will tell you as a doctor we're good at some things and not other things. if you saw me for what i'm good at, i'm awesome. the most important thing is this pairing and data allows it to happen. when i refer you, i do my best to send you to the right doctor for you, but my brain is not google and it's not a database that actually looks at the outcomes so now you can. that's something i'm excited about seeing applied. like jeff said if amazon did it there would be algorithms that would be more informed. that will save a ton of morbidity, mortality and money. better outcomes are cheaper. that's one of the coolest things about health care. it's cheaper to do the right thing than pay for the complications. i'm excited about that. >> governor? >> i'm optimistic because i believe we are beginning to do hard things. we have operated una payment

system that most in the health business have mastered. the word is optimized, which is another word i'm confident an economist could have a field day with, but they have learned how to optimize the coding and payment in the system. and therefore we get what that produces. figuring out how to change that is hard. figuring out the relationships on where people are in the system, figuring out systems like bob mentioned to actually evaluate whether a person is average or above average or below average, it's hard. we are pioneering. in the same way jeff mentioned businesses that have invented new processes, mentioned bill gates and his -- his capacity to put -- his goal to put a computer. what made that happen is the internet. we have now figured out in society how to do very hard things.

i think given the fact that we are being driven, not just by a noble purpose but by economics to do hard things there's reason for optimism. it won't happen quickly but it is happening. i think we will ultimately end up with unique health care solution that will make a better system to serve people. >> anyone else want to take it? j.d.? >> we were laughing earlier, dr. rinehart found an article of a mother who was charged for holding her baby during the delivery. it showed up as itemized bill. it was $40 -- $39 for skin on skin contact. the inefficiencies in the current system are so dramatic that it's reason for optimism. you all know it, have it in your own lives. my wife and i just had a baby. we got charged $6,000 for the audiology test. we're in a network hospital,

turns out audiologist is a out of network troll. it's the same test you and i can perform by clapping. the whole thing took four minutes and it's a $6,000 bill you get hit with. you've all had those experiences i guarantee you've had in your own family lives. it's that level of efficiency that gives us optimism. you can improve on that for sure. >> and that awareness leads to more unconventional approaches than we have seen in the past. i agree we're on the verge. that is all participants have data today and the technology. not in the -- the technology to examine the data.

i think there's good reason to be optimistic. but we have to address this. >> do you want to take it as well? [ inaudible ] >> turn on your mike. >> i think life in the u.s. has gotten better over the 40 years i've lived here. i mean, we hear all this talk about with it going to hell in a hand basket. i don't actually see that at all. i think life has gotten better and health care has gotten better. and it gets better every year, i think. there are, however, some strange things that we do which i hope will be so uniquely american. i told nancy yesterday, i'm thinking of writing a blog post. what if i took a random sample of princeton freshmen and got them drunk and at 4:00 in the morning have them design health policy?

would they ever come up with something so stupid as to pay oncologists 6% of the price of a drug they use so that the more expensive the drug they pick, the more money they make? even a bunch of drunken freshmen at princeton wouldn't come up with that. they're not that ridiculous. and you can go -- yesterday, we had four or five of these instances where in the u.s. health system, we do things that is just plain idiotic. and it could be fixed very easily, but because of the political powers of people, they don't. i hope at some point we will focus on those and get rid of this. and this out of network, i personally -- when i first heard about it, i was chair of a commission on hospitals in new jersey. i didn't believe it when they told me this. i said, no one would be this ridiculous that you could be in

a hospital in network and a doctor says you need an mri and the radiologist out of network can hit you with whatever they like. it's such an idiotic idea that you really wonder, would a bunch of drunken freshmen think of that? so those are the things that we could get rid of that would immediately make health care better for patients outside of the clinical side. i think the clinical side has much improved, although, there are good and bad doctors, good and bad professors, good and bad for everything. overall, i think u.s. healthcare, the quality is pretty good. >> so instead of going to the reverse question i was going to ask them what's keeping us back, i think we all know the answers to that. i will go ahead and start doing your questions. these are going to jump around a little bit. so i will throw them out and i will just ask for volunteers. the first one is, why is reference pricing not used for services like joint replacement

more widespread? so i guess what they're asking about is why hasn't reference pricing taken off, especially for procedures that are more defined? would anyone like to take it? >> i don't know. it makes great sense. from a policy perspective, we thought, i think, was going to take off. it's typically 400%. 400%. and when you get quality outcomes, there's great data that suggests there's no relationship between price and quality. so it makes perfect sense you could draw a line and be like, okay, colonoscopy, pay up to this much. there's supply below that price. go to it. i think employers have been reticent to ask employees to care about the price, b, potentially drive somewhere differently or, c, tell their

doctor the person they suggested they go to is above the price and have that conversation, d, most doctors when they make referrals have no idea if the person they are referring to is above or below the price. it's operational considerations that have made this policy and one of the policies that i think the princeton freshmen would have suggested. i think it makes sense. >> you know, just at this moment, there's a huge e-mail list that peter grant supports. and there was a bit tinkling match over the question, why don't good ideas scale up in the u.s.? two highly respected colleagues -- i don't want to mention their names here -- came out with the research that both sociologists, it's that you have different cultures and what works in california can't work in florida and so on and so

forth. when i step back from cultural diversity explains everything and nothing. you can explain almost anything with that. i was stunned by that, because this is a country that invented one size fits all. starbucks being an example. holiday inn, marriott, mcdonald's. we invented one size fits all in this country. no other country ever had that. we exported it to them. even universities are very similar in what they do, yale, harvard, princeton, berkeley, you name it, we do the same thing, teach the same stuff. why is health care so different? one of the explanations i came up with is because the payment side has been too accommodating. within the same city, you could have price variations of a factor of five. and yet, they all get paid. one hospital gets paid five

times as much as another for a normal delivery. and if that's the case, why would you be efficient and scale up? reference pricing is not that easily done. and it has some -- it basically says rich people can go wherever they want and poor people have to go where the low price is. it's highly controversial. the drug industry hates reference pricing in the u.s. so it's not so clear why people in florida would embrace it. but if they had to, if they were forced to by employers to embrace it, they would. they would as americans are very adaptable whether push comes to shove. but push never came to shove. >> jeff, did you want -- >> i will add one thing to that. i believe the individual market is a laboratory for things happening in health care that can be applied to the employer

market. that's for better or worse. as an example for that, there's been a lot of criticism of narrow networks. and yet, in washington when primera entered the individual network, we captured 50% market share, which told me consumers were more than willing to make a tradeoff on access for cost. i think based on the experience you have seen around the country of carriers pulling out of whole states or counties at least, there will be further experimentation with ideas like reference based pricing. i think as proven in the individual market, they will expand beyond that segment. >> mike? >> i think again, we have to acknowledge this is very hard. and it's not going to happen quickly. i think it's important to think about this transition we're in as a 40-year process, not a 10

or 12-year process. i would argue that we are 25 years into the 40 years. all that was mentioned earlier today about what happened in the '90s and going through managed care and all of that was a learning process, because we're changing fundamental business models and we're changing the way people are incentivized to do their work. whoever it was that said one man's waste is another man's living is absolutely right. so it is a mix of sociology and economics and politics and doing this is not just a matter of deciding. it's a matter of implementation. and it's very serious. so i think it's safe to say that we are transitioning, but we're inventing as we go. we're in a 40-year process and we're on our way. a lot of the stupidity that's there is -- hass to be revealed and it has to be fixed. >> that's a great transition to the next question, which is, how

will medical school residents and students pursuing a degree in health care be prepared for these transformations in their education? anyone want to take it? bob, you are the only one who has gone through medical school. >> take my class and they will be better prepared. i wish in medical school they taught us how to manage other people, how to engage a patient and influence their behaviors. what a pharmacist, nurse, social worker, care coordinator, and what's your role in that? because today, we have lots of people complaining about ehrs and the high-tech not solving that problem. and not completely fixing the communication and sharing of information such that patients get care that works well for the patient. so i think some of the things that i'm seeing is the mixing of classes in medical school such

that doctors and other clinicians are trained together. seeing many, many medical schools that i give lectures at teach data analytics, and things you learn about managing people, giving feedback, having conversations, making eye contact, all that stuff. so i think that we're on the beginning of the redefinition of how you teach doctors to work. but doctors are going to manage teams that care for patients and have to actually care differently for different patients. a sick patient needs different types of care, different engagement, different understanding and different shared decision making than a younger, healthier patient. i think there's a lot of imagination to be applied. i think we're recognizing -- many medical schools have populations that care for, we're waiting to see it. a lot more schools should be done in outpatient settings. you learn about what it's like to be a patient.

one of the most important things i have done is i spent a day with a single mother with two kids. she had a pill box with 90 different slots with her pills and a calendar that all of her doctor appointments and lab visits with her work schedule. the thing that impressed upon me is that it's hard be a patient. nobody wants to be a patient. what we ask the patients do is probably impossible relative to her living a life that's joy filled and supports herself and her family. when you understand it in that dimension, you appreciate, all the things others can do to make care better and how important the team is, but you also understand that what you have to consider what you are asking someone to do. we blame the patients for readmission or failing to achieve a clinical outcome. when you see what a patient has do when they have a condition that's hard to manage, you realize we're doing our best to try to make them suffer less and you have to rely on others. that's an important part of what teaching doctors should be is thinking about what we're asking the patient to do.

i hope -- back to the 40-year journey, that medical school is more like that than it is today. >> that's a nice transition. i'm going to call on you jd. do you envision the health care systems, plans and providers will start designing using alternative payment models that address non-clinical social determination of health, food, security, and employment. i call on you because of your program you spoke about. >> so i would absolutely agree that those, including those other categories are key to managing the cost curve over the long term. it's ironically easier, the big government programs, it's easier when you deal with the state government. you talk about sub populations, the -- we have categories of individuals, i guarantee you do in your state, where if you add up all the spend, cost education system, all the social service

departments, health care, you are well over half a million dollars a year on some of those families. again, the quality of care, the quality of service is awful. if you had to live in their shoes, it's a terrible experience. you have to go program to program. you may have seven different care coordinators across each one of those programs. it's absolutely key, ironically, it's easiest i would say with the state government programs. is it going to happen any time soon on the commercial side? i'm not sure it is. others at the table may have opinions on that. but that's certainly where it's at. >> mike? >> while i was governor, i actually experienced this. we would have several -- we had many families, and we knew their names and we -- they would have six or seven different care coordinators, if you will, or program managers. and we would put them at a table, and they would begin to talk about -- because none of them knew what the others were

doing. and i do think, particularly in medicaid, that we're very close to seeing a point where medicare, particularly payers who are managing this or providers who are managing this and being in some form at risk are going to ask to have the ability to bring -- we're talking about transportation. we're talking about work. we're talking about in some cases juvenile court. there's a lot of different services that could be wrapped up and served much, much better than either the state or the medicaid providers now is providing them. now that they have a financial stake in it, i don't think we're very far away from seeing people being willing to do that. >> great. somebody submits this question. i did not hear the panel discuss two important topics, prevention and wellness and non-clinical cases. i think we just covered that.

let's focus on the prevention and wellness. does anyone want to talk about the role of prevention and wellness as we look to the future? >> well, i think, obviously, prevention of illness means you just buy more quality adjusted life years than you would otherwise had, which is a good thing. but people who think that will save money or lower health care spending in the future, almost all the research i have seen says, no, that it won't do. in fact, people will live longer, consume health care more and in the last five years they will rack up a huge medical bill anyhow. the idea for preventative care being a solution to the cost crisis i would reject from all i have read. the idea that you get more quality of life years is a good

thing, which therefore i support the idea of preventative care. some of the wellness programs in corporations remain controversial, bob. i don't know what you know. from what i read in the literature, sometimes it works. i think johnson & johnson was said to have a very good program like that. others had not such good experience. maybe you can say. >> yeah. i agree with your summary. the problem with wellness and prevention is that it works sometimes. so in this room, some of you right now, if i talked to you about changing your diet, would you be intrigued and then you would. and you would -- for some reason, you would remain in the new diet forever and you will be healthier.

most of you when i talk to you about how to change your diet will politely nod and try tomorrow and then go back to what you liked before. because that's what you like. there wasn't that moment in your brain where i rewired your neurons and changed your levels enough to make you stick with it. then if i spend $800, like employers do to get you to be more well or prevent something from happening, that money is wasted. you weren't susceptible to that change. all these programs suffer with engagement curves that always start with a flurry of balloons and contests to get employees to start something. if you look 12 weeks out, you are lucky if you have more than 3% doing it anymore. when you say, what's the value -- what's the cost savings that come from those people doing that, it doesn't pay for the program. that's what the data says. for those who do, they are transformed happy people that are tell you you should do it

more. you get the perpetuation of programs that aren't that effective. we can't figure out how to make anybody's behavior change. we haven't cracked that code. nothing is as engaging as facebook or candy crush. until we have health care wellness and prevention programs that are like consumer products, they are probably not going to be cost-effective. >> i once read a story about a patient whose doctor gave him advice of prudent living. in the end, the guy said -- the patient said, i'm willing to do all this stuff, but will i actually live longer? the doctor said, that i don't know. but it will certainly seem longer. >> mike? >> consistent with that, i will just say two things. one, while i was secretary of health, the best i can calculate, we spend $600 million trying to affect in a positive

way obesity and to change people's habits. actually, mid term through those programs, they were discontinued because we couldn't see any particular gain from them. second thing i will say is that some nights -- months ago i was in an airport. it was about 10:30 at night. i had my plane delayed three times. the only thing that was going to fix it was a big mac and fries. i got to the counter. i felt this wave of anger come over me because someone had -- it was in a state where they required there to be not just the price but the calories. and it interrupted -- >> working for your health. >> it changed my behavior. it didn't cost $600 million. i think there are things that society can and should and will do. i think that efforts we're

making to begin to connect premium pricing with various health measures beyond tobacco, i think it's a positive thing. because it is beginning to change -- to make people aware and to change behavior. >> let's turn to medicaid for a moment. what does the future hold for medicaid expansion under a republican or democratic administration? what are the prospects for paul ryan's proposal and what would it mean for states facing budget pressures? anyone want to tackle either the need for medicaid expansion or the likelihood of it? jd? as our medicaid expert. >> goodness, tennessee is a state that our governor champions medicaid expansion but it was not embraced by the legislature. we're big proponents of it. our mission is providing health care to tennesseans. it's the right thing to do.

that said, there are real challenges for the states with these programs. everybody knows it. they are massively cumbersome, fiercely anti cyclical. when your economy goes down, the programs tend to swell in enrollment. states can't print money. we see it time and time again if you look over any long period of time. states get in trouble with these programs and they end up having to do terrible cutbacks. we're big proponents of the medicaid expansion, but there has to be innovation, more flexibility to do it fiscally responsible if they're going to be stable, if they're going to serve the populations they need to serve. >> anyone else want to take it on? no? all right. we will have one more question on the aca and that is, as you look forward -- bob, you did a great job summarizing some of the great things that the aca has done.

when you look forward, what about the stability of the exchanges and remedying some of the problems people are seeing with it, especially when we have such a divided country and the view of it is so mixed out there? of course, we have a very divided congress as well. trump, clinton, it doesn't matter. we're in a very divided way. what's going to happen to the future of the aca? mike, you are so brave. thank you, governor. >> again, i think we have to think about this transition we're in as a 40-year proposition. and there will be ongoing iteration for that entire period. and i would doubt there is a congress in the next 15 years that will not have substantial work to do in the context of continuing -- continually iterating this process. there are philosophical divides we confront. we won't know how that will play out in this next cycle until after the election. but i think it's important to acknowledge that many -- there is progress being made. there's an argument over whether

that was because of the aca or because of the unintended consequences of the aca. but we're moving it forward. we had the optimism conversation earlier. that's why i'm optimistic. >> can i get just in there? then i will come to you, bob. >> i just comment that very few things are ever written once and never changed. perhaps the ten commandments. when the aca was crafted, i don't think anybody thought republican or democrat that it would never be edited again. that it would never be tweaked, modified, improved. there's been no other piece of

public policy in american history that congress hasn't actually over time evolved and changed. so i'm hopeful that we will get to a point where we do make constructive improvements to the aca, because you learn as you implement a law and see what happens in the economy. you learn how to make it better. i'm hopeful we will begin to do that and stop rancoring about whether we should have it and get on with the 40 years of making it better. >> there are two calculations, one is political and the other economic. in this town it's generally the former. in jd and my world it's on the latter. we have to think about the financial aspect of the aca. i think while we're on a 40-year journey there are harsh realities coming absent changes that bob described. as health plans, we're faced making those decisions and those will come very fast. very soon. for instance, in alaska, we're the last carrier standing up there. everybody else pulled out. absent a $55 million appropriation by the legislature and governor there to establish

a reinsurance pool for high risk individuals, it's likely there would be no carriers in the marketplace. that's in part because the market is so small. alaska is unique in that regard. but because there are a lot of loopholes in the law, too. again, to the extent improvements are made, that's a place they need to happen. i think that scenario is playing out all over the country. you see companies making that calculation about whether they can be profitable in the individual market long term. or even short term, frankly. i think there's aspects of the aca that could be in jeopardy in the next few years. if there's insufficient movement in this town. >> jd? >> let me emphasize one point jeff made. april 2017, that's when most of us submit our bids for the next calendar year on affordable care act. that's not so many months away.

in most states, the blues are the only plan left or one of a few. it lost over $6 billion on the marketplace since they went live three years ago. there are some real fixes that are needed. we don't have much time. most of the ceos in the blue system or anywhere in the system that i talk to are saying, maybe one more year is all i can hang on. which means some of the fixes need to be quick in coming before the april 2017 date. >> we're going to give you the last word on this. >> yeah. unfortunately, a lot of demagoguery around this, against the insurance industry. the fact is that if you have a commercial insurance industry for profit, not for profit, it doesn't matter, and you tell them by regulation, you have to charge the same premium to people -- to applicants whether they are very sick or very healthy, that is a nightmare

from a commercial point of view. in fact, it cannot work. how do we know this? well, we had it in new jersey where we had community rating for the individual market but no mandate to be insured. that market pretty much collapsed. there was an article that demonstrated that. new york had a similar thing i think in the end per month it was $6,000 per family. only very sick people. people have to understand that unless you can force healthy people into the exchanges as the swiss do and the germans do and the dutch do, unless you can do that, this system is very fragile and unstable unless either you are willing to raise substantially the federal subsidies to the insured, because most of these people will be sick people and the healthy won't be in there.

secondly, think of a re-insurance mechanism that works better than what we have. the swiss have that. it's not perfect but it's better than ours. the germans have it. the dutch have it. here we are litigating over the risk corridors. in some way, sabotage of what we have. secondly, the mandate is too weak, even though we have this age ban. you want to go from 3 to 5. i don't know how much that will do for you. it's a tricky thing to have community rating, as that's called, with a very weak mandate and sort of somehow blaming it all on greedy insurance companies i think shouldn't be done. because it doesn't go to the problem, the insurer really faces. >> that's going to have to be the last word. you all have been an incredible audience to hang in here to the end. look at all these questions that you submitted. we weren't able to get to them. i do have a couple of thank

yous, if you could wait. i would like to thank diane black for sponsoring the event. i would like to thank my team, katherine, katie, carolyn, kate, kristin, they have done a terrific job. most importantly, i would like to thank our amazing speakers. please join me in a round of applause for them. [ applause ]

c-span's washington journal, live every day with news and policy issues that impact you. and coming up this friday morning, the chair of the tea party patriot citizen fund jenny beth martin will join us. she'll discuss the party's endorsement of donald trump and and lily garcia, president of the national education system will be on. she'll talk about the

presidential campaign and educational policy. be sure to watch c-span's washington journal live at 7:00 eastern friday morning. friday evening, we'll bring you oral argument from the supreme court as they consider alleged racial bias in a texas death row case, buck v. davis. our road to the white house coverage continues in wisconsin where paul ryan will join donald trump on the campaign trail saturday. we'll take you to the party fund-raiser live at 3:30 p.m. eastern, also on c-span. america held its annual convention last month outside of chicago. this is about an hour and 15 minutes.

>> you know what i loved the most about muhammad ali? he would look you dead in the eye, with a straight face and a smile and tell you everything that you believed was absolutely wrong. he would challenge every social norm that he thought was unjust. yet by the end of it, you couldn't help but love him nonetheless. very few people have that talent. may allah less you, muhammad ali. my next speaker is no stranger to controversy. he's a current resident scholar at memphis islamic center, he's the dean of academic affairs, i speak of none other than, of course, a prolific commentator on political issues, which is very germane to our time.

he went to the islamic university in saudi arabia, where he got his bachelor's in hadith studies, then he went to yale and got his ph.d. in islamic studies. but more important than any of that, more important than anything i've just said, yasir qadhi is only our speaker today that has his own barbecue sauce named after him. if you go to tom's barbecue in memphis, tennessee and ask for this sauce, it's kind of on the spicy side, but it is delicious. ladies and gentlemen, yasir qadhi. [ applause ] [ speaking foreign language ] >> it's such a pleasure and

honor to be here. people come up to me to take selfies and pictures. i pass by them in the hallway, and i went up to them and i said, people come to take selfies with me, but i need to take a selfie with you. years from now, when historians and political analysts are going to analyze the strange rise and eventual fall of donald trump, when they're going to discuss how he lost resoundingly in the november 2016 election, they'll say that the turning point in his popularity, the beginning of the nosedive that caused him to disappear from public life, was the powerful and emotional speech by khan. mr. trump, mr. trump attempted

to derive an islam phobic fear, but i swear by allah, her dignified silence on that democratic convention stage, and her calm demeanor was far more eloquent and powerful and poignant and profound compared to anything that donald trump has ever uttered with his mouth. and the message that all of us learned on that day was very clear. america, never underestimate the power of our uncles and aunties. you know, speaking of trump, unfortunately i have to speak of trump. he's on our mind, he's in our nightmares for the last year. speaking of trump, last month over 50 senior republicans published a letter in "the new york times," asking their fellow

americans not to support their own party's candidate. imagine that. senior republicans are saying, don't support trump. but you know, i have to be honest here, the republicans only have themselves to blame. for the last few years, they were the ones campaigning relentlessly against obama, against immigration, against people of other faith, against people of other color. for years, they did everything they could to be racist and xenophobic. and the result was that they succeeded beyond their wildest dreams. they riled up the masses. they fomented hatred to such an extent that even main stream republicans seemed to meek, too passive to fulfill the mobbed craze rhetoric that they had spawned. and in that environment enter

donald trump. being the shrewd, bombastic businessman that he is, clearly understood that he could up-end the republican party by playing their own game and bettering it. he verbalize what main screen republicans could not. quite literally the republican party and the far right created the very frankenstein in donald trump that is now destroying them. i have a message for all republicans, especially the far right. you claim you want to take your country back. you claim you want to make america great again. well, perhaps you should start by taking your own party back from the radicals and bigots like donald trump who have hijacked it. and yes, while there's a lot that can be said about the sharp right turn that the republicans have taken, let us be fair, as

allah commands us to be fair. and let us be just, even against those whom we like or don't like. the fact is, there's quite a lot of blame to go around. and the democrat have their fair share. this is president barack obama's last year in office. and we all remember, i remember the hope and the excitement that we felt when he was elected to the highest office in the world. it made us feel so, so optimistic, so passionate, and i can't help but recall how excited and happy i was, when the very first bill that president obama signed was the executive orders to shut down guantanamo bay. well, eight years have gone by. and guantanamo bay remains open as we speak. for many of us, guantanamo has become symbolic of the stalemate of politics, of the fact that

names and faces might change, but policies rarely do. you know, i'm appreciative that we have the secretary of the department of homeland security here. but facts are facts. in the last eight years, the patriot act has been renewed, unsupervised wiretaps and government surveillance has increased. the entrapment of dozens of young, innocent men and women via the fbi's evil entrapment program has increased. the situation in the middle east has spiraled out of control. and worst of all, the immoral, unethical, counterproductive tactics of drone strikes, which has caused untold civilian deaths, has increased more than tenfold. last month's issue of "the atlantic," one of the most main stream magazines of this country, last month's issue had

a cover story that highlighted the fact that after 15 years after 9/11, we have spent over $1 trillion on this supposed war on terror. and yet the magazine concluded far from making our country safer, we are actually less safe than we were 15 years ago. the fact of the batter is, the threat of islamic radicals overtaking the country or even terroristic plots have been exaggerated to the point of ludicrousness. more americans die from furniture accidents than radical jihadist attacks. and yes, of course, we criticize even one radical jihadist attack, but we don't spend $1 trillion trying to correct furniture. we don't invade sweden demanding

that iki aproduce furniture to our specks. we're far more likely to be killed by a rogue policeman who pulls us over for a traffic violation than by a radical jihadist. mr. president, we elected you on the promise of hope, on the promise of change. many of us believed in that promise. many of us believed when you said, "yes, we can." i'm sorry to tell you eight years down the line that instead of hope, many of us feel even more despair. instead of change, the status quo remains or perhaps has even gotten worse. but not all hope is lost, mr. president. you still have a few months left in office, and i know that i speak on behalf of millions of people around the world when i say that you can still leave a positive legacy. you can still leave a positive legacy of your presidency.

you can still leave a positive legacy in the books of history. but you're going to have to do some very, very -- mr. president, close down guantanamo bay. mr. president, scale down the drone strikes. mr. president, help the syrian refugees. support the rights of the palestinian people to live in dignity and freedom like the rest of humanity. our scholars mentioned that when it comes to political power and stability, allah values justice even more than faith. that is why a just society, even if it doesn't have faith, will be blessed in this world with strength and might and a muslim society that doesn't have justice will not be blessed with that power. there's no doubt, and i say this as a critic, there's no doubt that our country overall has many strengths and freedoms. the freedom to criticize even as

i stand on this stage. and we appreciate those freedoms. american muslims, if you ever feel that the situation is too depressing, all you need to do is to look over the pond and see the european scene. we thank allah that we have freedoms far better than our muslim brothers and sisters in europe. i'm still trying to digest the burqini bans from france. these rules said that the burqini is liable to offend the rele religious convictions of some people. the same country that insisted on the right to offend prophets itself is offended by the modesty of a muslim woman. another point must be made here, in any other context, if a group of men surrounded a woman and forced her to take her clothes

off, they will be labeled as delinquent bullies and hooligans. i have a message for the french politicians and police. simply because you wield power and you have the law behind you, simply because you're wearing police suits, it makes you no less of a bunch of hooligans and rowdy thugs when you surround a lady and force her to take her own clothes off. shame on you. shame on you. shame on you and your hypocrisy and your shallow claims of being vanguards of liberty and legality and fraternity. but you know what? enough of grumbling and complaining, that has a time and place. enough of the islamphobes. the koran mentions the two greategreat est blessings that any society has, food so that we are not hungry, and safety so that we're

not worried about civil war. american muslims have, by and large, by and large, these two, far better than all other lands. here we are in the best ten days of the year, in the ten days, as the pilgrims are gathered. here we are in these blessed ten days, and i remind myself and all of you that let us think of the plight of muslims around the world. look at our brothers and sisters in syria. see what is happening in myanmar, in so many muslim lands. our brethren go to sleep worried about bombs and wake up worried about where to get their feed. so we thank allah for all the blessings he has given us. and i strongly disagree with the sentiment that some people have that they're always complaining about the times we live in.

recently i heard somebody moan and say this is the worst time to be a muslim in america. i disagree. in fact, i believe this is the best time to be a muslim in america. there's never been a better time. do you know why? it goes back to the theme of this convention. navigating challenges and seizing opportunities. we are facing colossal challenges, unprecedented challenges. and it is a struggle navigating our way through those challenges. it's a struggle to always try to find opportunities in the problems around us. these days, we are constantly having to struggle to maintain our faith, to struggle to express our faith. to struggle to defend our faith. in fact, it is a never-ending struggle to overcome the islamaphobia. but in that struggle, we feel a renewed passion for our faith and renewed commitment to our cause on earth.

in that struggle is our continuous attachment to our lord, our prophet, our book, our message, our call, in that struggle, we find meaning and purpose in our life. and you know what, brothers and sisters? i've been using english way too long, because arabic has a word for struggle. and the koran has a word for struggle. do you know what that word is? do you know what the word for "struggle" in the koran and in the arabic language is? it's a tabu word. it's a word that has been hijacked by a small minority within our own faith and criminalized and sensationalized by the outsiders of our faith. but i don't care about those two extremes. because the word is a koranic word. it is a noble word. it is a pure word. it is a blessed word. despite the extremism of the radicals and the smear campaign of the bigots. it is a word that has been

praised by our lord and our prophets, and our religion. so i for one ask allah to make me of those who do not fear the criticism of the critics and do not care what others speak as i speak the truth. so i will speak my mind. the reason why i love being muslim in this difficult day and age is because i must constantly engage in jihad. there, i said it! i said it. let me say it again, because i must constantly engage in jihad. in fact, fox news, where are you? in fact, i stand before you today, fox news, are you filming? i stand before you today and i say in front of the largest gathering of muslims in north america, i openly, brazenly, unabashedly call for a struggle, a jihad. and i ask all of you to join me in an american muslim jihad. [ applause ]

but what will our jihad be? well, for sure, it's not going to be the pseudo jihad, the false jihad of violence and bloodshed, of isis and al qaeda. that's not jihad. that's chaos. that's evil. that's not jihad. the jihad that i am calling us to be part of is a koranic jihad based upon the prophetic methodology. our jihad that i want all of us to join -- are you listening, donald trump? sean hannity, take note. our jihad will be to respond to your evil with good. our jihad will be to speak the truth, even if you lie. our jihad will be to behave with dignity in the face of your crudeness. our jihad will be to counter your ignorance with education. our jihad will be to respond to

your bigotry, your hatred, your islamaphobia, with love, kindness, and compassion. our jihad will be to stand for justice, to fight alongside the oppressed. to preach the truth to power, especially to preach the truth to tyrannical power. because our prophet said that is the greatest jihad. our jihad, brothers and sisters, will be in attempting to make america great again by being true witnesses of allah on this earth and by demonstrating to the world who our beloved prophet was. are you going to join me in this noble jihad? [ applause ] let me take that up one level and i'll conclude. they don't like the word "jihad." we have to reclaim it back, because it's our word and it's a noble word. there's another phrase they don't like. there's another phrase that has also been hijacked by the

extremists within our own faith but we main stream american muslims have to reclaim the phrase, because it is a koranic and islamic phrase. that is the phrase that we say when we're happy, when we're excited, we praise allah and we announce to the world that nothing is more important, more holy, more grandiose, more belosed to me than my creator. and we say from the depths of our heart, allah akbar. it's supposed to inspire courage, not fear, nobility and virtue, not injustice. so we have to reclaim that phrase, so when i ask you, are you going to join this american jihad, i want you to respond with something that is going to be heard from shining east to shining west, that will shake the halls of this very

convention center, that will send a loud message to all the bigots that we are not scared to be who we are, that we are not scared to claim we have no loyalty and no fear of being muslim who want to worship our lord and be a part of this country. will you join me in this jihad? louder, louder. you can do better than this. one last time, and i want the halls to shake. [ speaking foreign language ] [ applause ] >> our next speaker is someone who spoke at many events, and someone that i have gotten to know over the last 2 1/2 years in my time. she's incredibly inciteful and a

foughtful person. she's a director of research at ispu, the co-author of the book "who speaks for islam, what a billion muslims really think." and in 2009, she was appointed by president obama to the president's advisory council on faith-based neighborhood partnerships. ladies and gentlemen, please welcome sister danya. [ applause ] [ speaking foreign language ]

>> my favorite thing about coming to islamic conventions are the conversations. the conversations i get to have with old friends that i haven't seen for at least a year. the conversations i get to have with people that i just met. especially young people. and i have had several young women come up to me during this very convention and ask me a question that i hear quite often. in fact, one particular young woman, i promised her that i was going to answer her question in my speech, that it was a longer conversation than we could have in the brief moments that i had between sessions.