going to save money, what we're saying is we're going to reduce the amount of money we give you over time and we're going to have higher expectations for what we get for that money. we're going to try to build the incentives that way. these are not cash assistance progra programs. you're speaking not to a room of poor people but a room of very wealthy people. i can only imagine what the average income is in the room or median income is in the room but i'm sure it's much higher than the national average. we really need to think about that. if we put so much pressure in the state government on other investments that the state officials would like to make, and they would love to make more investment in education, they would like to make more investment in trade and transportation infrastructure, but we start to swallow that up in health care. you have to question the value of that investment over time. and we have done our best to try to become a smaller and smaller

percentage of our state budget. we are nonexpansion state. the states that did the expansion have made a jump but they ultimately are trying to do the same thing in terms of becoming a smaller percentage once they captured that population. we've been successful for the last several years. we have combined a lot of different delivery systems into one. it is one of the funding streams that ian was talking about. we have medicaid managed care. that is the primary way we deliver services. we would love to see provider innovations. in our program we actually had a special spot reserved in our competitive procurement for managed care plans for provider-based managed care plans, owned in majority by providers. we had to give at least one slot in every region where it did a competitive bid, we had to give one slot to a provider service network. we did that. we had provider service networks bid in every state and we awarded them. there is not one provider service network in ft.

lauderdale. every other one sold in six months to an hmo. by the way that feature in our statute and procurement next year if you're thinking about forming a provider network and bidding. nice way to make money, turn around and sell it in six months. we're wondering whether we're going to see a repeat of that in upcoming me tiff procurement. all of these pressures, really need to think about the investments we're making. we really need to think about how to structure the system so the incentives are right and we're driving toward quality without being inflationary. >> thanks, justin. jodi, thoughts from hawaii and procurement system. >> thank you. as i was listening to that and some issues of cost shift, et cetera. this has come up over the past

few days, actually indirectly in one of the slides there. it was who is driving the costs. right? who is the uninsured. if you think about the medicate program, it's the hondas, the people with health challenges, much higher prevalence rates. it's poor people, face many more challenges main, much more overcome by income disparities, lack of access to fresh foods, to lower levels -- having to do with quality of education, et cetera. and so when medicaid isn't paying as much, it's also --

we're also working with some of the most -- some of the populations that have the most challenges in their life. so when we talk about the impact of social determinates and talk about impact of not funding within those areas, that's where the conversation is going. there's -- that's why there's the cost shift. it's that when you say that there are rich people that need to pay -- how much are they going to pay for the poor people, it's also what kinds of things are we going to do to invest in the so-called social determinates of health. where it is that we work, where it is that we live, where we play, how much education we have, what's our housing stability. when i first got to hawaii, i went there and they talked a lot about -- in hawaii they said, oh, we love what you did in

oregon. we love the transformation and all your work there. we really want you to do that here. i'm thinking in my head, there's no way i'm going to do -- you can't replicate one to the other. as the saying goes, you've seen one medicaid program, you've seen the one medicaid program. each state is unique. every state has its own unique trai traits. one of the first things i did was i spent time listening, what do the people want to see. one of the things that was so striking and so different from oregon is that in oregon health system delivery transfer systems led by providers, let by health systems, by the ipas, coordinated care organizations, by the managed care plans.

it was led by them. in hawaii i began to talk to people, health systems, primary care, long-term care industry. what people said to me is the thing that is most important to us is creating a healthy hawaii, healthy communities, healthy families. that doesn't come from the health care delivery system. that comes from communities working together at the local level building and addressing the needs within that community. so what do we have? we have some of the most innovative federally qualified health centers. we have a hospital and health care system that is now trying to work together to address what people are recognizing as determinates of health.

so after being there now just over a year and a half, the interesting thing is that now people are talking about social determinates of health. we're talking about how do we invest in communities, so they can learn better in school, get better employment, so they are not on medicaid. that's the goal. how can we address the severe homeless problem that we have in hawaii? in order to do that, you have to take a look at your behavior health, your substance use, that continuum of care, who is paying for it, how do you pay for it, how do you make it integrated with the medical health system. how do you partner with housing? i know more about section 8 and all those things than i ever did before. i've had to learn a whole new system of acronyms, because

housing matters. and then my poor housing people have now had to learn about medicaid. that's been delightful. so all these new partnerships are being formed. now we're having conversations with the health systems, with the managed care plans. now the question is, all right, we're focusing on social determinates of health, what's health care's role? how far do you go? they are not going to be the social workers. but medicaid and health system has a seat at the table. how are we going to play a role within that seat at the table. that's where i really see medicaid going. that's where i see the health system going in that if you're going to talk about social determinates of health, you're going to have to create new partnerships, new connections, and you're going to have to

think about how you provide the appropriate incentives. so now the questions are with the health care delivery systems, how do we align the financial incentives so we're not paying for continued sick care instead of health care. how do we pay for incentivized health and where should we be spending our money? those are the kinds of conversations that we're having in hawaii that i'm actually thrilled about, because i think that is really where the direction of medicaid is going and where the direction of the health care area is going as well. >> great. thanks, judy. so with this i want to start peppering the group with some questions. so i want to sort of start where you left off and amplify what you are saying but also come back and link in a couple of slides ian put up there. one is the chart that basically looks at any distribution you've

got, 1% of the population driving 20% of the cost and 5% driving 50. whether medicare, medicaid, commercial, you kind of see that i think it's fair to say within the medicaid world that 1% and 5% is much more expensive and much different and much more -- brings many more sort of challenges and opportunities than other payer mixes. does that then lead us naturally to your other chart where we're looking at the u.s. versus other countries where we're all engrained into this statistic of the u.s. spends far more on health care per capita than any other country. but then when you kind of add in the social services, it's much more similar, although arguably our balance of that is off. so is the key for medicaid, to

build on what judy is saying, to refashion the medical into more social, to get that correct balance and finally get at one of your last points, ian, which is -- i don't know if i would phrase it as will the rich pay for the poor but given medicaid is a government program, is a public program, and is dependent on taxpayers to sustain, how do we make this transition? ask it a couple ways. how do we change it? i'm thinking how do we also manage that change such that it is politically sustainable? by that i mean, you know, is there a political will for taxpayers -- there's a political will for taxpayers to be providing appendectomies for

people who need them. is there a political will for government to be paying for refrigerators and apartments, et cetera, on a large scale. let me stop that question and just throw it back to the three of you. justin, i don't know if you want to go first. >> the answer to that question is yes and no. ultimately when we went to a managed care model, the greatest thing you get out of a managed care model is the flexibility. they are on the hook for the most expensive intervention at the end of the rainbow, so they will do things like buy a refrigerator or fix an air conditioner simply because they have a payment actuarial sound and it makes sense for them to use that kind of purchase versus paying for that. i would think if it's in my budget as a line item to by refrigerators and air conditioners, it would be a real hot topic.

the way we've set it up with managed care at risk for the full panoply of services you can do it. in fact, our managed care associations have added lots of benefits over and above what we offer under our state plan not built into their rates because we do know they make sense. so we would be giving people services in a place that makes the most sense. i think that taxpayers in general do support the program. you have to support the taxpayers, too. they certainly don't want to feel like you're wasting their money. when they read a story in the paper about someone not getting a service they think they have already paid for and should be covered, the taxpayers get very angry about it. they also get very angry about wast. waste. you have to keep them in balance. they would support anything that makes sense in a system that makes sense where they think you're driving towards a

high-quality product. >> so i was thinking as you said that, i agree entirely with justin. i think the answer is yes and no. no, i'm not going to have a line item for refrigerator or air conditioner, but i do think. i do think we should build in a way to account for those services, managed care rate, because eventually they will go down and down and down and won't be any more savings to have. a place i like to go a little bit more differently is to characterize i do think health care and medical system needs to become more engaged and more consumer focused as opposed to

body part or provider. disease specific. at the same point, i think that it's not that we need to have a health care system that -- where we have doctors doing social work. i do not believe that is the model that i want to see or think in any way effective. i would like physicians to be more engaged, more able to actually listen and do those kinds of things, because then you get better outcomes with your health. when it comes to health, i want educators to be educating. i want that sort of social work aspect of it to come together. that gets to the point of something that we heard yesterday with the opening plenary session and that's that

it actually, one, there's no easy solution. there's no silver bullet. it's going to take all of us working together. i think that's the other point i'd like to make and that it really is about community coming together and working together. so it's not that i have the expectation that we're going to pay for the runt or the refrigerator from the health care system, it's a matter of reallocating and working together as a community to invest in what the community needs to create those healthy communities and healthy families. >> maybe i agree with that completely. i actually trained in the uk and my graduate work was in newcastle, which was a working class town that went through massive deindustrialization in the '70s. we were doing what we called

multiple deprivation scores, which was a cross-sectional look at lack of housing, education employment and so forth. health was a tiny fraction of that. i completely agree with that. i was going to tell one anecdote which illustrates if i was in your shoes an opportunity. as i mentioned i was on the california health care foundation board. we had a retreat in fresno about four or five years ago. and this city manager, young assistant city manager in one of the towns next to fresno, he and his wife had a baby and he was up in the middle of the night and he saw a pbs interview talking about hot spotting. so this guy got inspired and got the data from ambulance about emergency calls and hot spotted them. so we got in a bus with this

guy, the board and our spouses and went on a tour of all the hot spots. the first hot spot was an assisted living facility whose idea of assistance was to call the fire department for assistance any time anything happened like a patient snord they would call the fire department. next thing they were in the er. the next thing we went to was a slum landlord where there was multiple instances of kids with asthma, having life threatening asthma attacks and on and on and on. my wife is -- not old, seasoned emergency room nurse, analyst, asked how many fires do you have? he was going on 4,000 visits at $7,000 a pop, 7,000, 4,000, can't remember the right way around. ten. ten fires in a year, 7,000 of

those events. so if i was doing customer focused analytics, i would like at where those hot spots are for all the streams within the purview of state/local budgets, start with that money and figure out a better way to deploy that problem. i think it's massive. i think it's massive. i think there's an enormous opportunity to enrich lives. maybe by giving them a job or check or something else. i keep coming back. income and life expectancy, lifer style correlate. i tell the kids all the time, be in the top 1%, you'll do just fine. >> justin, is that the answer? if so, how easy is it to actually do that? >> i think it's really hard to do. that type of thing is coming.

getting that refined opportunity at the community level and putting out figurative fires, if not literal ones, i think health care is going to get more personal. the relationship, understanding of what's going on at the personal level should become greater between the doctor's office and individual, health plan and individual. i think information sharing is going to become much stronger. there's just a lot of opportunities there. we've hit the edge of affordability and we've hit the edge of affordability of all three future streams. the private pay, the state government pay, the federal pay. everybody has hit the edge of affordability. necessity is the mother of invention. there's a lot better ways to do it. at the same time we're at the point of a revolution and information that could help us get back from the break. that is where we are. >> let me just reinforce what you said. hitting the edge of affordability, the woman who runs health benefits apple told me this story, when they were

going to cost shift like usual to employees, it went all the way to tim cook who said, no, we're not going to do it. apple employs 100,000 people, 0% work in the stores. they don't make much money but they get good health benefits. it went to the top of the company. in so doing, partly because of that, partly was the apple watch wasn't selling very well, they put in a worldwide travel ban apple for nondiscretionary travel. 300 billion in a bank in ireland for god's sake. if apple has hit the wall of affordability for its employees we know it's real. >> state budgets, medicate directors know we've become an increasing part of the budget. as justin noted earlier, that can't be. that cannot continue.

we must have a change. must have it stop. i was at one of the sessions yesterday, also about public/private partnerships and investing in some of those social determinates of health. that's another area we definitely need to start seeing some of those things happen as well. but it's very much the case that we have reached the edge of affordability. i would like to note that the truth of the statement, at least in the health care industry, we talked about we're getting a lot better about, you know, information, et cetera. we're still in the -- we're still in the dark ages when it comes to that. and some of our privacy rules are that way, that make it so

hard to share data, to put those things together. they kind of work against you when those things -- when you're trying to do some of those things. it's certainly possible, but we have a longways to go. in trying to pull together. i think those are some of the challenges. >> let me build on the theme taking it a slightly different direction thinking about the future, let's talk about medicaid expansion it's self and other types of ways in order to provide insurance to people who may not have it or are in the system. so you know, justin, you are in the state that has not done medicaid expansion. you're on the board in the south region where relatively few of

the states have done it. judy, you have represented two states who have done the expansion and represent a region where not all but more have done it. what really do you think is the future of the medicaid expansion either in terms of more states coming on, states coming off, or finding different approaches to address the underlying issue? justin. >> i think we're going to have a very prolonged period of time where there are a significant number of nonexpansion states. that is going to give those -- there's going to be data. you'll have to look at the effect that has over time. i would be very surprised if florida did it in the next few years. i'd be very surprised if texas did it in the next few years and many of the other southern states. you will get this opportunity to look and see what type of impact that has on unemployment, on the

state's economy, on labor participation, on the uninsured rates and on public health. there will be basis of comparison. the one thing that has not happened with expansion states, they have not had to pay for it yet. they will have to start paying for it on january 1st of 2017. that's coming up in a few weeks. the amount they have to pay will incrementally go up for the next few years after that. the other thing that hasn't happen since the expansion, there hasn't been a recession. if, in fact, they are driving down their labor participation rates and cutting into their revenue and driving up their costs by taking on the expense of the expansion, it will be very interesting to see what happens during first significant recession in those states. i think that we will have a prolonged period of time with nonsuspension states and there probably will be a recession, perhaps even a significant one,

where we will have to see what happens to the states that expand versus states that didn't and how they fare in that situation. because as we went through the last recession, our enrollment, it's a counter cyclical program. our enrollment spiked by a million people in a short period of time. that was a deep recession. all recessions we see several hundred thousand people added to the program. costs go up at a time when it drops in the state. they have balanced budget, none can print money. that will be an interesting inflection point in the coming ten years when the recession hits for the states. we're looking at it. one thing that the supreme court did is they inadvertently created a work requirement to get insurance coverage. above 100% of poverty and then able to purchase insurance on the exchange, the cost.

in florida our minimum wage is higher than national minimum wage and have to work 303.2 hours a week at minimum wage in order to get to silver plan. the majority of them purchased silver plans with cost wraps, below poverty. still looking at you're looking at significant drop. 500,000 people in the gap below childless adults, below 100% of federal poverty a few years ago. now seems significantly less than that, less in 2014 and '15. looking at that over time and

understanding significance, keep in mind we fall into a situation significant reduction in unemployment rate and permanently 100% federally financed. >> well, on this point justin and i don't agree. which probably doesn't come as a surprise. i would use statements, what's going to happen to those unemployed, in recession, below poverty level and have no access to insurance. i've now worked in two states, both expanded but came from a

different background, in their expansions and decisions how to cover people. oregon, while they did expand in a sense they had population up to 100% of poverty level, they also capped it. so i come from the state with infamous house study. my takeaway from that is health insurance helps save lives. i did see that on a regular basis. people uninsured who did not have access to health insurance, they were foregoing needed health care. they were coming in, and you know, stories, letters after oregon expanded. there were stories written -- you know, handwritten letters to us, to me as a medicaid doctor talking about how this health

insurance saved their lives. so i approach it -- well, i appreciate the economic argument. i also approach it from a public health and from really a standpoint where health coverage and health insurance saves lives. does it have to be medicaid? no it does not have to be medicaid. that's where hawaii, the only state in the country with arisa, prepaid health act. they have had 90, 95% health insurance rates for 40 years with a much higher proportion of people covered by employer-based insurance. so yes, we did have a medicaid expansion. but it didn't impact hawaii as much as it did in other states.

so it does not have to be medicaid but i would challenge us and states and others to at least consider as a public health if we want to think about how it is you want to help keep your population healthy and have healthy communities, then how are you going to help make sure that your population has access to health insurance, especially those who are low income, below 100% of the federal poverty level. we already talked about they are the ones who tend to have higher rates or prevalence rates of substance use, mental health, behavioral health needs, of chronic disease, of living in high stress areas of low income, et cetera. so i -- so that's where i come from when it comes to the

medicaid expansion. i happen to agree with justin it's not likely that the states who have chosen not to expand, i probably believe there's probably going to be additional states that might choose to expand. i hope that's the case. i think there's other pathways to expansion and we could explore those as well. >> i think it's a very useful kaiser family foundation preset came out 4.4 million uninsured in the 19 states not expanding. 2.6 of those gap. it's clear and certainly you talk to people who have goaltenderen coverage, they feel relieved by that, so it does make a difference to people's

health. it's unequivocal, the question is can they do it. i want to underscore what they said about recession. we've had the longest expansion for a long time. we are way overdue for a downturn. that will put tremendous pressure on medicaid as both of you indicated. i think we've got to prepare our selves mentally for that. it's just asking too much for a continuous expansion. economies don't work that way. i hate to be a buzz kill in that regard. i do think what's important is finding sustainable delivery models going forward despite this pressure. i think what we all agree innovation for plans to provide services to states but also for providers i think in a lot of

provider states we have to put the arm on provider states to take care of uninsured. what we're seeing in texas cherry picking geography, that undermines of delivering on a charitable basis and we may have to legislate in some states. i think it's nuts in president. it's easier to get into princeton than get a medicaid card in texas maybe we should loosen up. >> medicaid it's bigger than france. we cover births, long-term care, a lot of stuff in between. what should it look like thinking about the future of

medicaid. medicaid has a role vis-a-vis all the payers and what you deal with. in one minute or less what should medicaid look like? what should be done to make it better and more functional. >> i've been doing this for 30 years. i've had the same answer for 30 years. there should be a basic floor below which no american falls and there should be a guaranteed delivery system for folks. i actually personally say we should fund delivery system that everyone has access to. if you want to trade up with your own money, knock your self out. but that delivery system should be paid for through tax supported financing. not a single payer system necessarily but funded delivery system. how we do that, whether we put the arm on delivery systems to take a certain requisite number of people or give people a block grant, i'm fine with that.

the deal is nobody should be left at the bottom. if people want to trade up for a choice of providers, they look at models like australian system and others where there is lots of room for people to, you know, expand service offerings and pick stuff financed through supplementary insurance provided the base program covers most people and most people would be comfortable in that quality and service of that program. i think that's eventually what we've got to get to. this categorical eligibility in and out is nuts, with all due respect. >> judy and then finish with justin. >> okay. wow. okay. i do think that the future of health care needs to become more

simplified, that we've made it incredible administratively complex. i was oftentimes aca when you talk about medicaid, we simplified eligibility. for those of us who run medicaid eligibility and had to develop medicaid eligibility systems we know that is a fundamental lie. that is not the case. that is not what happened. but if we were actually able to simplify, i'm not sure i would go all the way to getting rid of entirely the categorical probably going to continue to be some distinguishing, some tiering. at least some basic everybody gets below a certain level you need to get this basic coverage. i think that is a direction. i think for the health care delivery system, i think you're going to see -- for the medicate

program you're going to see medicaid playing a much larger role in that and partnering -- hopefully partnering more effectively with medicare in the future as well. that's a hard sell. that would be my hope on the health care delivery side of the innovations there. >> final word. >> you come to medicaid and it can be bewildering. we have tried to place the enrollees at the center of the system. as they come in, they have a set of maybe four or five very clear choices of health plan with different service packages. we tried to create a session where they compete for business based on benefits they provide, based on the customer service they provide, based on the networks they have put together and various other times the plans compete based on price as we make decisions around bringing them in. but that's what we -- we're trying to set up a system where the consumer is at the center of it and plans competing based on

price and quality and consumer satisfaction and they are competing for enrollees. enrollees at the center of the system. i think providers have a place there, too. we still encourage providers to develop these systems either as subcontractors to our plans or to develop their own plan and to eventually become fully at risk and to innovate. ultimately it has to be about the patient and has to be about the consumer and they have to come in and feel like they are in an understandable system that is going to successfully meet their health care needs. >> all right. i'm happy to end on that note with apologies to the panel because i had not vetted that question before hand. did that remarkably well. join me in thinking ian, justin and jody [ applause ] >> i thought that was fantastic. we're going to take about a 20, 25 minute break.

the breakout sessions will start at 11:00 in the usual rooms over there. we're back in here at 12:30 for lunch and closing remarks by vicki. thanks, everybody. wrapping up the morning portion of this medicaid and health care conference. we'll be back at 12:45 eastern for a look how it changds over the years. one of the speakers will be the director for the center for medicaid services. you can watch both of the conference pieces later today in c-span library, go to c-span.org. election night on c-span, watch the results and be part of

a national conversation about the outcome. be on location of the hillary clinton and donald trump election night headquarters and watch victory and concession speeches in key senate house and governor's races, starting live at 8:00 p.m. eastern and throughout the following this-of- 24 hours. watch live on c-span, on demand c-span.org, use live coverage using c-span radio app. coming up tonight on american history tv, victory and concession speeches from three past presidential campaigns starting at 8:00 eastern, 1980 election. president jimmy carter's concession speech and ronald reagan's victory speech. at 9:30 george h.w. bush, bill clinton and ross perot's addresses in 1992 and zero election president bush and al gore's speeches. we'll also show you programs on presidential leadership and 1729 debate over official title for george washington and subsequent leaders of the u.s. all this

coming up tonight measure history tv on c-span3. we have more now on health care as doctors, hospital administrators, medical industry executives and technology developers talk about database collaboration for health care researchers and practitioners. please welcome executive editor of u."u.s. news and worl report." hi, welcome, everyone. welcome to fourth annual u.s. news best hospitals hospital of tomorrow forum. actually we have taken a great big leap forward after consultation with many of you, we decided to expand the conference framework to better reflect today's dynamic health care industry. we're now calling this event health care of tomorrow.

the new name underscores commitment to developing a robust continuum of patient centered care. that's no surprise to all of you. as hospitals have become hubs of vast health care networks that reach into many corners of the community from ushlgent care clinics to ambulatory care facilities to nursing homes and rehab centers. our gathering here reflects that. as you evolve, we will evolve. another exciting change we've made. children's hospitals have long been a focus for u.s. news. this year we've created separate children's hospital track. we've also established children's health care of tomorrow advisory council and we thank leader for new pediatric spotlight. we'd like to welcome hospital executives who are speaking this week. they hail from the children's hospital of philadelphia, cincinnati children's, children's national, texas children, stanford children's

and nationwide children's, among othe others. advisory council made up of experts from top adult hospitals, thanks to them for their insight and suggestions. we'd also like to offer very big thank you to premier sponsors of the event. athena health, microsoft, siemens. i'll be your mc over the next couple of days making sure trains run on time and that you all are aware of many sessions and networking activities you all can participate in. now, just a couple of housekeeping notes. we are live on c-span2. later today you can find this on c-span's website, c-span.org. wi-fi is available to all of you on the network renaissance conference. the password is u.s. news hot. can you follow us on u.s. news twitter and u.s. hot. we encourage everyone to tweet live, #usnus 16.

find us on facebook, linkedin, youtube and instagram. u.s. news reporters are also covering the events so please visit u.s. news.com/hot to keep up with conference news coverage and get a summary of those sessions you may have missed. videos of our keynote sessions will also be posted there. tomorrow morning we begin early with several exciting breakfast round tables and a full day of panels, workshops and case studies. don't miss our keynote luncheon which features what promises to be a fascinating discussion how technology is transforming health care. at the conclusion of this afternoon's program, which joins us upstairs in the lobby bar for welcome reception ut southwest medical and road map. now, let's begin our program. it gives me great pleasure to introduce our first speaker. brian kelly, editor and chief content officer of u.s. news. under brian's leadership, u.s.

news has undergone a remarkable transformation. born a weekly news magazine, u.s. news is now a global digital news and information company that provides people with the knowledge, data, and know how they need to make life's most important decisions. as you well know, many of those decisions concern their health. from choosing a doctor to a nursing home to an insurance plan to a hospital. and brian has made u.s. news.com a must read website for millions of those health conscious consumers. in fact, over 30 million people now visit u.s. news.com each month, and more than 5 million of them are seeking our health rankings and advice. ladies and gentlemen, please join me in welcoming brian kelly, editor and chief content officer of u.s. news. >> thanks. welcome to washington. sounds like a punch line these

da days. not sure what i mean by that. let me start with a prediction. i predict three things will happen here a week from -- six days, seven days from now, tuesday, i predict something very interesting will happen. how is that for safety? i predict that whatever happens on tuesday will not be over. we'll be dealing with the consequences for a long time i predict wednesday life will go on for all of us. i'm one of the stalwarts who believe american democracy will survive. we'll see. but i believe that the businesses that all of us are in will also survive. however, they will be affected by whatever it is that happens. i'm not going to predict

whatever it is that happens. it is, in fact, one of the reasons we're here. we talk, the theme here is health care of tomorrow. we try to be forward-looking here. at the moment maybe the most forward we can look is about two months. we're going to look as far forward as we can. you know, it is clear one aspect of this that's clear, we're going to talk about this a little later. i've got some great panelists coming up. you cannot separate health care from the federal government. so we understand that. we need to understand what that means. we're going to try to help you and do our part to move that forward. there's so maeng things going on in the health care industry. the traditional role of hospitals is dramatically changing. the system providing better care, preventive care as well as testing and procedures. we have to live with that. you've had to learn new competencies and witness age old practices.

unprecedented eruption of health care providers both proven and unproven. we struggle with that. who is good, who is not. massive consolidation, new payment models, inner operability, all shaping in enormous and far reaching ways. i've got a lot of problems in my business, the media business, but we're not here to talk about that. we're here to talk about the problems in your business and i look at what you've had to grapple with and maybe i don't feel like i'm in such bad shape. medicare, 30% of payments must be tied to those models this year. 50% by 2018. good luck with that. cms released star ratings for hospitals. i know somebody else in the rankings business but i will hold off on that for a while. only 2% of hospitals earn full five-star score. we will have more to say about

that later. cms bundled payment program for cardiac hip repair payments not insignificant. there's been a rash of cyber attacks on hospitals people to into that a little bit more. etna, united health care, humana, all announced that next year they will pull out of many of the exchanges set up by the affordable care act. story to be continued. last but not least, cms is changing how physicians are reimbursed. and we always want to keep some emphasis on physicians, because that is where the rubber meets the road in this industry. and we try to do that here as well. over the next few days, the hospital executives and other leading experts that we've assembled here will help you transverse this rocky landscape. some will look at the big picture or provide a new perspective on what to expect down the road. others will go deep into specific issues and give you guidance and lessons learned from their own experiences. you'll also have many opportunities to network and

share best practices with your peers. you'll find many of them confronting the same problems and challenges you are. as you know, "u.s. news" has followed the hospital industry closely for nearly three decades. in fact, this year's the 27th year of our best hospitals rankings. as we continue to expand our role publishing consumer health data and advice, in addition, fairly recently to custom products for hospital executives, we're constantly seeking out the best measures of success. to that end, we're convening a colloquium on friday morning, which i will moderate. no one told me that. wait a minute. we will wrestle with the best practices for assessing hospital quality, safety and performance. with the controversial star rankings front and center, we want to bring together the key players from the assessment world for a lively, and we hope productive discussion about what works and what we can do better. joining us will be some of the

nation's leading hospital quality efforts from harvard, johns hopkins, northwestern, yale and more. maintaining our tradition of transparency, we will also have a session on our own rankings and ratings, and our chief of health analysis, ben harter, will outline our plans for the 2017-2018 rankings and beyond. our goal for this conference, health care of tomorrow, remains the same, to create a forum where the best minds among providers, payers and policymakers come together with the shared mission of improving consumer health. i'm proud that it's evolved into a provocative, civil forum that allows a broad range of officials to make progress on solving the key challenges that we all face. there are few subjects we cover at "u.s. news" that are more important. i encourage you to engage in the many formal and informal dialogues among the industry professionals, policymakers and medical experts that we have gathered here in the nation's

capital. thank you very much for joining us. >> thank you, brian. and now, i am so very pleased to introduce dr. craig venter, widely recognized as one of the preeminent scientists of the 21st century. as most of you know, craig played a critical role in the sequencing of the human genome, paving the way for numerous new therapies and treatments. through the venter institute, craig is continuing his groundbreaking research, and over its synthetic genomics, he is inventing technologies to benefit people, the environment and the history. while craig is a visionary, he is also a throwback to the great scientists and explorers of the past. he has circled the globe by boat to study the remarkable microbial diversity of the oceans, a voyage that yielded rich discoveries for genomic research. he has explored extreme

environments from polar ice to deep sea thermal vents, producing still more impressive findings. now, as co-founder of human long ye yeft, he and his team are searching for ways to extend the human lifespan. please give a very big hand for craig venter. [ applause ] ♪ >> thank you so much. >> thank you. >> very kind introduction. well, it's a pleasure to be here today to tell you guys a little bit about what we're doing at human longevity to increase the healthy lifespan. so, if i could start with the first slide. this is a picture of human longevity in la jolla, california. it started about 2 1/2 years ago based on the premise that we needed a very large number of genomes with associated

phenotype and clinical data to make sense out of the genome. we're trying to shift the paradigm from what it is in health care right now of being reactive to trying to change it into being protractive, so we only see people without obvious symptoms or obvious disease, in contrast to most of you, seen people that at least think they're sick. so, we're trying to use the genome to make it much more predictive in the future, but right now we're collecting all this data to see if we can even take that interpretation further. the reason for this is, looks like it applies to a fair amount of this audience. if you're between 50 and 74 and you're a male, 30% of you won't ever reach the age of 74, and if you're a female, 20% of you won't reach 74. and the key reasons for early and premature death are cancer

and heart disease that are roughly two-thirds of the reasons -- slightly higher cancer rates in women and slightly higher heart disease in men. so, if each of these became predictive early detection and prevention, it would have a tremendous impact. this is sort of the survival curve and how it's changed over the last century. over half the population, 1900 never lived past the age of 57. we're getting past the '80s, and there's no clear-cut upper limit as we look to all these tools for trying to expand what we call the healthy lifespan. so, 15 years ago, when we published the first version of the human genome, it cost $100 million to sequence that. it took nine months. we had to build a $50 million

computer to analyze that, and so, it wasn't a highly rep lickable event. but a few years back, sequencing technology changed dramatically to where it was under $2,000 a genome. and that computer that costs $15 million, you can buy a card for your pc for $100 that does almost the same amount. so, the changes are in technology, the changes are in distributed computing, and the third key component is machine learning. and i'll show you how we put these components together. we have three sites. the main site's in la jolla, california. we have a site in mountain view and a site in singapore, mainly for attracting key informatics people. we sequence over 34,000 genomes completely where we have phenotype and clinical data on

those, and many people thought genomics wouldn't be a big data problem, but we're about 4.4 petabytes of data right now, just of as, cs, gs and ts. just in 2012, you can index and copy the entire internet with about 12 pelobytes of data, so you can imagine the data problem is going to be enormous. published a paper on characterizing the first 10,000 genomes to see what they had in common. one of the biggest surprises was all the common variants in the human population saturated after about 8,000 to 9,000 genomes. so, the things that other people have been measuring associated with disease we all basically share. and so, the key thing is to come up with the rare variants that are actually associated with your unique traits and with the cause of disease, but also having all this data allows us

to do unique analyses. for example, we can find out how much we have to sequence to get extremely accurate sequence coverage with a very low false positive and low false negative rate. and i think we've achieved that now, and we have the first whole genome sequence that's clear validated with both hmp-38 and 19 in the world. so, one of the things as we sequence new genomes, on average, we found about 8,000 rare variants. that's out of your 6.4 billion letters in your genetic code. that's an average -- i was just on "the chelsea handler show" giving her her genome report, if you watched that. she had 15,000 rare variants but a very mixed ethnic and genetic background. but most of what we're building

the database now are these rare variants, which makes it a lot easier to analyze things going forward. we could also look at billions of data points. we can ask questions like are there sites in the genome that can't not tolerate mutations and be compatible with life? everyplace you see one of these downward spikes, it's a place that there's a mutation at that site and the genome, it's incompatible with somebody being alive. these are very important kind of findings, because we're finding certain rare variants in the population disappear with age. that means if you have those, they die out with you prematurely. there's lots of sites we can look at, just looking at the whole collection of transmembrane proteins. the part that sits in the membrane can take very few mutations because of the changes that charge it with the protein would pop out of the membrane and be nonfunctional.

so, what could we do with this data today? it used to be you had to have large families with disorders that took decades and decades to sort out. today we need a single patient, for example, from a children's hospital, to sort out a rare disease. it helps if you also have their parents. it's called a trio. here's a case from grady's children's hospital in san diego. it's a very rare disease called belamin's syndrome, and nobody had worked out what the genetic basis of it was. if you look at the mri of the brain, you're going to see the brain is quite a bit disordered. and the child also had tumors covering his body. so, we knew it was going to be a multigenic disorder. it was very interesting in looking at his parents' genomes, and things popped out immediately. wherever you see these orange bands, that's where the parents had exactly the same genome

sequence. this tells us that they're very closely related to each other. in fact, they were first cousins, but they grew up in a small village in mexico with lots of inbreeding to the point that now these chromosome regions are identical. the impact of that is, if someone had a rare allele on that part of the genome, now those rare allele will turn into disease alleles, and that's what's happened with some of these neurological development disorders. also we had another rare variant in the neurofibronatosis 1 gene. that's associated with elephant man's disease, and therefore, might link to the tumors. it's very interesting. we show it to make the point that neither parent had this mutation, so it's only in the child's genome. so, in addition to all the information you get from each of

your parents' genomes, we also have several hundred to several thousand spontaneous mutations that in some cases, like this, can cause rare diseases. with cancer, we had the most comprehensive genomic-based cancer program in the world. we sequence the entire person's genome. we sequence the genome with the tumor to extremely high coverage. we sequence the rna from the tumor to understand which tumor mutations are actually expressed. we isolate the "t" cells from the tumor and sequence the entire "t" cell repertoire. and we also characterize which of those "t" cells match up with mutated proteins. so, for example, here's a patient with hpv-16 caused head and neck cancer.

we found 25,000 mutations in his tumor. by doing both the genome and tumor genome, we get a total mutational burden, which is turning out to be very helpful. we found 315 mutations in protein coding regions, so these create the so-called neoantigens. and if you think about that with tumors, you get these mutations that create proteins that aren't part of the normal human repertoire, that's why if you have an intact immune system, your immune system attacks these proteins and generally will kill the tumors. if you have an inefficient immune system or it's suppressed, then tumor growth can take place. where we're constantly having mutations in cells and clearing those with a good immune system. for example, it's not such a problem in washington, but in the local area, we get a lot more sunshine. and if you go and sit in the sun

for about an hour, you can get as many as 10,000 mutations in your skin cell genome. the fortunate thing with skin, we replace it on an average every two weeks. that dust that accumulates in your house, that's you. [ laughter ] that's why there's always more coming, no matter what you do. so, we're constantly shedding that skin, but other cells aren't so easy to shed, and that's where our immune system comes in. this individual had mutations in his genome and three genes associated with a high risk for cancer. he had a suppressed immune system. and we found hpv-16 present in his microbiome, putting him in a situation where it would probably be more likely if he didn't have cancer than if he developed it. but the neoantigens give us several targets. they give us targets for knowing which drugs would work, which

ones won't, but they also give us the ability now to develop new vaccines specifically for that individual and their cancer. and we're just starting this program now between human longevity and ucsd, doing our first test this fall. and what we do uniquely is we validate the neoantigens, making sure there is a "t" cell clone that does recognize that mutated protein, which we think will greatly increase the efficiency. we set up our own clinic. we call it the health nucleus. it was set up initially for large-scale phenotyping, where we do a wide variety of tests. you can see the list of them here, everything from sequencing of the genome, the microbiome, measuring thousands of chemicals and going through a quantitative mri imaging, ct scanning, 4d

echo, et cetera. and i'll walk you through a few of these things. our key instrument that is really valuable is the 3t mri. we have two of these. we have a ge 3t and a new siemens 3t mri, and the resolution from these is amazing. but the key change in this space happened just in the last two years. scientists working with dale anders at ucsd developed this new imaging analysis that just looks at the water differences in tissues. and it allows, as you'll see in a minute, blood vessels show up readily without any contrast media, and tumors light up like light bulbs, so it's called restriction spectrum imaging. here's a case of a tumor totally thought to be healthy individual came in to go through the health nuke luis. we found a 5-centimeter tumor

under his breast bone. you can see in the image on the right, it literally lit up. his tumor was removed within a week. it was a stage 1 thynoma, but it was just at that stage where it was starting to penetrate the tissue. this is just the size when they start to be dangerous. but detecting it early. he went home a week after discovery completely cancer-free. if he waited another year or two, the outcome would have been totally different. the straight mri imaging now allows direct diagnosis of prostate cancer, just in the mri, without any contrast media. and here's a few cases that was published by our radiologist, david carrow, and his colleagues at ucsd. you can see in these images, on the colored images where it shows up bright yellow, that's where the tumor area is, and it

totally correlated with the histopathology on removal of the prostate. so, they can actually get gleason grades right off the mri in as little as 20 minutes without any contrast. here's another one that makes it even more clear cut. you can see that the bright yellowish-orange region that totally corresponded to where the tumor is. and the nice thing about these mri images, they can now be lined up with echo images for biopsy in the area where the tumor appears to be instead of just taking random biopsies. we're now diagnosing late-stage prostate cancer in about 10% of the males that are over the age of 50, many of them with completely normal psa and had no idea that they had prostate cancer.

these are the types of images we get from the brain vasculiture, so we can tell you how good a shape your brain is and the blood flow. and occasionally, we find things like this, we find aneurisms in the brain. so, two women in their 30s had these aneurisms. usually people discover them when they pop and they bleed to death. most people know someone who died from a brain aneurism. 1 out of 35 people in the population have these. now they just show up without any contrast media quite nicely. we found another surprising thing. so, two women had these large ovari ovarian cysts. this is one the size of a softball and she was completely unaware of it. another one had the size of a football and was not aware of it. even if these are not cancerous, they're in a dangerous stage, because they can twist, and

women quite often present in the emergency room with massive internal bleeding because of these. one of the exciting measurements is we can get metabolic measurements now right off the mri. we can measure the amount of fat in your liver. so, normal is 4% or less. we've had people now as high as 38% with completely lack of awareness that they had any metabolic disease whatsoever. at that level, they would be up for liver transplants within a decade. and there's a disease called n.a.s.h. it's not necessarily associated with alcohol use. n.a.s.h. is nonalcohol related liver disease. i was on a 30-mile bike ride with one of the experts on organ fat. we were 15 miles through the remind he told me, you know, exercise won't reduce your organ fat. and i said, you couldn't have told me 15 miles ago?

the only thing that will is calorie restriction. and obviously, exercise helps with calorie restriction, but it's very dynamic, and it can change quite dynamically. so, we do a variety of things for brain and neuro testing. using the mri, we get these incredible images. using another tool developed at ucsd called neuroquant that measures the precise volume of 20 different brain regions. and it's very easy to diagnose alzheimer's disease with this technique. and i'll make you all experts here. so, if you look at the one that says normal, and you look at that yellowish gland that there's two of, that's the hippocampus. that's where changes show up the first. and if you look at the one with alzheimer's disease, you can see all kinds of shrinkage around the brain, but that little

yellow area has shrunken tremendously, and there's voids around that. so, that's where it quite often shows up first. we're now at the point, combining the human genome with this type of neuro imaging where we can predict the future appearance of alzheimer's symptoms 20 years before somebody has those. gives a lot of time for development of new, of preventive medicines. we find a variety of different types of brain tumors. this is just a menangioma right on top of the brain. here's another vascular-type tumor. the main problem with these is they tend to bleed and cause strokes. we do a lot of unique cardiovascular testing from 4d echo to ct scanning to people wearing these little strips that records their ekg for two weeks,

and that's been responsible for a lot of our discoveries. the 4d echoes, if you haven't seen them, are really just incredible. you can see all four chambers of the heart. you can look right down one of the chambers and see the heart valves. by measuring the doppler shift, you can see if there's any blood regurgitated. so, none of the physicians in the health nucleus use a stethoscope anymore because the techniques are far more accurate. this is the ct picture. this is my heart. we actually use this for hr classes just to remind them that the ceo has one. but we can see the blood vessels very accurately and quantitative ly. and so, these tools really give us something that's quite unique. the two-week remote heart monitoring has really been amazing, and we've discovered a

number of cases of episodic atrial fibrillation, some for as long as eight hours, with people being completely ann wear th-- unaware that they were having it. perhaps it was as they were sleeping, so these individuals obviously are at very high risk for stroke. so just putting them on an an ant coagulant certainly changed their profile. a few had episodic heart block where their heart rate would go down to 20 beats a minute, and somehow, they were completely unaware of it. i think i would notice if my heart started going that slow, but maybe if i was dozing off, i wouldn't. and so, they're at risk for sudden cardiac death. they're now on pacemakers. we get these beautiful pictures that measures quantitatively the amount of visceral and peripheral fat. we can measure the muscle type, et cetera. so, that green is the fat that

you want to get rid of that's associated with disease. and we can give you these nice, quantitative numbers, if you really wanted to know whether your left leg weighed more than your right leg, for example, and what your different body parts contribute to it as well as the skeletal and joint condition. one of the biggest problems we have, and it's quite surprising to me, is males by almost a 2-1 ratio over females want to go through the health nucleus. to me, this is very straightforward. knowledge is power. if we find something, for example, these tumors. they're easily removable and people are cured, but women seem to be afraid to get the answers. so, maybe some of you have the answers for this of how to convince them to go through. but for the same reason they don't want to go see their physicians either.

our age range is quite broad, from relatively young to as old as 99. some people still want to live longer, no matter how old they a a are, and are remarkably healthy individuals. our big challenge is trying to put all this data together. so we're trying to take these new phenotypes and seeing if we can match it to changes in the genome. some of these are obvious. we see a lot of poly cystic kidney disease, polycystic liver disease. so, we've now had five individuals with greatly descended aortas and we found a gene duplication in one gene that seems to correlate with this, but you can still see from this chart we have a long way to go between the straight single-gene disorders, the g-was, which looks across the

genome, there's still d discordance with what the findings are. so we have a long way to go to get to the level we want it to be. out of the first 209 people, here's a partial list of the kind of things that we've discover discovered. essentially all of these have been actionable and treatable. there was only one case of very detill rouse white matter changes in the brain that probably were irreversible, but even by improving the cardiovascular system there was some improvement in cognition with that person. so, these are all people that by any other definition were healthy and were using like a 12th-century definition of health. if you don't appear to have symptoms and you feel okay, even by the u.s. health care system,

you're a healthy person. this data says that 40% of you are not. the data i showed you on the death rate prematurely from heart disease and cancer says you're not. and we're up to about 1.5 million new cases of cancer diagnosed each year. those people just didn't come down with cancer the night before. some of them had it for weeks, some for months, some for years. and if we can detect it earlier, we can simply remove it. we're using machine learning, so i just want to show you a few things with what we do with machine learning, because it's getting exciting and it will hopefully show you the potential as these databases get bigger and bigger, we can make associations with any clinical findings in the genome. we started by wanting to predict a lot of things about people, including eye color, hair color

and face. we found that, in fact, we're better at predicting people's eye color than they were at defining it, and we used spectral imaging to get a precise color. and it turns out, people's eye color varies by as much as about 14% from eye to eye, so most people are unaware of that. so, we can predict your eye color pretty well. getting quantitative skin color is complicated, because some people go out in the sun, some people use a lot of makeup. there's just a lot of different things with it, but the correlations now are getting pretty good with that. so, we can predict age, we can predict all these different features, and so we put some of these together in the genome report that you get where we predict your height, your weight, your bmi, your eye color and your hair color. on "the chelsea handler show,"

her genome predicted a rate of 166 pounds. she used an extreme obscenity at me when i pointed that out. i said, look, you just haven't achieved your genome potential. some of us have exceeded our genome potential. but we can actually now also predict other things. men and women lose chromosomes as they age. men lose their white chromosome, women lose their "x" chromosomes. we can quantitatively from the sequence measured telomere length and find changes associated with age that are pretty quantitative. we can measure from the metabalone. there are a number of chemicals that clearly do appear to correlate well with changes in age. and we set out to see if we could on top of all that measure what you look like just from your as, cs, gs and ts.

so, we did a clinical study, took 1,000 volunteers, made 3d images of their faces, sequenced their genomes and did a lot of other components. we're also trying to predict voice. so just from a digital voice print, over the telephone or any other things, we can pretty accurately determine the sex, the age and the height of the person. the height surprised us in these correlations, but it somewhat correlates with your overall volume. so, donald trump would have never been able to fool people with the simple test trying to be his own press agent a few years back. so, we take these 3d images, we smooth them a little bit, because the 3d photographs are somewhat harsh, and we've taken these into our machine-learning algorithm looking at thousands

of bits across the genome, and here's our current version of the face prediction that seems to match relatively well the 3d photo. so, this is just the genetic code, as, cs, gs and ts. we don't put in the actual eye color that's predicted for these. it's just graphically difficult to get it right. here's another case of a male. the 3d photo. and here's the genome prediction. here's an african-american male, because ethnicity such is a key part of these predictions, it actually works extremely well. and here's his 3d prediction. so, we can combine all this data of your height, your weight, your eye color, your hair color, an approximate photo of you that the photo on its own, people can

readily identify one out of ten. but we also measure and know your blood type, your exact hla type. so, males just with your white chromosome haplatype, it can usually be linked on the internet to a surname very quickly. so, the point of all this is, if you think, and as the government and others will try to tell you, your genome can be deidentified. we can identify you from your genome, so be careful where you place it. [ laughter ] and if you're part of a study and told that you can be deidentified in that study, it's truly not possible. so, we treat people's data highly securely. nobody can run the algorithms on anybody in our database to try and determine their identity, and i think that's a key issue.

so, we're combining all these things. they're all improving with machine learning, but think about the same thing with all the different symptoms and measurements that we get for disease, off the mri. for example, off the mri, we get the exact diameter of people's spinal column, and some people have a narrowing that's genetic, so we can predict in the future those who are much more likely to have lower back pain simply from those markers associated with this narrowing in the spinal cord. so, at the earliest stages, it's just getting exciting. we return the results to people on an ipad, so you don't have to carry around a couple thousand pages of paper. and we make a 3d avatar out of each person with about a 200-camera system. it's the same kind of avatar they use in the movies.

so, in the future, they will be animated and help you walk through your own data. so, if any of you are interested in learning more, you can go to humanlongevity.com, healthnucleus.com, or that's my e-mail address, if you want to make an appointment. so, thank you very much. [ applause ] >> thank you. thank you. thank you. thank you very much. thank you. thank you. thank you. thank you so much, craig, for your amazing insight and captivating look into the future. we wish you the best of luck. now i'd like to bring to the stage three other esteemed health care leaders. first, we have tom daschle, founder and chief executive officer of the daschle group. few people have such a profound understanding of the issues animating the current health care debate as tom. as senate majority leader, tom established himself as a leading expert on national health care policy.

he has remained deeply involved in the debate since leaving the senate and now heads the daschle group while serving on many influential policy bodies. tom also co-authored the book "getting it done: how obama and congress finally broke the stalemate to make way for health care reform." he continues to be a key voice in health care in america. please, give a big hand for tom daschle. also with us today is redonda miller. in may, she became the 11th president of the johns hopkins hospital. she previously served as senior vice president of medical affairs for the johns hopkins health system as well as a professor and vice chair for clinical operations in the department of medicine. redonda has made medical education in women's health a major focus of her academic and clinical career. she chairs the maryland hospitals association council on

clinical and quality issues and is a fellow of the american college of physicians. as she governs, she plans to continue caring for patients. as she said in a recent interview, "seeing patients will keep me grounded and help me remember why i'm here." please join me in welcoming redonda miller. next we have with us gene woods, president and ceo of the carolinas health care system. after distinguishing himself as president of christas health, he took the reigns of one of the nation's largest non-profit health systems earlier this year. he will also serve as the next president of the american hospital association. in a recent interview, gene likened maneuvering in the current health care climate to trying to play chess on a rubik's cube -- just when you think you have everything figured out, someone twists it

and resets the game. gene has shown himself to be a savvy chess player, so we look forward to having his thoughts in perspective. ladies and gentlemen, please welcome gene woods. and leading our discussion this afternoon is "u.s. news" editor brian kelly. please welcome him back. the stage is yours, brian. >> thanks, margie. when i started in this business, somebody told me the great slogan of show biz -- never follow a funnier comedian. i have a corollary now -- never follow a certified genius. wow! i think we just saw the future of health care. so, thank you very much. we'll see you next year. no, we have -- that was fascinating, but we've got some people who are living in the trenches here, and i think that's also what we want to do. we have 30,000 feet, and we have grassroots. so, margie gave you the introduction. i want to start with some probing questions for these guys. we go for the hard stuff.

tom, you have been the minority leader of the senate, the majority leader, twice each, i believe -- i'm not sure when that's replicated. what's the better job? >> can i have some time to think about that? a couple days, brian? actually, i think being in the minority is more fun, but being in the majority is a lot more fulfilling. >> all right. okay. so, we're going to walk through this. gene, you come from a health system in north texas. you come to north carolina recently. cowboys/panthers, who's better? >> that's easy, philadelphia eagles. now, wait, wait. >> uh-oh. >> i know we're on camera, so a close second is the panthers, okay? we've got -- my wife is a steelers fan, my son's a cowboys fan, so we have a little disharmony in the woods household every once in a while. >> all right. but that's why they pay you the big bucks.

you know how to navigate. redonda, one of the great hospitals in the world, the day after the election are you anticipating a surge of people looking for psychiatric care? >> well, you know, non-partisan aside, i think we'll be ready. i'm not sure i know the answer to that, but i will also say, you know, we have some riots in east baltimore a while ago, so we'll be ready on that front as well. we'll be ready. >> all right. it's a crazy world out there. so, i want to start with each of you. if you think about what we've got here, which are people with enormous expertise, but we've also carefully chosen them. they represent the spectrum here. so, redonda has a first-class institution, actually, a network. gene has also a network but also is going to be the president of the aha so is looking industrywide. and tom pretty much has the whole country in his pocket. so, i think we can cover the bases here. so, i want to ask each of you in sequence here, what -- when you

look at your piece of this, what's working, a couple of things that are working that make you feel good about where we are? and then i'm going to ask you what's not working. so, redonda, let me start with you. you look at hopkins, the hopkins system. what makes you smile when you come to work on monday morning? >> what makes me smile? i think it is the renewed focus, not that it always hasn't been this way, but there is a renewed focus on the patient being at the center of all we do. everything from designing our care models to messaging folks in our electronic medical record, just trying to make care easier to access for our patients, for our customers. that makes me smile. >> okay. good answer. tom, fix the country for us here. >> i think the two most formative and most powerful forces in health today are technology and policy. technology. we've just seen a clear demonstration of the unbelievable things that are

happening technologically. and i think the application of technology and big data is very, very exciting. so, all of the innovation that we're seeing through technology has got to be on the short list. on the policy side, i think the one really remarkable thing we've seen is the improvement in the number of people who are insured today and the number of protections that people have as a result of policy. so, we haven't seen as much movement on the policy side as we've seen on the technology side, but we've seen movement on both, and i would cite those two things primarily. >> gene? >> you know, i would add -- well, we have a long ways to go with quality, clearly, in the field, but i see a real commitment to quality. you look at the american hospitals association with the grant that was just received and 34,000 instances of harms averted, $300 million saved. carolinas, likewise. we just renewed 13,000 instances of harm eliminated and about $76

million of cost savings. so, we have a tremendous amount of work still to do on the quality front, but i feel that the field as a whole is really committed and on the path to that. >> okay. so, what's on the down side? >> on the down side, you know, if you step back and look at -- you know, aca partly was to address access, and we've got 20 million people now that have access to insurance. but if you look at the nation's hospitals, you have about one-third that are struggling financially. you've got about one-third that are sort of in the middle there, plus maybe a little bit of break even, and then you've got one-third that are doing well. and those two-thirds are particularly concentrated around areas of need or rural communities and also urban safety net communities. so, my concern is that while we have access through insurance, i think we're entering a period of where we're having uneven access in terms of actual providers in

rural america and also in some safety net areas. >> redonda? >> what keeps me up at night is the rapidity of change. i think we're going in the right direction for our patients, but if you're a hospital just trying to manage all that's coming at you rapid fire. i think back say over the last two or three years, and just at my own institution, we wrestled with launching a new electronic medical record at our hospital and across the system, we had ice-10. we launched an accountable care organization. we have countless new quality metrics that we're trying to perform well on. it is just rapid-fire, nonstop change. and i have no doubt that we can do any one of those really well. it's just trying to balance and manage all of those at the same time. >> tom? >> brian, i think if i could go back to my policy assertion a minute ago, i think the down

side is the degree of politicalization around policy today and the constant confrontation. we've got to find ways to make the policy debate around health care more civil again. and we've got to find ways with which to come to some conclusion, some reconciliation about the role of government in health care. that's really at its heart, just as you said in your opening comments. one of the big challenges. once we do that, we still have a whole range of issues. we have issues around still on the fee-for-service and moving to a different payment model. we have major quality issues. we still aren't as operable as we need to be and connected. we're too siloed yet today. we don't -- i always have asserted, we don't have a health care system, we have a collage of health care subsystems, and they're siloed, and we've got to figure out a way to make them work better together. >> we're going to come back to that. i promised you guys we'd tell you what to do on wednesday morning next week, but i want to -- so, gene -- the quality question. you know, we at "u.s. news" have

a little bit of experience on that. we have this slogan, if you can't measure it, you can't fix it. and i think we've had a lot of emphasis on data. and the government with the five-star rating has made a move in that direction, controversial. so, each of you give me your sense of -- quality measures, are they working? where do we need to go with that? and what's it doing to your institutions? because i know both you guys are very much involved in that. >> yeah. you could count the number of quality metrics we have to track on a daily basis. we're talking 400, 600, 700. and the question is, they don't all have -- some of them are methodologies, some are useful and not useful to the consumer in distinguishing one provider from another. so, we've thought through and have an initiative going that says what are those metrics that really matter? part of that, we've distilled it to 11, the metrics that matter,

including some population health statistics or metrics, such as obesity and diabetes. but i think right now there's -- the field is overwhelmed by all these quality metrics. some of them work, some of them do not. and so, we've got these 11 that we're hoping to start a conversation with insurance companies, with government, with others to say what of these can we coalesce around to simplify it and make it meaningful to the people that we serve. >> yeah. redonda? >> i would echo a lot of that in the sense that i think we're at an intermediate stage right now with our quality metrics. the good part of measuring quality is that it has truly called to us to focus and make sure that we are hitting all of the cancer screenings for our patients, making sure our chs and copd care is top-notch. so, it does cause interinspection and really examine our processes and outcomes, and we have uncovered issues that we have corrected and our patients are better off.

having said that, some of our metrics are not as mature as we would like, maybe being a documentation issue, or it doesn't really capture the essence of quality. so, i like your idea, honestly, about trying to focus, pick the top ones that we can all really sort of huddle around and make sure we get those right, rather than trying to do a scatter-shot approach. >> a question for both you guys, because you serve a variety of patient populations. and one of the issues that's come up with the quality measures is the notion of risk adjustment or socioeconomic status, sds, socio -- i can't even -- i grew up in the late '60s, i can't say sds with a straight face. but whatever you call it, how do you -- you know, people have said there is a real deleterious effect to this. it's penalizing hospitals that are serving in underserved populations and actually taking money out of their pockets, right? is that happening to you? and how do we fix that?

>> that's a long answer, because yeah, that socioeconomic adjustment is really critical, and there's been a lot of work done on that. we try not to worry so much, ultimately, at least in our system, to worry about those type of metrics. we're really focused on how we serve our communities, because a lot of that gets to social determinants. this concept of -- because if you look at all our communities, it's amazing, talking baltimore, charlotte and certainly others, how under the surface, communities in need really, when issues happen, they really, you know, make their voices known. and so, what we've tried to do is looking at the socioeconomic factors, using things like hotspotting, we know in charlotte there's six different zip codes that have three times the e.d. use of the rest of the population. so, we're trying not to focus so much on the methodology and the metrics but trying to figure out

how we bring better services to those in need. >> are you guys affected by this? >> yes, we are. i like to say our institution sort of has two missions. we sit in east baltimore, which is a very inner city population, and we were founded in 1889 to serve that community. then at the same time, we pride ourselves on being innovative, high tech, and attracting patients from across the nation and across the globe. so, we have two very different patient populations. we aim to serve both. embracing population health with the local zip codes around our hospital is very important to us and having some kind of socioeconomic adjustment is important. no method is perfect. i will be the first to say no method is perfect, but it does allow hospitals to embrace these local populations and make sure we move beyond our walls to deliver appropriate care. >> tom, should the federal government even be in this business? what are they doing making

consumer ratings? i mean, aren't there other people who do that? >> well, i think -- [ laughter ] i think when it comes to establishing value, which is the goal of people in government and in the private sector, we want higher value, and quality metrics are critical to reaching that goal. and quality metrics today are really the wild west. i mean, there is just so much out there that i think is frustrating and confusing and counterproductive. so we need to universalize, we need to simplify, and we need decision-make decision-makers. and i think government can help play a role in universalizing what the metrics ought to be. is it outcomes-based? is it performance-based? how do you ultimately describe the metrics and then quantify them? and i think government has a role in doing that. >> i want to talk about doctors for a minute. you know, i said before, doctors are where the rubber meets the road here. you know, last year at our conference we had a number of folks talking about the whole issue of doctor burnout.

and sort of a two-part question. you know, what do you see in terms of that, because we seem to be putting so much of a burden on doctors? and then arguably, we're also putting tremendous burden on hospitals. so, is this year's theme hospital burnout, you know? talk about population health. it's like, here, you guys fix the entire problem of baltimore, right, which i know is on your shoulders, redonda. you fix the entire problems of charlotte, north carolina. start with the doctors and tell me, what are you seeing from your folks, and what do we need to do about that? and then maybe we'll talk a little bit about the institutions, and are we asking too much of the industry? >> i'm going to let the physician speak first. >> well, this is a topic near and dear to my heart, physician burnout. and i would expand that to all care provider burnout. i would include our nurses and pharmacists and physical therapists as well. it is something we're wrestling with. the electronic medical record, for instance, brings such good characteristics to our care --

the ability to chronically prescribe medications for our patients, the ability for patients to see their results, all good. but it decreases productivity. it loses -- it hinders the human touch of an office visit, the need to be clicking and stuff. physicians are also burdened with other administrative tasks -- trying to make sure the coding is correct in the emr or meeting this regulation or this quality metric. we are seeing some significant burnout and disillusionment. in fact, we are launching a joy of medicine initiative because it's important, how do we bring back the joy and the real reason of why we all went in to medicine. >> yeah, gene? >> i think she said it so beautifully. i think the joy of work is something that i think is lost sometimes with all of the regulations and everything that people have to deal with. but the simple, little thing that we've done recently is we have what we call tree of life

stories. so, it's stories of how we affected another teammate's life or a patient's life. and so, i'm receiving videos and e-mails on a daily basis, and i feed them back to the organization. and part of that -- that alone is connecting people with their purpose. and sometimes, we found that that's helped. the second thing that we've really focused on is we have of our strategic initiatives about 80% are led or co-led by physicians. so, what we're changing clinical practice and changing emrs and things of that nature, i think they feel they have a voice in that change. and so, i think that's been helpful, including compensation models. so, we try to engage them more in the decision-making and also reflecting back to them and the nurses and their organization what's special about what they do every day. >> now, talk about the institution. so, population health, which i guess everybody in this audience knows what we're talking about, but it's vastly expanding the mandate of what institutions are doing, digging deeper into

pathologies and other aspects of the community. you know, the readmission met critics for one, which penalize you if you're not taking care of that. do you feel hospitals are being asked to do too much? >> as i mentioned in my earlier comments, i think the direction is the right one. i worry about the pace of which we're trying to do all of this. i do worry about that. but every single movement, every single initiative does have value. it does. we are spending our time trying to figure out how to become a hospital without walls, so to speak. we want to take care of our local population. we're investing in pharmacists to go into the homes, community health workers, trying to really hone in on all these new care models to keep people well and out of the hospitals. the hospital administrator actually saying, that's a little ironic, but that's what we want

to do, but it is a lot to tackle. and it's not clear that we have the appropriate resources to make all of that happen. that's a challenge. >> so, tom, i want to put that question to you. from a national policy perspective, do you think we're asking hospitals to do too much? >> i think in some cases we're asking hospitals to do things they're not prepared yet to be able to do, and we've got to recognize that we're all in this together. and when you talk about population health, that's especially true. we can't ask the hospitals to drive the entire population health challenge. when we look at what is really required, it is a far greater understanding of the social aspects of good health, you know, the nutritional aspects and health monitoring and the things that are done maybe in a classroom or in a workplace or in a community, in addition to the hospital. so we have to realize that it's a much broader responsibility than just a provider or just a hospital. we can't ask them to do things they're not capable of doing, and i think in some cases, we're doing that today.

>> yeah. gene, go. >> and here's what i would add to it. i mean, this year alone, there's been 15,000 new pages of regulations written, and between now and the end of the year, i think we'll get one final rule every week, it seems. and so, when you talk about are we doing -- asking hospitals to do so much, i agree, we're heading in the right direction, although in an uneven path. but if you think about that, we're writing regulations that in some respects conflict with regulations that were written that don't sunset. so, the one thing i am noticing and i get feedback from the members of the field is, please, slow down the the regulations. in fact, even with aca, if you look at aca regulations, if you're trying to do the right thing in terms of coordinate care, then you need sometimes to get an exception for s.t.a.r.k. and also for fraud and abuse, which were things written for from there was fee for service and physicians weren't necessarily aligned, so you have to get it to how the service is now.

not only are we going through a journey of transforming population health, but we're seeing conflicting regulations. if we can solve for that -- even if you file for an exception, that exception sometimes is only for the system that has requested that exception. so, i think this whole regulatory burden is real and it's confusing and it doesn't have to be. so, i think you ask if we're asking hospitals and health systems to do too much, i think in some ways with respect to that, we are. >> fix that for us, tom. >> well, i think first and foremost, we weren't as -- as i said earlier, we're too siloed and we're not as engaged as we need to be. i think on a monthly or a regular basis, what would please me is for any administration, this one or the next one, would bring in the leaders of each one of the sectors and say, look, let's focus this month on the regulatory environment. how can we make it simplified? how can we do a better job of adapting to this changing world

and this transformation we're in? there isn't enough of that inclusiveness and this willingness to listen and sort of adapt as we go on. technology is moving, as i said, faster than policy, and the movn policy in the regulatory realm and we have to bring those back in to sync with technology and that only can happen with better inclusio inclusion. >> if i could just add on to, that you're on the money. we've worked on putting providers together and aligning incentives between hospitals and nursing homes and physicians. i would like to bring other stakeholders to the table, the payers, big pharma, and have a conversation because there are other stakeholders we need to engage in the work as we move to population health. >> is it too late for you to get in the race, tom? is there a filing deadline? if i want to talk about health systems.

bo you administered not just both institutions but systems. this conversation was called hospital of tomorrow last year but time moves on. so you have a system that is throughout the state of north carolina how does that come together? how is that working for you? where does that go? >> we're the largest provider of care in the carolinas. we're about 47 hospitals throughout and 60,000 teammates. i think that what we have done well is a system -- this is probably overused -- but the first curve connectivity. revenue psych logical do extraordinarily well. supply change we do extraordinarily will. so all of our hospitals and systems work well in that. i think what we're stepping back and looking at is how do we leverage capabilities for the second curve together so we have

cins building up in different places and we want to make sure analytics capabilities are coordinated, aligned. the virtual care platforms because what we know for sure as we make the transformation, it's an expensive technological build and the care management platform alone is very resource-intensive so we're trying to figure out how to use the same thinking in terms of spreading fixed costs on the first curve revenue cycle and apply that to more integrating functions at that level. >> just for the record i'm the president of the hospital, i would hate for my boss who is president of the health system to be listening in. we are younger in our journey towards being a system, we've been at it maybe five or six years. we've developed a lot of shared services, we're purchasing together as a system. all that good work. things we are embracing now,

which of our six hospitals is the right place to do hips? do we need to have six lung cancer programs or should we consolidate those? what's best for the patients where we can really standardize care and provide excellent care instead of duplicating it throughout the system. we also expand the notion of system not just horizontal alignment but vertical alignment, too. we have a home care group in our system that allows us to deliver care directly to our patients at home. we have a community physician network so we're looking beyond just the typical acute care hospital model and we have, i think, a lot of elements that will allow us to really do well in population health. >> hopkins specifically i'm familiar because i live in washington, d.c., i visited your fine institution with family members many times and several of your hospitals are within close to my home and it's been fascinating to see that -- how

do you translate the expertise, the excellence of hopkins to a community hospital? >> it's interesting. we have a lot to learn from our community hospitals as well. it's a partnership for us. we have been building our system from the ground up, engaging front-line clinicians from all five mid-atlantic hospitals and all childrens in florida and believe it or not with we've learned from each other and each have something to bring to the table so that's how we've been approaching it. >> i've been in the system six months but i think in the audience we have dr. roger ray, our chief physician executive and what i have -- the third month i was there we took all of the cmos from the system, brought them together for a quality day, including the patients and set metrics as a group and deployed that out. whether you're a managed facility or your own facility. for me that's created more

systemness than even the -- what i talked about earlier in terms of the first curve. so that's where i get excited we're coming together in ways we can continue to build on. >> i think that's another nice outcome of the quality movement in the sense we're doing the same thing, we set our goals for quality metrics at the system level, every stakeholder has a say in what the target should be and we monitor it from the corporate level. >> tom, you've said this system, consolidation, is inevitable. where disease this go five years from now? what does the health care system look like? >> you're going to continue to see an evolution and for the most part it's a good thing. we'll see more applications in health we haven't had before. telehealth and telemedicine is a good example. the extraordinary new roles

technology can play in health delivery i think will change a lot of the structure. in the state of south dakota, my state, we have a loath of small hospitals, they're already relying on more connectivity between their hospitals and the larger ones to provide services we haven't been able to before. if we can ever fix the interoperability challenges, that, too, can help make connectedness more consequential. also we have to recognize that scope of practice is going to continue to involve. it suspect going to be just position-driven any longer. we're going to see greater roles for nurse practicers, physicians assistants and other providers. even pharmacists -- i shouldn't say even. pharmacists as well. everyone has a role and we ought to embrace that, not struggle with them as we have in the past. >> let me pick up on that. we try in this conference to be forward-looking even though it's hard to figure out what's going on next week, specifically next week. that's my last question.

[ laughter ] before we get to next week, i want to talk about looking over the horizon in terms of technology, medical breakthroughs, what things that can change either the actual medical clinical outcomes or the structure of your business. what do you see as promising coming over the horizon? >> the example i've used several times, if you go back to 1950, all the medical knowledge in the world doubled every 50 years, y right? now somebody entering medical school by the time they're done with medical school, that medical knowledge in their particular field might have doubled so we're in an extraordinarily exciting and innovative time. i am fascinated by still the concept of predictive analytics. i think we're just tapping -- we're hear and there's so much opportunities. you mentioned copd, there's 15 million in the country that have that. if you're coming to carolinas

right now, we have 40 different variables and we can predict in 80% probability whether you'll be back in a year and whether we can intervene in that patient's care. those are the technologies as we look over the horizon that will allow us to allocate resources bett better. in this particular case we have an advanced clinical team that identifies that patient, follows that patient, they have 40% less cost per episode and 15% less readmission. so when i look over the horizon i see those technologies helping us in ways we can't even imagine. >> a couple things come to mind. i think leveraging technology to meet patients and their care where they want to receive their care. for instance, various apps, internet technology, mobile technology that allow patients reminders to take medicines or how to intervene on certain

chronic conditions. doing this kind of work at the home will help us move forward. the other thing that excites me on the technology front is this focus on precision medicine and not -- for instance, not every disease manifests inner patient the same way. some depends upon your genetic makeup but i would say it's more than that. some of it depends on your socioeconomic environment. it may depend on behavioral aspects to your health so being able to harness the aspects so we know we can tailor the therapy to the patient based on how that disease manifests in that individual patient. >> well, first of all, i think you're going to see real breakthroughs and further cures, we saw hep-c in the last couple years. now we have the cancer moon shot. i think there's real opportunities for breakthroughs and who knows how close we are. but if i could say two other areas where i think we have the greatest need and maybe making the greatest progress, it's on

palliative care and infant mortality and mort mortality. we have real challenges we haven't fully addressed but i'm excited about the progress and commitment that our country is making both in the private and public sector to addressing those better in a more successful way. >> what about on the data side? electronic health records. is that -- we put a lot of energy, a lot of money into it. it has had unintended consequences on the pros and cons side. is that a key part of the future for all these institutions? >> i do. we just finished our rollout of our electronic medical record across our health system so we're looking at how to harness that data. but beyond our health system. the regional information exchanges, the chesapeake region information system allows us to access data from all the