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let's get back to health care. so this is our big data. despite $34.7 billion of meaningful use money out the door, this is more common than any of us would like to admit. for the $4.7 billion we spend on meaningful use, we got something that looks like this, circa 1990s or earlier applications that run in our data centers. under the covers of this, most of us still run our own data centers. you have our own cios who pull out their hair trying to make sure the lights blink and backup plans are set. most folks in silicon valley are running on amazon services. these applications don't talk all that well with each other.

this is to protect the innocent version of a technical integration diagram for all these different systems that are supposed to talk with each other. it is wired together with hl-7 the technical equivalent of bubble gum and duct tape. back in the corner you can see my favorite park that, dark cloud called the internet. i hear it's going to be big. because it doesn't work all that well, we have to rely on the lowest common denominator, paper. that's the reason doctors still get 1,311 faxes per month. the method of preferred handling is cards at the front desk. the dominant method of shuffling around patient records is manila envelopes stuffed with paper. so what's the alternative?

as it turns out, my kids -- i love them to death, but they don't always get along. my wife ended up buying this book for them "we belong together." it's simple. sisters should get along so they work well together like cookies and milk or peanut butter and jelly or hot chocolate and marshmallows. so kutsy, but as it turns out, this is very much the way silicon valley ends up thinking. if we unpack the pokemon example from earlier and look behind the scenes on how that's orchestrated, when you go to amazon.com what happens is soon as you hit the page, amazon runs 200 to 300 parallel web queries behind the scenes and orchestrates them to construct a page perfectly personalized to you, the customer. a very different way of thinking about the hl-7. further more, amazon continues to innovate to make things transparent and easy to use. as i was preparing for this talk

on sunday, i didn't have a bunch of time. i decided to talk to my echo at my kitchen counter and said, alexa, could you please get me a pizza? in 20 minutes there was a piping hot pepperoni pizza at my front door. an interesting way of thinking. just if you take a step back, you have what used to be earth's biggest book store now collaborating with my kids' favorite pizza joint to get a pizza in no time at all with a completely transparent means of talking through and collaborating with it. just different. again from the perspective of a company that was trying to be the world's biggest book store, it doesn't make sense, or distribution or the kindle. from the perspective of a company trying to be the world's most customer-centric company it makes all the sense in the world. i'll end on this. many of you may know this

painting. it's called "the doctor" and was painted by luc fields in 1887. you see a doctor attending to a child. the child is in a victorian home on a make-shift bed consisting of two mismatched chairs. you can see the parents in the corner waiting, watching and hoping. everything that can be done for the patient has been done. the doctor is sitting with the child in a moment of perfect presence. i think the question for us is this, we have seen what silicon valley has been able to do by putting the customer at the center of their world. what would happen if we truly put the patient at the center of ours? thank you. thank you so much, ed. it's great to hear about the promise of technology in this

space. it's with an eye toward the realm of possibility, i'm honored to introduce the next group of speakers ed will join. laura wallace, vice president health and life sciences at microsoft. laura has distinguished herself in management roles in ibm, lotus development, various start-up ventures before joining microsoft in 2003. since then, she has played a key role in the tech wave that is transforming health care by delivering software and technology solutions to major health care providers, health plans and life science organizations. as one of our founding sponsors, we also like to thank microsoft for their continued support of this event. let's give a big hand and a warm welcome to laura wallace. our next panelist is yuman choi. he focuses on medical devices

and diagnostics. he lectures on entrepreneurial finance at tufts, serves as mentor in start-up accelerateors and director of a number of cutting edge health care companies. please give a warm welcome to yuman choi. next i'm delighted to bring out stephanie telenius. stefr any never backed away from a challenge, particularly if it involves destructing old ways of building business, whether building google wallet, shopping express or founding planet rx. she has brought her special touch to helping people manage health conditions with an app that connects people with health coaches. it is my distinct pleasure to welcome stephanie telenius.

to guide the conversation today, we turn to scott hensley. host at npr. scott was the founding editor of the "wall street journal" health blog and headed over to npr in 2009 to become host of shots, online channel for health news from npr scientist desk. a warm welcome to scott hensley. take it away, scott. the stage is yours. >> i appreciate it. i want to start with you. amazon accomplishments are amazing. it was simpler for them to define the customer. how do you think about the customer in health care when there are many people involved, many people paying and many people getting paid for any given service or procedure? >> it's a lot more complicated in health care.

i think what we are beginning to see is a pivot towards the patient. the pendulum was moving right from the insurance company to the employer to the doctor, and i think it's beginning to converge back on to the patient. that's clearly -- at least the intent behind what's going on with value-based care. we are seeing that also happening in the private marketplace with the advent of retail clinics and urgent care chains. you're beginning to see the consumers are take a voice in here. i think that it is much more difficult. it's not quite as black and white who the consumer ends up being. what i do see at the end of the day is that health systems, providers and employers essentially need to have more -- they need to find a way to deliver higher quality product for a lower price. ultimately that's what this will boil down to. this idea of consumerism and value-based care is overused in terms of -- the words are overused, but the pendulum is clearly swinging in that

direction. >> stephanie, your company is of the ones represented here on our panel, i think the most clearly con fumer focused. could you tell us about the app, the service and then why did the world need another app? i'm curious. >> sure. what veda does, it's like -- think of it like facebook messenger or facetime build into a hipa compliant. we take all your data and connect over 100 apps and devices and match you to the perfect coach. it's consumer driven in the sense it's pulled. the consumer is controlling the experience, deciding who their coach is. it's on your phone. it's very comfortable, fits into your life. you don't have a nurse calling you at 7:00 at night when you're

eating dinner with your family. and it's very much personalized to you. we use evidence-based clinical programs and we really match to help you lead the best life possible. let's face it. we spend, we spend 20% of our gdp on health care in 2025. we all know that 86% of that is on chronic conditions, and 29% of that is arguably wasted. we could do a lot in this country to avoid getting those chronic conditions. so we've taken diabetics and taken them from 15-a1c and got them off their meds. consumers love it. it's right on your phone. coaches are right there program, data, everything in one place. people check their phones 150 times a day and it's convenient to be able to have a conversation through text, audio and video with a health coach. it's a different modality, a different way of thinking. consumers are ready.

some are concerned about data and hipa, but they want a great experience. >> who pays for that? >> we get paid many ways. we get paid by consumers directly, employers, pairs and providers. we are working with united health care. we are deployed with large providers like partners. we have lots of employers, fortune 500 employers that offer it as a benefit to their employees. >> laura, i have a question for you. from your vantage point in a company that started as tech and for some time has been moving into health care, how does a tech company become a health care company? >> it's an interesting question because i think from a microsoft perspective, we don't become a health care company per se. our mission is to enable individuals and organizations throughout the planet to achieve more. so we really look at who are these health care companies that

are out there, whether it be start-ups, how do we able nem to deliver a better product, better service, leveraging platform? you do need to build health care expertise because standards matter, certifications matter, do you have a trusted platform, a trusted cloud to leverage so you can build solutions people would be comfortable putting their data in a cloud leveraging that. you have to build core competencies. you have to offer building blocks of capabilities that you can leverage like skype for business, for virtual care or leveraging cloud analytics in a hipa-compliant way. it's enables the scenarios and building the tools and platform to bring those solutions to life. >> yuman, as an investor evaluating companies and thinking about through the health care lens applying technology, what are you looking for? what is the sort of calculus

you're making about when a company is sort of got the right angle or on the right track? or not? >> it's an interesting question because it's pretty complex. health care is wonderful in that it is -- there are so many different stakeholders, different innovations happening. what's great is, we don't have to go that far in the future because all that innovation happened 20 years ago. e-mail, great, let's use that. text, great, let's use that. it's a lot of catch-up what's difficult for us as investors, we're looking into the future and looking at what the vision for health care should be. but we need to look at where it is now. where health care is now is not health care. if you want to unpack that word, it's not health, it's sick. we focus on people that get sick and we drive all health care towards people that are sick. it's not really care because for care to really happen, it has to

be before the person is sick, before the patient becomes a patient, really is a consumer. so from before through whatever the treatment is and post that, that's really care. as you think about health care, we always say we focus on triple languages. improving costs, improving quality, lowering costs and focusing on the consumer experience. it sounds easy to do, but when you look at a company with those three pillars of foundation, it's really challenging when you say, okay, well, you're lowering costs, but at what expense? what is it coming out of? you were going to improve quality, great. how do you do that while lowering costs? it starts becoming a multivaried analysis not x plus y equals z. we like companies -- and just to go beyond that, the timing is challenging. we've invested in companies that were great. we knew this was going to

happen. it takes a long time for things to get adopted and for everyone to buy in. when we missed a mark, it's usually, hey, we invested 15 years before we should have. it is a challenge. then you're scratching your head going, this is going to happen. five years later, it starts happening. those are the challenges we face as we look at the market. it's exciting. there are so many innovations and things we can do to make it better. >> one thing you mentioned to me was an investment you didn't make. that was investing in a company that does ehrs or emrs, that creates them. you looked at that, you saw it coming. why did your company decide to skip that? what did you do instead? >> if you know emr world, there are a lot of them out there. now there are some that have bubbled out to be a clear market leader. it took a while. these are 1970s based

technologies. as we're looking at that, it's hard -- health care is a regional business. as you think about, hey, mass general where i'm from near boston, mass general bought this system. that may not be appropriate for providence health system and the northwest, right? so as we're looking at it, it was tough for us to place a bet on something that was going to be a big winner. what we wanted to focus on was the service aspect of it. we did make an investment in a company that does emr o optimization and analytics. athena is unusual, but we'll get into that later. like epic or some of these big systems. >> you passed on us, too. >> we passed on athena about six times. >> you guys need a little time?

>> is that why you put me in the middle? >> athena health was a clinic business so we passed on that. there are clearly some things we missed. as you look at the emr market, what we are finding is after the initial wave of installations and implementations happened, hospitals are spending more money to optimize these systems. you can't print because when we built this system, the computer was static and the doctor was at the office seeing patients. now doctors are mobiles, using ipads and iphones. something as simple as printing a document becomes a huge nightmare. hipa compliance nightmare. it gets printed in weird rooms and half the time the drivers aren't installed. there are lots of complexities about installing these systems which have this big opportunity in the back end which we are now dealing with. >> where are we now?

yumin talks about the early days. with the penetration of emrs right now what's the next phase? what's the challenge? >> we are still early into it. i remember actually in the early '80s, there was a guy out front of my street. he was actually digging our yard. what are you doing? we are laying down the cable. they were actually literally wiring our entire neighborhood for cable and they had these dirt trenches all over the please and laid these wires in. that's where we are right now. we are actually in the process of just laying basic infrastructure in place. the interesting stuff is just about to get started. that's my perspective on it. as one example of what you can begin to do once you lay the cable, these days i think i get all my internet over the cable modem center buried in those wires. with the infrastructure we have in place today, one thing we are able to do with athena, we have

85,000 physicians in all 50 states. we can predict things like the flu. which antibiotics work in which areas of the country because we have that data coming in. we can see it. we can see where zika or people have protection medications are beginning to pop-up and appear. we can say watch it, you should get a zika screening. that surveillance and optimumization can happen once you have the basic building blocks in place, but we are still early. >> the things you're talking about, that's within your network. how do you get past the wald garden of athena and connect with what laura's doing or what vida is doing with stephanie? >> athena, we like to think of

ourselves not having a walled garden but an open patch of land anyone can plant stuff into. in silicon valley there is a guy named bill joy, chief scientist at microsoft systems. no matter who you are, most of the smart people in the world work for somebody else. interesting, right? it's the reason most of the folks in silicon valley collaborate, compete with each other because they know no single company is actually going to have a lock on all the innovation. so they figure out a way to make it all open. we call our program word construction please. we have over 1,000 companies signed up. over 100 are live in our marketplace which is online equivalent of the app store. we make our data freely available, identified to working with folks at cdc, et cetera. we have taken a very open stance to everything we work with.

we think it's very important. we think it's inevitable that is what is going to happen going forward. >> stephanie, you talked about all of the trackers and data sources that you're able to draw upon for your service through the app. what do your customers and patients want? what's standing in the way of them getting it? >> well, i definitely thinker n inner opability. they don't know about epic and athena and don't understand that technology. we have consumers that we have -- they will take the app and show it to their provider or we have a provider report we distribute. i agree integrating into the mrs is challenging. the doctors don't want the daily device data we get flooding their emr either. they just want a summary and

simple summary of analytics and outcomes and understand how the patient's doing. there is a lot of opportunity to work together to make it simplistic both for the consumer and providers to distill down here is what's going on with the patient real time. there are a lot of things that happen between doctor visits that are important. they are sometimes more informative than the seven minutes the doctor has. >> what would be an example? >> someone's blood pressure on a consistent basis. someone's heart rate when they work out. their water intake if they have chf or copd. there are so many different variables if they have crohn's or ibs what they're eating. there are a lot of stress levels, a lot of things we capture that are important for the physicians to understand how the patient is doing on an ongoing basis. >> what is your perspective on this? you're calling on customers who have their own emrs, working or

competing with other systems. what do you think is the way to maybe get through or over some of these barriers? >> it's interesting. we've got a global business and we see different things certainly in the u.s. and rest of the world. a given example in the u.s., i think basically we talked about people made the investments in the emr. it's been a significant investment to get those significant records. everyone is struggling how do we get insight out of that? i find some of the more innovative hospitals are thinking what are some patient-focused, high value care scenarios that go beyond that. i'll give an example of chern's mercy in kansas city. tell you a story of a young boy named winston. he was born with missing part of his heart. children with this condition need a series over their early years of like three different procedures. the first one at birth and between a period of 9 to 18

months, there's been a mortality rate of 20%, 25%. what happens the parents are going home with their three-ring binder, monitoring, faxing in information on some frequency about what's happening with the child. the problem is when they get ill, they take a turn for the worse rapidly. winston was fortunate -- we met this little boy -- this happened to him but he was in the care o children's mercy center in kansas city who built an application called champ that leverages a device, it could be any tablet. they built an application. monitoring is done realtime and recorded, data stored up in the cloud along with video image data. a physician could see stress changes in the visualization of that child. they run analytics. if it hits a certain trigger, they'll alert the physician to take a closer look at this patient. for winston, that's what happened. basically this champ application

saved this child's life. but this is a case of how do we think beyond the realm of what's traditional? how do we leverage new technologies and do things radically different to improve outcomes, but in some ways a simple application that actually can be applied now to a number of different conditions. the interesting thing though, we've got constraints in the u.s. that people outside the u.s. don't have. working with the start-up there called ring-md. they are head quartered in singapore. they're supporting patients all over southeast asia, but work with a government in india. in other areas they work in war-torn pakistan. they've got a patient there who maybe has to travel quite a distance to get a diagnosis. when they get back, if that's not right or they have a reaction to medication, they can't travel again. they built this application where the patient can select a doctor, select a speciality.

they store their patient information in the cloud. they arrange virtual consults and built this up to 8 million subscribers providing health care to areas that just never would have access to board certified physicians. it's one of those cases where you're seeing more rapid innovation outside the u.s., but the potential we have here, and i think the openness and the collaboration between companies and emrs, the whole interop thing will be essential to get those step functions. >> do you have any ideas what the path might be to see more interoptability and more sharing? >> there's been a step function change over just the last five years. five years ago most folks were actually not focusing on inner opability. over the last five years, the% installations has quintupled. the interopability problem

doubled. folks have begun thinking about this and acting upon it. there's a lot of regulation and pieces of meaningful pieces trying to put the hole in the dike. important things are measurable industry progress have been industry collaborations like quality or common well. vendors have gotten together and said, look, we have to figure out how to solve interopability problems. the first time our customers are asking us to solve it. this goes in the category of i think most of these companies will end up reh companies as well as others, as well as other folks in the industry will compete and collaborate at the same time. i am very good friends with executives inside most of the major ehr companies, and we compete in the market for clients, but when it comes down to it, we collaborate when our

customers ask us to collaborate. we think that's very important to do. >> is part of the issue now that even if it's technically possible, sometimes the computing players in the health care system aren't ready to share their data? >> yeah. historically the problem is that in order to execute interopability you have to have two missile keys. the first missile key was technology missile key which is a possible to actually exchange the data? the second missile key was the willingness of the institutions to actually exchange the records to being with. for years there's been this problem where you couldn't turn both missile keys at the same time. we are seeing that change. a lot of that is due to political pressure. a lot is due to the fact that health care needs to be more networks. most institutions will not survive as single monolithic institutions. hospitals are partnering with

community hospitals or urgent care chains or retail clinics forming networks. you're not going to put that all under a single ehr in our lifetime. that's not going to happen. because they are beginning to form these networks, interoptability is becoming an existentially important thing in health systems. i believe we'll see this solved. >> are you seeing signs of that? >> i hope so. >> that has over 200 different systems. none speak to each other or very few do. when you start digging into the weeds of why that's a problem, it's not only that you have these systems, you have different groups that call things differently that have

different nomnomenclature that e different codes. how do you unify that to make sense? it becomes exponentially hard. we're mobile. oftentimes we go to see erp, but now we see the specialist, urgent care. none of that gets translated into one system. if your doctor, pcp or hospital may have information about you, how do you port that in? how do you unify that or build this holistic version of that person? i think there are a couple of different ways you can do it. i don't think there is one way to succeed. the number is typically kept

whether you move jobs, wherever you are, arizona or massachusetts. you carry that around. you start building a real i interesting profile and behavioral profile around that member. there are unique ways people try to transfer data that will start building a profile of you as a consumer and health care consumer. those are the things we are looking at actively. we have a company that goes out and scours to get all the views, the amazon type of reviews. right now you want to see a specialist, maybe an orthopedist and how do you find that? you go online and put the doctors name in. you get one review. parking was horrible. that doesn't help me. how do you start incorporating data that's already out there on facebook? on twitter.

all the important things. how do you do that in a realtime fashion that is scaleable? that's the key. as we look at businesses, it's always, hey, is this something that the market needs? is this something that can stand on its own? can this scale and become a big company, something that can make a meaningful impact? so many of these companies we see are single apps. they're important apps. they can deliver a lot of value. they can save lives, but how do you then make that into a platform? how do you make that into a company? that's real why it struggles that we try to ferret out early on as we think about is this a team? it's really about execution. we talk about technology, integration, implementation, but it's really a team that makes a difference. we try to find are these people someone that have done this before? can they do this? do they have the network in health care? a lot of it is still a people business in health care.

do you know the right people at these hospitals and payers that can help you get this adopted. >> stephanie, you might have perspective on this. how do you take an app-based business and scale it? i'm thinking in particular about this feature of yours which is really making the match with a human being, somebody who is a coach who can deliver a particular kind of service remotely to the patient customer. >> we're really excited to be able to combine the human touch with technology in a scaleable way. we use a lot of technology actually. we have a back end platform for coaches to log in and manage their clients and look at doing synchronized communications. we use a lot of data to create insights that the coach can deliver, machine learning, for example, on the back end.

and there's a lot we have in the works on the back end to essentially automate a lot of what we are doing. we use evidence-based programs, like diabetes prevention program or other programs. it's not just the coach, for example. one example, we took cardiac patients from, that had an mi or stent at duke. we partnered with duke and astrazeneca to post these. we have increase in pam scores -- patient activation measure. we reduced readmissions. i think we only had one readmission from the cohort. we made it easy for the patients to really understand how to comply with what the provider was telling them was important for their rehab and real write

not going back to the hospital. a lot of that was actually a program we built called day by day. it was the coach and connecting to all the devices and data and seeing it all realtime. you can apply a lot of technology to this. i think we all talk about ai and vr, automated intelligence and virtual reality. those things are early, but they're happening. you're going to see a lot more of that in health care. you're seeing solutions where automated intelligence and machine learning is being applied to adhere to protocol improvement, helping not only doctors but patient themselves figure out what to do. you're seeing virtual reality used for mentality health and cancer patients. i think we are literally -- i was at the fortune health conference yesterday in san diego. it was the first, the inaugural conference. i asked them, when was your first tech conference? i've been going to the fortune tech conference. my background is more in tech.

they said 16 years ago. i said we should mark this day because this is the beginning of the health care revolution, right? the next 20 years i think all this technology is going to create scaleable solutions for health care and bring the consumer to the forefront and patient to the center. >> do you have thoughts whether technology can help and things happening in cognitive computing and things microsoft is working in? >> i'd say there are three areas we've been focusing on as a business. put them in broad buckets. one is patient engagement, a 360 view of the patient which we've been talking about and what are the tools and resources available to facilitate those scenarios, whether it's virtual health or bringing in different sources of data to augment the systems and record in the hospital. there's clinical analytics.

what's interesting is i'm seeing a lot of top hospitals we talked to. there is conversation yesterday one of the last presentations about the wealth of data. you talk about digital transformation and digitizing. health industry has riches of data. how do you get from data to information to insights? we are focusing on cloud services that support advanced analytics and machine learning scenarios where you can build new programs and get and derive insights with scenarios you couldn't before because you can leverage the immensely scaleable, unlimited scaleability of the cloud to load large data sets. we are finding a lot of hospitals we talked to are saying we see applications for the data sets we have. it falls into your space a little bit, too, in terms of them saying we think there are offerings here.

i.t. that could be shared out. we don't know what the business model would look like. there's a lot of storming and forming around this. we have a huge amount of focus. the intelligent cloud. how do we leverage the intelligent cloud for application specifically in health care. a lot of start-ups in this space but a lot of traditional companies investing and seeing how they can transform your businesses with the new capabilities. >> when it comes to making information useful and valuable, how do people get paid for it? we talked a little about sort of, you get an insight, how do you get your money back as the supplier of that insight? ed, any ideas? >> i think that's by far the most interesting thing going on in health care today. it's not the technology. it's the fact the business models are changing. the core business models that are underlying health care change. that's where the flow of money, flow of dollars, how you get reimbursed. there is real interest in

changing that. again starting with the 1,000 pages of aca. for better, for worse, it's there some of the pieces i could do without, but by and large the point was to change the flow of money to figure out a way to get you paid more for doing less and taking better care of patients. what i see now happening is an intent to create high quality consumer experiences because that's actually what will bring consumers to your brand. then actually make sure you monetize that. what i'm seeing are super innovated companies trying to take first dollar risk. this idea of first dollar risk or consumerism, those things will actually end up driving a lot more than the technology.

the technology is there to support the business. so you have folks like privia trying to take first dollar risks without the hospitals. they'll take first dollar risks from the insurance companies and try to charge down stream against the cost of the h hospitalizations. you have urgent care chains taking advantage of the fact patients want convenience. you have new york presbyterian who is launching a creative outreach strategy to leap frog other folks in their communities to reach out to patients. for the first time, folks like that who focused historically on the excellence of their service lines are now actually thinking about what does it mean to create an excellent service experience out into the community? so i'm seeing folks from across the spectrum beginning to think about what does it mean to live

in this next generation of health care, how do i need to rewire my own economics to survive, and what investments do i need to make? >> yumin, what do you think about the timing for this? you don't want to be too early. there's a lot of interest in paying for value. is there enough of it actually happening that you can build your business on something? >> we hear a lot about value-based payment and share savings and innovative technologies, yet when we dig into the companies, most our customers want fee for service. that's how it's traditionally done. we are definitely seeing the shift. it's taking a long time. i think it's going to accelerate. we can have this discussion. i tell all our companies, at least have a pricing model and business model thought through. 95%, 99% of the time it's really

challenging to convince a customer, whether it's a hospital or payer or whomever to participate in that. it goes down to your roi question. how do you calculate that roi? what does it mean for that to be applied? what is that time frame? what are you measuring? how do you know that's actually driven by this one program or not? i think it's easier when you have a model where it is a heavily serviced model and you're caring for them across everything. a lot of our companies -- we have a few companies that do that. a lot of companies touch one aspect or a few within health care. it's hard to then give that attribution of that benefit or whatever the outcome is to that company saying, you're in isolation here. this works. you get 100% of that. it's usually a combination of better service, better technology, better work flow. there are a lot of things that go into getting that roi driven.

once again, going into that multiple stake holders. i think fundamental problem, i would love to see a market where the health care market goes toward amazon model. think about all of us as consumers of health care. we are so far from that. we think, hey, our taxes, 20% gdp is health care, right? it's a big portion of what we pay in taxes. we also pay health insurance premiums, we pay co-pays. if you ask someone to pay an extra $200 to go get certain diagnostic tests done, you look at the payer and go, why aren't you covering this? why aren't you the employer covering this? you get into this mindset -- all of us, i'm the same. you go, i'm not going to pay that bill. it should come out of the taxpayer dollars. there is so much built into that. it's shifting to the consumer starting to get empowered.

we actually sold a company that was giving pricing transparency. we have another company that helps figure out the quality measures for hospitals so that you as a consumer can figure out where to go to get the best quality outcomes. you're starting to get there. but the visibility into that is still opaque. it's not as easy as going to amazon saying this is the cheapest one and this has five stars so we'll buy this. we are still away from that. >> there are huge opportunities today in terms of taking costs out. that's where some of the focus is. maybe pay for service, but the service you're getting is different, where it's delivered is different. there's a partner that we've been working with, iris, who does retinal scaring. most times folks don't get the

scans. 90% is preventible if they got the scans. this company has put the devices in the physician's office. you skip having to go to a separate specialist appointment which they likely weren't going to get done anyway. engage that with the specialist to do the readout and come back. that's taking cost out of the system. it's avoiding canceled appointments. the wait delivery and where it's delivers is like low-hanging fruit taking costs out of the system. >> i agree. what we are doing is taking costs out of the system. we are telemedicine, enabling a lower cost model for managing chronic conditions, prechronic and chronic conditions. there are two things that are really important that are happening right now that are driving us faster to the consumer side or the ownership by the consumer. number one is cms. they are pushing for value-based payments. they said 50% of payments are going to be value based by 2018.

they are not relenting. they are pushing aggressively on this. there is pressure in the system. they drive a lot of the spend. number two is deductibles for the first time, you're seeing a lot of noise, especially around this election cycle about essentially wages are flat. deductibles and premiums around 63% in the last five years. the average consumer -- there was a study that came out a couple days ago, 50% of consumers in the u.s. cannot afford a $2,000 deductible. you're really seeing for the first time real financial pressure on the architecture of the system. consumers, if they're having to spend money out of their pocket, they're going to become more vocal. these two trends are pushing the system. the question is how fast will it change? >> what do you think as far as the role of cms in moving some

of this stuff along? >> cms, everyone takes signals from them because they are the big dog pair. when they say they'll put their muscle behind telemedicine, most others will follow. most folks will take what they do and try to improve it in some way. at the end of the day though, i think to your point, short savings, right? short savings are a half step. i see very few people who are super serious about short savings, per se. most folks into that are into it for one of two reasons. either they're into it because they want to improve quality to patients. they want more patients. that's one reason. the other reason is because it's a step on the way to global risk. for those people, they want to go as quickly as possible and bypass the whole share thing. why don't you give me the whole dollar instead of 50% of the dollar? that's the other major model as that begins to happen.

i think cms' role is singular in terms of how they want to pay. they are unrelenting in how they are actually putting this out. with that said, they are adding an awful lot of regulatory craft to the system. there are 21,000 pages of legislation since the ac was passed. i've read through a lot of it. it's depressing. i don't know if anyone else read through the regulation. it's mind blowing. i think what i'm concerned about is the unintended consequences of value-based reimbursement as defined by regulation. it would be a lot easier if value-based reimbursement were defined by getting other economic actors out of the equation. having good care from a provider that i trust and i get the outcome that i want. that would be easier as opposed to all these quality measures and cost measures, and thousands of pages of regulation, which

candidly suck up an enormous amount of innovation just fire power. everyone i know who is smart is focusing on how to keep their head above water. not as much innovating the core systems. anyways, long story short on cms, i think they are playing the role of singular. my hope is they can peel back on regulatory pieces of it. >> yumin, is there enough of a market so if cms signals and regulations can be navigated, do you see your companies navigating the market? >> i hope so. even with the regulations, there's going to be innovation, there's going to be companies. we need it. there is no way we can sustain 22%, 25%, 30%, it's not sustainable. at some point, something's going

to give. i think it has to be a combination of things. i think cms is not only a signaller, they can move markets. a lot of times when health innovation happened, emrs are g to be, you know, prevalent. emrs take off. meaningful use, all these different things come out, you know, it's always, you know, an it rags of the previous so it's not that crazy. that's not the theory. that's the status quo. you have a slifd ade of all the different files. i'm surprised it is that organized actually. and you cannot get rid of facts -- i think health care is single handedly keeping fax machines alive. it really s i recently tried to fax something to my insurance

company and i couldn't find one. i asked my assistant, we got rid of it five years ago. nobody is using them. yet, that's -- we have a company that pulls medical charts from hospitals and faxes it back to the insurance company. right? we have a company that specifically is aiding and abetting this, you know, proliferation of faxes which i'm horrified with. but that's where we are. so as you think about oh, yeah, digitizing and mobile and ipad and apps, there is this big 95% of hk is still driven by paper, pencil and emrs. how do you pull the right things from the charts and put night di digitized format? we're in that transition period. hopefully we come out with lower costs, improving quality and better consumer experience. but it's a way to get there. and the timing once again is the

issue, right? i don't care who you are. there is no way you can say we're going to get rid of faxes by x. it just, you know, the government can say that. >> actually, faxes were specifically protected as a -- >> i think so. >> they're protected as a special class under hipa. >> exactly. >> health care keeps the industries alive. when the cogovernment comes in, they say we're going to get rid of all paper faxes starting 2020. that will move the needle. can we get there? probably not. i think there is it government m mandate that drives health care now. that won't change. that being said, we're still very positive on innovation. even despite all the different things that have happened, there are innovative companies coming

in. a lot of technology coming in, a lot of services coming ncht once again, these aren't revolutionary in the fact that you have a new business model. you have a any integration. you have a new work flow that helps get these adoptions happen now that weren't possible, you know, five, ten years ago. >> in our discussion we talked a lot about what tech can do for health care. we're at the limits. one of the things where we're still going to need humans, we're still going to say substituting an algarythm or approach to this particular problem may not be the way to go. do you think about that when defining your own business and sort whast objeof what the obje? >> absolutely. health care is all about the human, right? empathy and compassion and all the things you all practice every day if you're a provider or pairs, this is the essential.

there is no -- so we -- that's why we do pride ourselves on the human touch and we use a lot of technology and we get asked a lot of questions like how do you scale, you know, why don't you adjustment use ai in bots? get rid of the humans. we're not going to get rid of the humans. you can't really form a long term relationship with an individual or really get at the root of their motivation or behavior change without a human element to it. you can use automated intill jens. you can use bots and a lot of technology to augment the human relationship. and that enables scaling. but the human element is essential. >> i think it's going to end up -- i mean, for much of this is going to end up requiring a shift in how we think. the human is at the center of the decisions. but i think that we're going to

see computers helping humans and humans helping computers. you're not going to be able to tell the dufrns if ifference if this right. people doll well what they do and computers will do well with what they do. but this is going to happen over a long period of time. we can't, for example, these days actually even deal rationally with the care. we don't know how to have -- we don't know how to make decisions. we're not equipped with the mental frameworks. we're the oldest generation. we're just going in the oldest generation with new technologies to help support. but the intersection of the -- those kind of human decisions with technology is going to be how health care is going to be driven. i think it's inevitable that's going to continue to just push forward glacially. i think we know where it's going to end up. the question is what is the path?

it's all in the timing. >> it's interesting. to me, it's almost like back to the future. we want to get back that human element of the doctor-patient engagement. it's about having the technology in the background not the foreground. the issue is physicians are in front of the emr typing. so we really have to be focusing on it as an enabler to allow the humans with their intellect to do what they do best and make them more efficient. that has to be the design point that we go forward. >> right. >> you mean you're going to get the last word here. >> great. >> there is a dichotomy of technology and service. there are certain things you just don't want to deal with human beings, right? you want the answer, the price. just tell met price. don't give me the run around. tell me this or this. which one is better. you go on to web md. everything is cancer. you have cancer. everything that you put in will

lead you to cancer. i actually have cancer last year. i can laugh about it. but, you know, when you are a consumer of health care, when you're in that seat where you need the care, right, a lot of care is as you said, mental and emotional, behavioral health. that can change the outcome. that can change the outcome of how you interact with people. and we can -- we have a company that can show you that by dealing with the mental and behavioral issues for someone that has gone through a medical traumatic event. we can change the outcome and the readmissions, medical spending. and so, you know, someone -- when you're faced with your own mortality and your health care, you want the person, you want to know that someone is caring for you. you want to know that you're in good hands. and you go back to the basics of what is health care? it's human to human. it's community.

it's beyond sick treatment. it's really the health care of that person before. they get sick, during the treatment and afterwards. right? that's what we want to strive to do with health care. you want to be there before that person gets chronically ill. before and after and we're doing end of life care. you want that human touch. i think technology has an important role to play. we absolutely focus on that human element. >> thank you very much for a wonderful panel. i hope you guys enjoyed it as much as i did. >> president obama and president-elect trump are meeting at the white house today to discuss the transition ahead of mr. trump's inauguration in january. and after that meeting, white house press secretary josh earnest briefs reporters. that scheduled to start at 12:30 p.m. eastern and when it does, you can see it live here on s n

c-span3. >> c-span, where history unfolds daily. in 1979, c-span was created as a public service by america's cable television companies. and is brought to you today by your cable or satellite provider. >> coming up later today on our companion network c-span, a conversation from smithsonian associations on campaign 2016. we'll hear from democratic and republican pollsters and reporters from cnn and msnbc. that is live at 6:45 p.m. eastern on c-span. and friday is veterans day. at 11:00 a.m. eastern, president obama lays a wreath at the tomb of the unknown soldier in arlington national cemetery you can see that live on our companion network c-span. >> up next here on c-span3, a conversation with the assistant

attorney general for the justice department's criminal division on investigating international corruption and fraud cases under the foreign corrupt practices act. that's a federal law prohibiting americans from bribing foreign officials. from the george washington university law school, this is 90 minutes. >> good afternoon. i'm roger fairfax and the associate dean for academic affairs at gw law and on behalf of the president, i welcome you to the george washington university law school. i will hand over the podium momentarily to my colleague who will formally introduce our two distinguished panelists. but first let me say how thrilled we are to host this discussion of the foreign corrupt practices act. one of the most significant issues con fronting us to day. among our full time and part time faculty are many who like myself served as federal