moving fast to meet a deadline which many believe is an unnecessary deadline there's a lot of gaps in the plan, substantially as well as cost wise. as a result you're having a lot of different factions dropping out of this. you have more liberal democrats have concern with a public option. you have more fiscally conservative democrats that are concerned there is a public option. then you have republicans that are concerned that they haven't been involved at all, at least from their point of view, which makes it difficult to move something to the senate even if you get one or two moderate democrats, ben nells, lets say, to come over to the republican side. so it does have to be i think a pretty perfect shot at it. but everyone wants it. i don't think this is merely posturing. both of these parties want to do something. they have very different ideas as to how to do it. it's a question if they can find a middle ground. >> senate majority harry reid and speaker plossie are

determined to get something done. the process is very messy. the flip side is people having concern that this can happen is the fact that they are pretty darned determined to make it happen. and they will from talking to people i talk to normally, the threat of keeping the senate in session is not a fake. if they have to, they will keep the senate around for an extra week that f that means getting a bill passed. >> what does this say for the white house strategy to not drop a piece of legislation and let both houses debate that but let it foment up from the congress itself with just broad outlines? >> it's difficult because the last time they dropped the legislation and it was a terrible failure for them. this time they chose an approach they thought would be much more effective. but when you get into the details of any sort of plan, one that's wide ranging and expansive as this, people are going to start having concerns about it no meat what way you

went. but the thing is, people understand this has to happen. it has to happen now. the timing of things with the next election coming up and what not, this is one of the best opportunities they're going to have. i think there's a great amount of determination to find this way getting done, even if it meanses pushing into the august recess. >> are the broad parameters visible? >> of the bill? rf of what people might expect for a health care system coming out. >> i think if you look at the finance committee bill and the senate health bill, you're going to see insureds, pretty interesting insurance market reforms. you're going to see an exchange of marketplace where people can shop for insurance if you don't have it. in orbits kind of way. i would say given the democratic congress, you may see some sort of alternative to the private insurance market. that's still obviously a big challenge. but i think there are broad outlines that are out there.

and you can see a situation where i think every individual is going to have to buy insurance, which i think will be a big change for the culture of this country. because we don't really have that at all right now. we have that for auto insurance. but that will be a big culture change. >> what to look for in the week ahead? >> a lot of things are happening in a lot of different places. the senate health education and pensions committee finishing their negotiations after three weeks worst of going through every little bit of the bill. fin bsstit waiting to put their bill out, while the house is starting to move their bill through. a lot of details going this way and that in an attempt to find something everyone can agree to. >> thank you for your reporting and questions to our two members of congress. >> thank you.

>> in this portion officials of the congressional budget office discuss health care cost. it's about an hour and ten minutes. >> i have a couple questions for you and let you make some opening comments. the questions i have are simple and straight forde. one, i appreciate very much talking us through the changes

that resulted in the $611 billion score of july 1, which is more than a $400 billion less than the scores of june 15. and we're all working to get those numbers down so i appreciate the response to us. and i would hope that those numbers, while they're final numbers in this sense but a lot more work has to be done before coming, and the jurisdiction is limited to certain questions. we don't have the right to vote on others. so we're dealing with some speculation, but in order to get numbers for our committee so we know where we're headed, i found these to be far more optimistic than the earlier numbers were. so the question, what would happen to the number of the uninsured if the individual mandate was eliminated, as some are suggesting. what happens to employers sponsored insurance in the absence of an employer assessment. and i again thank those who raised various ideas as to how

to do that and found that to be the answers to it interesting. and, thirdly, under the cbo's estimate of the 15 to 20 million additional people covered under a medicaid expansion, coupled with the 20 million cord under our bill, that would seem to account for 97% of americans. in your letter you suggest that even with a medicaid expansion, which is not our jurisdiction, i appreciate the point being made, the number has been floated around of 150%. whether that is going to end up being the number. but this committee doesn't have the ability to legislate on that number. so we can go up to the lines on senior citizen things and do our job, but there's an additional number here of the 15 to 20 million range. and i wonder if you can provide a breakdown of who the 15 or 20 million are. and is there any proposal in the estimation of cbo that would cover this population. so those are the questions i have. others will have their own.

>> thank you, mr. chairman. yes, i have the whole series of questions. and look forward to getting some answers. i think it's very important that we have this session and that we get these answer soss that we know how we're going to be affected as we do the bill. do the bill. among some of those questions among some of those is how much the new employer tax would actually create and -- in the table that you sent us analyzing the affordable health choices act, it shows a net increase/decrease to be about zero. and it seems to me like that would affect people a little bit differently, so i'm going to ask you to unpack that for me. because i think it will affect some people and it won't affect other people and it comes up with a net zero but i don't think it really is zero.

and i need to know why the c.b.o. assumes that a penalty that's far lower than the cost of health insurance would motivate employers to continue to offer coverage. it seems to me like if they can pay 750 instead of 5,000 that there would be quite a few employers dropping out of buying insurance and sending it the other way, particularly in an under employed market like we have now. and i'm curious about why in your letter to senator kennedy on july 2 you discuss the impact the new government run plan had on both health care and cost premiums and you said those provisions did not have a substantial effect on the cost or enrollment projections and wasn't projected to have premiums lowor than those charged by private insurance. that's interesting. it's where i thought it probably would go but i want a few more details on that. and i've got a few more questions here, too.

but rather than put them into the opening statement. we need to know more about the costs. 70% of the people that have insurance are happy with their insurance, but they're worried that costs going up will increase their deductible or drive them out of the market. and we have to be worried about that 70% as well as the ones that are uninsured at the moment. and we don't get to -- i'll have to question the 90% insured a little bit because i don't think we get anywhere near that while we drive up cost force 70% that are happy with their insurance. >> thank you very much. welcome to the committee. >> thank you, mr. chairman, senator ensi and other members of congress. i will try to answer a number of half dozen questions that have been raised and then i will let phil answer the others, mostly leaving the harder questions to him. a mandate is -- to address the

role of the mandate. that makes a big difference in our estimation of a number of people who end up getting insurance coverage who would not otherwise have it. that is partly because the mandate has financial penalty attached to not following it and it is partly because people follow the rules, sometimes even apart from the mandate. people pay taxes. just because they might be caught. >> the individual mandate. >> that plays an important role in raising insurance coverage as much as the proposal does. secondly on the free rider penalties, that makes an important difference in the cost of a plan. on the coverage you chief. i will let phil talk about the specifics. the people -- the 15 million or

20 million who would be uninsured even with a medicaid expansion attached to the legislation, may be one-third of those people are an authorized immigrants. one could devise policies that would cover them but your committee has chosen not to go that direction unless -- you will not pick them up. another one-third of people without insurance are eligible for medicaid under the medicaid expansion but would not take that coverage. we see that today. a good number of people who are eligible for medicaid are not enrolled. they have the opportunity to go into medicaid if they end up incurring large medical expenses. many are people who have not been to a doctor or hospital recently. they have not needed insurance coverage and is there if they need. one might think about those

people in the current world and in the world under your set of reforms as having the opportunity to get insurance when it is necessary. the remaining people who would not have insurance are those for whom is still expensive for do not follow the mandate despite the risk it will get caught and face some penalties. not everyone does follow the rules even when there is a cost to get caught breaking the rules. you are right. the net change we estimate close to zero. that is the combination of a number of significant flows of people as was the case for the first estimate we did for this committee several weeks ago when we explain the net change in that proposal represented a combination of a number of different flows and i think phil

will have some numbers to offer about the breakdown. i will speak to why a low penalty has the effect it does. the last thing i will tackle is the question of the public plan. as you noted, we wrote in our report that the provisions for the plan did not have the substantial effect on the number of enrolled exemptions. we think that there would be an effect from the introduction of an additional competitor in some insurance markets that are highly concentrated. that is a little effect. to have a more substantial effect to a public plan on costs, one would need to empower the plan in some way that makes a more distinct from the plan -- insurance plans that are currently operating. a significant share of current

insurance is your nonprofit insurers. to be nonprofit does not make @@@@@@@ @ @ @ @ @ pay lower rates to providers insurers play. you could legislate that they pay the rates that are paid under medicare or under medicare plus 10% or something else of your choice. if one bring that is linkage then one can pay lower rates and we think still attract a verywide array of providers and

that would lower costs. but there's no mystery to that, it lowers costs by using the government's market power to just set lower prices. lower prices. there are ways to -- one could set rates that are below private rates without linking to medicare. one could say here is the rate of this plan. take-it-or-leave-it. we think a significant number of providers would take that but not as many providers as would take it if it were cling to medicare. the more you try to reduce the prices you pay to providers, the more providers you would lose and one. is medicaid. it has providers who except it but have -- has providers that will not accept limitations and that is the trade-off you face. you lower the prices. that is the sort of letter that one would need to give to a

public plan to have a be a substantial savings and cost relative to other insurers. >> if i could follow up on your question regarding the employer mandate and the issue about why does a seemingly small penalty of relative to the cost of health insurance seemed to help encourage employers to continue offering coverage and people to stay in that coverage. one way to think about it is the difference between paying the penalty and paying for insurance is when you pay for insurance, you get the insurance in return. there is something of value for money. if you pay the penalty that is from the firm's perspective, money wasted. that is one reason it has an effect. the concern is you are offering the subsidies in this insurance exchange that some workers could get. why what the employer not just say i'm going to stop offering

coverage and my employees can get the subsidies in the exchange? one thing that affects the comparison is the offer employer coverage, there is a subsidy that comes from the tax subsidy under current law. people get insurance through their employer did not have to count that as taxable compensation. that is a subsidy of 30%. the factors into the calculus for the employer as well. for an employer -- when an employer makes a decision to offer or not offer it has to do that for all its employees. in general, firms have a mix of workers. some are lower or higher income. the higher income workers would not be getting subsidies in this insurance exchange so would not be attractive for them if the employer dropped coverage. nevertheless, we do in our

modeling as you pointed out, we show a net #, annett to affect in our tables for simplicity, but there are some flows behind that. some people gain coverage and some decide to offer coverage as a result and in particular because of the insurance mandate, we think this will lead some workers to say, we want you to offer coverage that you did not offer before. in some cases, four firms, this would probably be more true for smaller firms with lower wage workers who could get subsidized coverage through the insurance exchange. they might well decide that they are better off paying the penalty and not offering coverage so their workers could get the subsidies in the exchange. we do have -- that is the offsetting the effect of flows. a few million people who we

project would have coverage not having it as a result of the proposal. >> could i follow on something he said? >> i want to maintain some order otherwise it will get chaotic. >> you said that about the tax subsidy to employers and employees for the health benefit. if we were to tax health benefits, that would therefore -- of this is a question, that would cause more employers to drop coverage and go into the exchange? >> it depends on how you do it. if you eliminated the tax exclusion altogether, that would remove the subsidy from that side of the ledger as the employers and employees decide what to do. if you count the exclusion that would have a more limited effect because that would only affect some workers and some firms.

it becomes a question of for the employer, is the employer taking the interest of their workers as a whole into account, would it be beneficial? would enough employees get a subsidy to move the way in this exchange? we do project a modest loss of employer coverage in the million or 2 million range. this is relative to an employer based system that is covering 150 million people in our projection. the number can seem large and the percent of employers that are responding, it may be relatively small. >> there is a big difference between the employer exclusion and the employee exclusion in terms of taxable benefits? they are both excluded now. if you maintain the employer

exclusion, but tax the employee, and you give a tax credit in effect of that, you will have $185,000 of income before you have negative tax benefit on you. there is a difference between the employer exclusion and the employee. it needs to be clear for this discussion. >> depends -- if you could replace it with a deduction. that is right. >> i will defer to others who have questions. i appreciate the good work cbo has been doing in trying to inform us on these issues. . .

>> depends on what one does in that expansion. how eligibility is judge, a whole number of features about who is covered. a whole number features such irrelevant. there can be a tremendous difference depending on how it is. >> any specific suggestions? >> we looked at -- for this letter, we did back of the envelope calculations for

alternatives. we looked at alternatives for other committees over time. we have seen numbers that are a great deal smaller than five under billion dollars and some that are bigger. -- $500 billion in some that are bigger. there are a lot of variables that you would pick that would matter. >> just to follow up on some of the questions that i asked it for -- and the government-run plan, it does not have any substantial effect, but it could have won on more competition. if we put in some other provisions for competition, that could make a bigger difference than a government run plan. would that be a correct statement? >> it depends on what the provisions are. we believe that competition is important. the way that it would be structured would strengthen competition.

by taking off the table some of the factors that insurers now use when they compete about trying to avoid the worst risks, trying not to cover the costs of pre-existing conditions, by taking those off the table, and then by structuring the insurance market so there was an apples to apples comparison of comparable plans presented in an equal way in the exchange, i think that would strengthen competition. we estimate that would bring down the cost a little bit for all of the insurance areas. >> an important feature of the proposal is that the subsidies are a fixed amount. you do not get more of a subsidy if you buy a more sensible health plan. do you think that would encourage fuel to join lower- cost health plans? -- people to join lower-cost health plans?

>> i am more in favor of increasing competition. >> thank you. >> what is the difference between the chip -- the june 15 number and the july 1 #. i read the letter. what did we do differently here that drew you to this theory different number? >> there were a number of changes. a pretty large one that we have liked it was that the subsidies available would be somewhat less generous. there would be no subsidies for individual families above 400% of poverty at the had been in initial legislation. the subsidies for people below 400% would be smaller. you are bringing down to zero. that is somewhat less subsidy. that pays money for the government. the second important factor was the penalty. it was added for employers that

do not offer insurance. the third factor we highlighted was that the new draft let for employees when offered health insurance coverage from their firm would receive subsidies in extern -- insurance exchange. that is a strengthening of what we call a fire wall. we can see that difference in the net number of people changing from employer sponsored insurance. that save you money. the three changes were some of the most important ones. >> thank you very much. >> do you have any questions? >> thank you. thank you for coming. i know you are probably not getting much sleep these days with all these rapid-fire questions. i think i heard you right.

you said that unless the congress "empowers" the public auction does not do much for competition. >> it does not change the cost very much, no. it had little affect in some insurance market sector highly concentrated. that matters a little bit. >> what it does is change the cost of insurance to the consumer? >> again, not a very much. >> and not very much. >> a little effect. >> we mean a whole variety of things the government might jays -- choose to do, such as setting provider payments, which would give it a competitive a vintage or lower the cost and such a way to give it a competitive edge. >> that is right. what i want to go back to

medicate. -- >> i want to go back to medicaid. you wrote a letter to senator gregg --there is an increased cost of the number of people who will be added to medicaid. is that just the federal cost or is that the federal and state cost? >> that is the federal cost. generally speaking, the federal cost is 62%? >> the average is 57%. the government pays 57% of the average cost. >> the tables we tried to do generally have the federal government paying all of the cost for the newly eligible people at least for a while. i think when we look at had been paying all the new costs for the whole 10-year budget window. we did one that started in 2013.

and then have the federal government paying all the costs% and then phasing down to the matching rate you indicated. >> so the $500 billion includes the assumption that at some point the federal cost is lowered because of shifting of cost to states? >> sir, we highlight in the let thear one of the key issues that could make this cost change was thouch burden was borne by the states. >> that's what i'm getting to. i'm trying to understand, is the $500 billion simply the federal share of the medicaid costtor ten years? then you've got another 43%, you've got another $350 billion that states will be picking up.

>> i think the point we're try to make is we did report the federal government cost. government costs. >> that is 5 . . dollars over 10 years. > -- $500 billion over 10 years. >> one should not think that is associated with a standard map or 57%. most of the expansions and medicaid that we had been seeing from different committees and from different committees and the ones that we used in estimating this number had the federal government paying a larger share than the usual to the seventh tier. in some cases, 100% of the cost . >> what was that? >> do to estimate what the cost will be to states over the next 10 years of a specific proposal in medicaid? have you done that? >> we have been asked to do

that. we have been asked by senator gregg and maybe others to estimate a particular medicaid expansion on your legislation as it stands. we have not had the opportunity to do that yet. those full estimates involve a great deal of time. we've not had a chance. recognizing the schedule your honor, we tried to do some back of the envelope calculations to give you orders of magnitude. this is not provide much. >> you have already been asked by senator gregg and have it in your line of work to do. what a particular expansion of medicaid would cost the states over a period of time? >> it would cost the federal government. the state park is tricky. if there is a certain map, 57% or 100%, and we can calculate the remaining piece of that, say the remaining 43%, but states have a lot of options to how

they respond to a change in medicaid rules. what the end of doing turned out to be more complicated. yesterday we spent some time wrestling with just that question. >> what i'm trying to get at. -- to get at is that one of the ways to reduce the cost to the federal government in this bill is to shift some of the burden to employers. this is through the employer mandate. one thing that nothing is sufficiently understood is how much -- that is not sufficiently in should is how much this will cost the government if we expand medicaid, whether or not we think it is a good program, which i do not. 10% of it is wasted. $32 billion a year cbo has said will solve problems. if i were governor of tennessee,

what would i be looking at in 2015 if this bill were to be passed? what i'm hearing is that while it is not written into the bill is that there are assumptions and the finance committee, and you are relying on these, that there will be a shifting of cost to the state at some time. that is the talk. it is all not -- it is not all written down and down. that is the talk. >> there are plans that we have seen. some examples of we have done, with the government does not pay 100%. there some examples where they do pay 100%. it is not impossible to hit $500 billion. it is possible to hit that with the federal government paying the full 100%, as long as one takes the other variables. >> two more questions. did the $500 billion include any

increase in payments to providers? >> no. >> it did not. my final comment would be this, the talk i heard, the assumption that were being made, was that a possible scenario of the combined bill would be dead two changes would be made to medicate. one would be, and now i do -- like you to comment on this, the medicaid would be expanded to 150% of the federal poverty level. that would be one requirement. the second would be the payment for providers -- there would be doctors to serve the 60 million people who might be added to medicaid. payment for providers will be increased to 110% of medicaid. i called the governors and their own state medicaid office and

asked if that were shifted back to us, our share of it, which tennessee is about 40%, what would that cost us? the increase to $150 million, the state share of that, would be about $600 million. the increase in the cost in payments to providers if we cater 40% would be another $600 million. it -- that is equivalent of a belts -- of about a 10% new state income tax. in other words, these days do not have that money. -- the state do not have that money. i'm trying to figure out whether we are slipping. i want to make sure we go in with our eyes wide open. we are going to expand medicare, there needs to be no possibility that the state would have to pick up any of it or

that we say up front with reputable information about what it would cost in oklahoma and tennessee in connecticut if this shifted gradually back to the state by 2015. center greg's letter and ask questions that will produce those answers. allied to frame a letter to you that would. -- i would like to frame a letter to you that would. >> the finance committee and budget committee are raising probably a whole series of questions that would reflect various formulations of the 100% federal pickups, 57%, somewhere in between, probably tried to get a range numbers what the implications would be. we did not do that because it is beyond the jurisdiction of this committee. we are relying what the committees, with their cells. they are asking for the cbo to score what we have jurisdiction over.

we stayed away from that clear question, which is clearly the jurisdiction of the finance committee. it is a good question. but that is a fair point. the fact of the matter is, and the whole concept of the bill depends on a large expansion of medicaid. that is one way to do, although i do not support it. that is going to be the end result. i would like for us to come up was and then that connecticut would nether -- if those seven the conn never four, we ought to know that before it had sought a bill that assumes we can expand it. >> the burden on state is an important issue. we will try to provide whatever information we can about the effects of that. >> do i need to supplement the letter in order for you to do this or is that letter sufficient? >> you have asked me now. together with the letter -- >> thank you.

>> out by my colleagues to be respectful for each other in regards to time. >> my understanding is if you want to accomplish the extent of coverage that we are trying to accomplish in this bill or are headed toward, we want to do it through having subsidies available to more people and have medicaid available to fewer people so that you said in some of medicaid coverage going to 150%, it was a bad 100% -- it would stop at 100 and. the subsidies was started 100% of the federal poverty level. my impression is that is significantly more expensive to the federal government, because the subsidies are going to cost much more than the federal government's payments under

medicaid. i just wanted to get your reaction on that. i know that part of that explanation may be that medicaid does not pay that. i did want to know what is the trade-off is. >> an important difference between medicaid and insurance to me by 3 exchange is the payments that are made to providers. the other crucial issue is how jenner's the package is in the exchange. -- generous the package is in the exchange. medicaid has extremely low cost sharing. the value of medicaid is in the order 98% or 99%. in exchae depends on how you structure different legislation. the federal government would be paying subsidies that would not take the value up to 98%. it will be a little lower.

that provides some offsetting savings in the exchange. more is paid to providers, but generosity of the support for the package is less. there is also the case that it can be state federal issues. states could be paying something amok -- and medicaid be now. there are a number of features that are at work. moving from medicaid and into an exchange tends to raise the cost to the federal government. >> thank you. >> one clarification on this subject. when you talked to doug about the 10-year window that to projected for senator gregg's request, is that window 10 actual years after implementation of the bill or is that year 2009-2019, with only have a score for 6.5 years? >> what we mean is the 10-year budget window from 2010-2020.

>> it was not acted into 2013, the date you gave, you only have seven years of cost figured in at 5 under billion dollars? >> that is right. in the letter we rode several weeks ago, we emphasize that one complication in trying to extrapolate budgetary effects of the first 10 counter years, is exactly these plans are generally based in -- phased in. >> i just want everyone to note that this action not 10 years wars of cost. gateway of administrative costs an option is mr. the cost -- are disfigured inde those figured i? >> no, in the cost of the

gateways are not included for the community plan. >> the cost for not included. we have just not done all of the estimating. as a matter of principle, of course, they should be included and we will get them in there. i know you have rushed through it. as i understand it, as a new component of the scoring, we now have an employer mandate that any employee -- any employer that if they did not offer health insurance benefits for full-time employees there would be fined $750 per year and four part-time employees there would be fined three and $50 per year.

you also have -- $350 per year. a fine on the individual of $100 a year. with those two editions, and now the medicaid expansion it not formally part of the plan, in the claim that this covers 97% of the american people be made or do we fall short of the 97%? >> we think you are not quite get to 97% of the population. without the medicaid expansion, you are well short of that. we have about 90% of 89% of the elderly population covered without the medicaid expansion.

their other subsidies for people below 50% of poverty. >> the finest in the chart laid out, in 2015, you predicted there will be 35 million uninsured@@@@@@@ @ @ @ @ @ @ @ excuse me, that is off of your june 15 proposal. >> so, our analysis that we sent you on july 2, we show the number of uninsured people staying in around 33 million through 2015 -- from 2015 to 2019 time frame as compared to the rising 51 million to 51 --

54 million in addition to our policies. mandate both fined one employer -- only increased insured populations by 2 million people. we went from 35 million to 33 million uninsured. >> and not have the numbers quite confronting me, but it is good to note that about the employer payments, they are designed to keep people in employer sponsored insurance rather than moving to an exchange. >> i know we have to go to other members. let me ask this. had he modeled what the employer mandate does. have you modeled what the employer mandate does to job growth? >> we are working on it shortly, hopefully. the analysis of the effects of

health-care reform on labor markets should not be specific to this legislation. it'll be more general discussion. it would discuss the debt affects -- the effects of employer mandates to make certain payments. the short answer to your question is that we at cbo believe that over time that the burden that employers face for individual employees is passed into their -- gets taken out of their wages, essentially. this is whether by voluntary choice or by government mandate. the fact that it turns up in wages is why we and others do not think there will be very large employment effects. people with very low wages come close to minimum wage, a mandate of higher payments -- there will be effectively and increase in

minimum wage. that can cause job losses that are small relative to the economy, but important to those people. our analysis and will address that. >> thank you. >> just a clarification. if you exclude the elderly, you get to than 90%. if you include the entire population, you are close to 97%. >> in order to get to the 97% for the non-elderly, have to do some kind of expansion below or provide a subsidy options. >> are you saying with medicaid expansion and the population as a whole -- >> of any closer to the 97%. -- theyou get closer to the 97%. >> my point the medicaid expansions of part of this bill. >> not yet.

>> that is a legitimate -- >> that is over 10-years. >> do you have a question? >> i was talking about biologics. your score does not include any savings from fallen biologics and fallen generics. is that right? it is not in the underlying bill, slicing did not score that. >> yes. >> it would certainly bring some significant savings, some kind of falling of biologics. >> you can reach significant savings third change in that way. we discuss that. >> in the length of the period,

the shorter the more savings i assume? >> i think that is right. the natural trade-off is that the exclusivity period is designed for -- during that time, companies that make the product had a monopoly and they will charge higher prices. that is the fundamental trade- off in setting patent lives and explosives today -- exclusivity times. >> do you take into account the ftc report that says a longer period of exclusivity actually means a longer period meaning 12-14 years versus the five we introduce initially and the president's seven years. 12 years acting means less

innovation. -- actually means less innovation. you take into account that ftc, the only non industry city out there, says that is not the case? >> i am not an expert here. i may be wrong in my judgment about that. we would certainly take into account what outsiders it. we had a meeting with a dozen people from the ftc last week. we have an ongoing relationship with them. we take advantage of their expertise. i can check whether miy judgment is correct for people at cbo with more expertise have a different view than i have and we can get back to you. >> can respond to the committee about that? obviously, it is clear that the

longer expanded the more money state. the longer expressivity, -- an exclusivity mean the difference between 12 or 14. that means less innovation. if you think that was within the next 24-hours, we can make these determinations. >> yes, sure. >> within the next 24-hours. i would like to know the follow- up. i would like to get back to this employer mandate. thank you and your staff for the hard work you have done. i'm sure there have been countless hours put into this hours. we may not always agree, but we really appreciate your effort. on the employer mandate, i think we are in agreement that the primary generator of new jobs in america is small business.

there are many of those small businesses, although not all of them, that the minimum wage for the that is the nature of small business. according to this, $750 penalty for each employee and $350 for each part-time employees will be lost if there is no health insurance and provided to employees. i think we very badly need a steady as to what that does to employment -- study as to what that does to employment and small businesses. that is our hope. that is what we really rely on. i can say an employer that has 30 employees saying, i would lay off six people. i think this can have really significant impact. i suddenly hope there is some

way that you could ascertain what that impact might be. can you? >> our analysis that we will release shortly will confront the issue squarely. aiding the literature on the -- i believe the literature on the effect of minimum wage on unemployment is controversial but is consistent with the basic economic logic that higher minimum wage does cause some to implement laws. the effects are small, and our report will talk about the size of the change in the minimum wage that a health care mandate of different sorts might impose. we will review the literature and the evidence on that. >> my evidence is in total. i can tell you from talking to

small business people all over my state, they are sure to get dicks -- they are scared to death of this. most small businesses are on the margin are going under. today we see that all over america in the unemployment numbers. obviously, we misread the economy. i think this is a very important and vital issue. have you ever done a study as to the effect of the economic effect of we importation drugs? >> i think we have written about that. i am not familiar with it exactly. >> we have looked at that in the past. >> if you have, i would like to have that information. had you ever done a study, for example, of the effects of malpractice reform in california? it is an example of significant medical malpractice reform.

heavy denny study on that? >> there is some discussion of that on our volume from december. >> do you remember your conclusion? but our assessment -- >> our assessment of the literature is that changes in malpractice in the legal structure would not have a very large effect on the spending of medical practices. there can be some direct savings from a reduction in the size of the judgments that are rendered. more indirect effects are making doctors less offensive. it could be quite small. that may be because even with reform, doctors will still be reasonably defensive. looking at the evidence, the

stores of changes that have been enacted in different states do not change the defensiveness very much. >> maybe you could call out into other states that have enacted medical malpractice reform, because i am told that they have significant reductions in health care costs because it reduces the practice of defensive medicine. perhaps we have different information. if the government insurance option has no enrollment in fact, then how does it keep insurance companies on this? >> our view is that a public plan would attract and relieve the issue that we pointed to in our letter to you -- we do not think it has a significant effect on the total number of covered people, but it would attract those that would otherwise be enrolled in other insurance plans.

>> i thank you. i hope that we will look carefully at this issue of how much cost shifted to the state. i think we ought to realize that we have states like california that are issuing out ious. if we are going to drastically increase their medicaid cost, i frankly do not know how my state can afford a significant increase in those costs. it will be important for us to know what those increases would be that will be transferred to the state. good week i'm sure it'll only ta couple of hours of questions to predict couple hours to answer those questions. thank you. >> thank you. thank you for your work. i know yet had a lot of pressure and a lot of work to do in a short amount of time.

in your letter -- i am looking at the july 6 -- july 2 letter -- the top of page two, the second sentence, you say "about 26 million individuals will obtain coverage with the new coverage." that is your conclusion based upon the review of the legislation to date. i guess i wanted to get a sense of the new estimates and conclusions verses the one for me couple of weeks -- the one from a few weeks earlier. do you know that number? >> that was one of the factors that led to the substantial

reduction in the overall cost of the more recent proposal. fewer people would end up in the insurance exchanges in getting subsidies for the various reasons that doug indicated. the subsidies were made less expensive. it was made more difficult for people who had an %@@@ and because of the penalties on employers made them somewhat more likely to offer coverage is and not have people end up in the exchange. i think people ended up around somewhere around 39 million or 49 million people in the exchange verses the 26 million. and that was certainly a factor in bringing down the cost of the proposal. >> i guess, but one question i have and this is a hard one to answer because i know the limitations you have, but one of the frustrations you have -- we

have and i think the american people have is that there are policy provisions, or parts of our legislation and the finance committee legislation which are not squabble for a variety of reasons. ecord, if you could just walk through some of that if you can. the reasons why you cannot score particular things or provisions in a lot of the literature and analysis -- there is indication that there are savings. i think it is important for the record to walk through why you cannot score, for example, helps i.t. i think we do try to score those provisions. not everybody is satisfied with that scoring. the evidence that we can draw on is quite limited. when we scored the health i.t.

provisions, we included the effects not just of the direct financial transactions to encourage the adoption of i.t., but also the indirect effect on the number of medical tests order. we concluded that there would be fewer tests ordered and procedures done. you could see -- we incorporated the effects of that on future medicare spending. we also incorporated the effects of those changes on non-medicare patients. we looked at the effect on cash compensation. we incorporate behavioral responses. >> it is a specific estimate, though, because we do not know how much of the arrival of arrivali.t. -- rival of health

i.t. would do. it is hard to judge. the sort of thing is included. we do try 8 to bring all the evidence that we can on health care quality. it depends on what you are looking for. we do cost estimates and then we try to provide information larry king. we do not agree -- and for a nation where we can. we do not report on how healthy americans will be. that is beyond our scope. the system and the benefits that she may get some quality initiatives -- that is some of the benefits that he may get on quality initiatives. we do not report health.

we do try to report on ways that would reverberate back into federal spending. >> one of the key factors is having more information, i information.t. -- health, i.t. --may have to change the incentives that people face. just because someone has that to mean that they will use it in with a lower cost. sometimes a means of lowering your own income. that is a key factor. thank you. >> i have two votes. i will stay here to finish your question. we will take about a three minute break and come back. we will not try to keep you too long. i apologize. i know you are busy. >> we will try to stay.

when the next committee asks me where their numbers are, i will refer them to year. >> i will take two hours figure them out. >> following biologics, the patent protection and that at the exclusivity is not the same intellectual property protection. i cannot understand why we do not realize that it would take away the robust and exclusivity from companies, there will not be any products. it is that simple. that is why we have to balance that. we worked hard to get that to 12-years. they wanted a lot more than that. that is an important factor that i do not think your data has really done the job on. that is not meant to be a criticism. i think it is true. >> i do not know a lot about this area.

we will have to check -- we have a large organization of people that know many things i do not. we will check with them. >> this is a similar bill to hatch waxman, but it is different because of the nature of biologics. you need to look that much more carefully. i can guarantee you that these companies have to raise the money to develop their follow-up on biologics. it is going to cost $1 billion and take 15 years in many cases to get to hopefully successful drugs. it didn't have enough data as lucidity protection, and there does not going to do. people are not going to risk the dollars to do it. this is an area where we may save more money on health care than any other. all forms of stem cell research, in my opinion. the master of the public plan versus the option. your letter says it will not

have a substantial effect on cost or enrollment. am i correct? >> yes. >> how much money with the federal government spending to create and operate the government plan over the 10-year window? >> i do not know if i know the answer to that question. the plan is not receiving subsidies from the government. it is being run on a basis where it has to break even in its own finances. >> can make an estimate at all? >> i think it would basically incur the costs that a private insurance company would enter an operating the insurance plan. >> my question is if it makes sense to spend any money on an option that will not have any effect on enrollment. >> the statement of enrollment

is the statement that the plan had a sick again effect on the total number of people but are injured. we think it would attract its bid again number of people would be enrolled in other insurance companies. it is our judgment about whether that is desirable change. we think there would be a small effect of greater competition in concentrated insurance market. that would have a small beneficial effect. can you give us some estimate of what it will cost? i would like to have an estimate. >> we can look into that for you. >> i think it is important. let me just say this, you talked about the 15-20 million people who will remain uninsured. what is the typical income category of these individuals? would you consider them low- income? >> i think many of them would be. maybe 1/3 of them are eligible

for medicaid. another 1/3 with the unauthorized immigrants. >> what you mean by an authorized immigrants? what people who are in tour country on their own motivation but not in connection. >> people better in here illegally? >> tha is interesting. -- people that are here illegally? that is interesting. how do you encourage these individuals to take of coverage under this circumstance? how much money should we expect to spend encouraging them that what that is your decision. the more that you try to get from 95% to 99%, the more

expensive it will be per person. they have party resisted the subsidies and mandates and so on. they will be increasingly hard to get. >> one last comment. as a person who actually at one time in his service as an attorney did try medicalize -- medical liability cases, i can tell you that when it the things we told every doctor is that you better at the history completely filled up with every possible examination you can possibly make, if that is the only thing that'll save you in court. we all want necessary defensive medicine, but there is a whole smorgasbord of on defensive medicine. it amounts to a lot more than i think your analysis -- and not try to be critical, but i think you ought to reconsider the. doctors are terrified.

these have been over valuations are not necessary. >> question is the extent to the changes in malpractice law can reduce it. >> we do not have been in this bill. that is the problem. that is very difficult to come to a conclusion with regard to medical liability law. >> we have about two minute. >> have a lot more questions. >> you can call us. >> i personally appreciate the work you have them. you have tried your best to do this. it is a very difficult area. it is almost impossible to get right. at this one to parsley thank you for all the hard work and long hours that you are putting in. -- i just want to thank you you personally for all the hard work that you are putting in. >> i want to ask the remaining members to limit to about five minutes or so. i would really appreciate you staying a few extra minutes. there is a lot of interest.

we will get back as quickly as the camp. i'll ask those members to come back right away and limit the times a week nike the longer the mahan -- amid the times they speak so would not be any longer than we have to. we have done a lot of legislation. you are doing terrific job. we brought the number is down substantially from the june 15 number to the delight to numbers. that is great news. although we have a lot of work to do, we are heading in the right direction. we cannot have dennis about your analysis and advice and counsel. we ought to be grateful for what the congressional budget office has done to guide us through these waters. that is a valuable contribution.

we are deeply appreciative of you and your staff. >> thank you. >> stand to recess for 30 minutes. >> today on c-span's newsmakers, michael burgess and bill cassady, but medical doctors on health care legislation currently making its way through congress and what to expect before the august recess. >> i think that the whole deadline has been driven by political purposes. as i recall, tom daschle said the reason that the health plan failed is that everyone went home on august break, heard an earful from constituents and said i cannot vote for this. that is too bad. a political process is trying something that covers 17%.

i cannot look in the crystal ball and say it is going to go this way or not, but i do think the american people are smarter than they presumed to be and they are letting their representatives know now, which is why we're seeing this fractionation in the democratic congress. it may just be that they figured up the scheme and they're moving up their pressure at an earlier date. >> representatives michael burgess and bill cassady on news makers today at 6:00 p.m. eastern time here on c-span. >> house c-span funded? >> taxpayer dollars. >> private donations. >> public support. >> consumer funded, i guess. >> view were funded, i do not know. >> private contributions. >> house c-span funded? 30 years ago, america's cable companies created c-span as a public-service, a private business initiative, no government mandates, no government money. >> members of congress who are

doctors to part in a discussion tuesday about health care legislation. the medical society of washington hosted this event. is about 90 minutes. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2009] >> i want to thank the medical society of district of columbia for hosting this event and all of you from picking -- for taking time from your practices to be here and i want to thank the medical center for providing us with this opportunity. in addition, i want to thank all the staff and various people involved who manipulated their schedules so we could of the

year. -- we could all be here. dr. -- if dr. giordano could come up and a few words, please? but thank you very much, donald. first, it is a pleasure to be here and let me acknowledge the members of the d.c. medical society, and our own at gw staff. dr. stephen nauert was the president of your question to medical center, a trench cable was the ceo of the hospital here and dr. little, who is our medical director. all of you people year, it is a wonderful opportunity and i'm glad i'm here also. morris as me to make a few comments before we started and i thought i would do is talk a little bit about the establishment of the trauma system, the nationwide from a system that occurred about 30, 40 years ago of which was

involved in that least locally. is pertinent to what i'm going to talk about later on. to back in the '50s and '60s, the handling of trauma cases was abysmal. there was no in the system, no 911, ambulances/+ were nothing more than converted cadillacs. to open a door and pushed evasion in and force them into the nearest hospital. at the hospital, where they find? if they could find just about anybody. in a small hospital in south philly where i was a medical student there was a rule that every member of the staff had to serve one day a month or two months or so that i got in the yard. psychiatrists, pediatricians, neurologist and so forth. they did not have a lot of experience with trauma patients. it was not taught as a separate specialty in those days.

the results were abysmal. of the same time, surgeons were coming back from vietnam -- this is the late '60s and early '70s now -- coming back from vietnam and they sought a different experience. they saw what an organized approach to trauma care could do. they not only got better results than previous wars, but also in the community year and they ask themselves the question, why can't we do it here? there was a groundswell of enthusiasm to get it done here that way. the congress got involved and pressed the emergency medical services act of 1971, which basically incentivized local committees to set trauma centers, ems services and so forth. i can on seen in 1976 as investors surgeon and before you know it, i was in charge of the emergency room because the doctor had just quit. the chair of surgery and had set at the time, by the way, fix the trauma thing. it is a mess down there. so, i got involved in the local politics and setting up the

trauma center. we all started meeting in 1977 and doctors, local politicians and even federal people were trying to put together an organized approach. we helped put together an ems service and establish trauma centers. it was difficult. there were a lot of politics involved. everybody wanted to be involved with the trauma center. everybody wanted to to beat at a level one trauma center. we worked through it and it came up with a system that sort of in 1929 and improved considerably over the years. this was not just happen in d.c., but throughout the country. in a short time frame, everybody had their trauma centers and organizations and so forth and 30 or so years later we can look back at that and say, what a good job because we can be proud of the trauma system that was developed at the time. we have excellent institutions, educational programs, out which programs and a ribordy is dedicated to the care of those

types of patients. in 1981, president reagan katie -- came here and we gave him excellent care. we deviated the slightest bit -- have repudiated the slightest bit from the care we would have lost him, but we did not, thank god. we now have delivery of care in this current age where we have a problem and we can solve this problem and keep our eye on the ball, which is taking care of the patient, but the patient first in line, just like we did when we started developing the trauma centers. we can do this like we did then and in a few years will be proud of the system we have a lot. that is my message today and i will give the podium dr. peter vine. [applause] >> in 1817, washington city was in the midst of a health care crisis. the federal city was overrun by

">> and imposters and charltons" the work -- by "quacks, imposters and charlatans this was as given by james monroe and henry clay. since then, the medical society has served nationally and locally on behalf of our citizens. msdc physicians have been treating veteran -- members of congress and federal employes for almost 200 years. once again, as a nation we are facing a health care crisis. the quality and prestige of american healthcare is second to none. the problem with american healthcare is one of our excess, delivery, and cost. we must make the right scientific evidence based diagnosis and to shrug the proper treatment for this crisis. a recent abc washington poll

showed that 83% of americans were satisfied with the quality of health care they received. other polls have shown that 70% to 80% of insured americans rate their health care rationed -- an arrangement as good or excellent. americans have access to high- quality medical yet, an estimated 47 million people living in america are underinsured or uninsured. of these, 20 million are working americans. middle class americans that do not qualify for one of the existing government programs. do we need a whole new health care system or can we fix the one we have. -- we now? clearly, reform is critical, but what type is best? everyone agrees the health care reform is needed. the goal is to reach universal coverage -- coverage and your sallai access. how we reach this goal is a

question of -- and universal access. how we reach this goal is a question of funding. it is critically important -- a critically important distinction and there are many funding mechanisms that will achieve universal coverage. yet, despite many advocates of universal health care idea, there is no example of a public policy will payer health care that does not involve government oversight, rationed care, cost overruns, limits on technology and availability of services and waiting periods. today i suspect we will hear of this funding mechanism and other space on park -- market principles. the goal of all these funding principles, private or government, is to accomplish universal access and universal coverage. as physicians, we have serious concerns about protecting the doctor/patient relationship from the intrusion of the third

party payers or the government. riyadh airport -- a washington bureaucrat -- sorry, joe lun, -- we do not want a washington bureaucrat -- sorry, gentlemen -- or a ceo quarterbacking the decisions of patients. the best thing is to empower patients by placing them back into the health care equation. today, we have a special opportunity to pose a tough question to medical provider members of congress. these patriotic public servants are well versed, as are all members of congress, in the legislative branch of government. however, this group is unique in that they all have years of experience as physicians treating patients, making hard decisions that affect the lives of patients. their knowledge is deeper than reading the new worker, sitting -- studying a think tank opinion piece, scanning for a congressional staffer summary, interviewing people or

collecting more stores. instead, they got to deliver a baby in the middle of a night -- the night, the consoled a family with a loss of a loved one, perform open-heart surgery, or reconstructed a crushed like in a 17-year-old trauma victim. they provide us with a unique perspective unlike any others to yield power in this city. unlike the tv show, these are the real house doctors. this is washington. we have patients and doctors from across the political spectrum to ask tough questions. the wooster with our physician panel and then move to the audience. -- we will start with our physician panel and then move to the audience. please keep your questions concise and feel free to address a specific member of congress if you prefer. thank all of you for being part of the solution. on our panel, and it is in of about a quarter -- an alphabetical order, we have

michael burgess -- dr. michael burgess, and ob/gyn for three decades. he is a kfor term representative from the 26th district of texas. -- he is and four-term representative from the 26 district of texas. dr. cassady, dr. gastroenterology, from the louisiana sixth district. john flemming, family practice, first term louisiana fourth district. dr. phil be angry, and ob/gyn for 26 years, four-term representative from the 11th district of georgia. to 11, fourth term pennsylvania district. rep dr. tom price who is active in the georgia delegation, orthopedic surgeon for 20 years and a three-term representative

for the sixth district of georgia. and dr. phil row, ob/gyn for 30 years, first term from the first district of tension -- tennessee. in addition, we have our physician panel of the yen from msnbc. dr. stuart is a cardiologistç d a past president of the president of the medical society of mr. columbia. and we have an endocrinologist and msnbdc member. >> i'm going to pose the first question to dr. kingergfingry. during health care debate, much attention has been paid to those of or uninsured. as measures to address the fact that all should have health

care, i would us who are the 47 million -- i would ask who are the 47 million uninsured and how would you provide them with healthcare? >> before a specifically answer the, let me thank dr. love line and dr. burana -- dr. levine and dr. giordano and all those of the george washington teaching standard, my fellow members of congress, dr. members of congress in the d.c. physicians who are on the panel. the caucus in the house of representatives was formed this year as friedgen the 111th congress, knowing that this health care reform issue was on the front burner for president obama and the democratic majority and we came together

and have been meeting on a regular basis since then talking about this issue and working on alternatives to what we like to call, unfortunately, during the baby out with the bathwater and turning our health care system completely lock, stock, and vero over to the federal government and a bunch of bureaucrats brother than fixing the system that we have. -- rather than fixing the system that we have. obviously, the concern and the reason that most people would say, including those of us on both sides of the aisle, the system needs fixing because of some of the statistics that have already been mentioned today and the specific question, 47 million uninsured. and of course, the reason for that, because of the high cost of health care, health insurance, and what is doing to

our employer base and our job base and that's sort of thing. we really need to be careful with statistics. 47 million is a huge number and, of course, it scares everybody. but when you peel back and in, it is important for people to understand that within a 47 million you have about 14 million of them who are people that are eligible, already eligible because of low income or disability for a safety net programs such as medicaid or the chip program in the various states. 14 million out of the 47 million. . .

could afford a good, solid, basic health insurance policy for themselves and their families but they just choose because of the way the system works, the way health insurance is set up, they choose not to have coverage to, as we say, go bare and kind of take their chances. i don't recommend that, and there's something we can do about that. so i thank you for that question. i apologize for prolonging the answer but i think it's important for people to understand, yes, there are eight million to 10 million to 12 million in this country that have no health insurance because they cannot afford it

or they have illnesses or maybe multiple diseases which prevents them from having access to health care. they are denied the opportunity even if they had the money to pay for it. so that's part of what we want to offer in regard to fixing the system without completely turk it over to the federal government. -- turning it over to the government. >> thank you. did anyone want to jump in with any follow-up there? we'll go to the next question. desiree or joe. >> we'd like to ask dr. tom price from one advantage point we clearly have a crisis in our health care delivery system. costs are rising faster than wages and inflation. many americans are uninsured, and many more use the emergency room as the main source of their care. this, as you know too well, can very costly -- very costly for everyone that does not support

the sort of preventative measures that we as providers know are important for the healthy lifestyle. speaking from the 2000 level, how can congress address the rising costs of health care so that patients can access a quality doctor when they are in need? >> thank you so much for that question. i want to join congressman gingrey in naing you and coming here. the issue of the health reform and the challenges that we have right now were very clear to all who have any knowledge at all, even a cursory knowledge of the system. the one foundation that i think we ought to all accept is that the status quo is unacceptable. all of you in this room who provide care for folks know that the status quo is unacceptable. we can't continue down the road we are on right now orwell be able to provide no quality care for the vast majority of the

american citizens, not even the 83% who are contented with their current health care. if you look at the two big issues that the americans are concerned about, one is the issue of cost. they are concerned about the increasing cost of health care. they are concerned about the potential about losing their insurance coverage if they lose their job or they change their job. if you think about what drives cost increases in health care, it really isn't any different than what drives cost increases in the vast majority of the rest of our society. the issue of liability causes significant costs to health care. not just in the malpractice insurance coverage that is purchased, but also in the practice of defensive medicine, which i believe could be somewhere in the range of $250 billion to $350 billion a year. redundant tests, the lack of a coherent electronic medical

system make it so that i as an orthopedic surgeon when i had a patient come into my office i wroo often repeat tests that weren't necessary to be repeated for the actual care of that individual but they were necessary so that i could make a decision at that point in time or to be able to provide some coverage from a liability standpoint. hundreds of billions of dollars through it. so the liability costs are remarkable and significant. the regulatory apparatus that all of you put up with that make it so much more difficult to be able to hold down the costs of the care that you provide so there are cost drivers in the system that make it so that the people who are either receiving the care to patients or the folks providing the care, the provider, physician or another provider are not able to squeeze any of those costs out. they are inherent in the system. if we look at the cost drivers of the system, i think there are -- and we all do believe --

think there are hundreds of billions of dollars in savings to gain within the system itself so that those 47 million or eight million to 10 million or 10 million to 12 million folks that you don't think can provide coverage we could in fact provide coverage for. and back into a system that made financial sense for each and every american to have health care coverage. and in so doing own and control that coverage so that there are incentives in place to be able to hold down the costs of the provision of that care. >> i think there is some hanging truth here. the administrative costs and secondly would be the cost of chronic disease. cost of chronic disease is going up dramatically. i just read yesterday that the cost of caring for somebody that's morbidly obese is more

than those who are not. i was talking to one of my patients. since she gained 100 pounds but she -- she needs to get new knees. the orthopedists are seeing this offer. i am a liver physician. i saw a cartoon that said, isn't this great, the federal government subsidizing sugar and now it's going to tax soft drinks in order to offset obesity. this is kind of a wow, crazy system we have here. the other thing other than the wisdom of mallor that the safeway has actually controlled costs. the federal code requires differential premiums, thore premiums for those patients who are involved in wellness programs. so doing safeway has kept their growth in premiums flat. now i like that because all the positions would agree if it's not patient center it's not going to work. it's a patient center system

that incentivizes the patients to participate and in so doing there are studies that will decrease the prevalence of obesity. >> our question is directed to dr. burgess. >> yes, sir. >> in this current economic crisis, many are concerned about their jobs, and what would you say to the patient or one of your constituents that says, i'm very concerned about losing my job if i do how would i get health care for myself or my family snrs >> well, the patient that receives health insurance through the employer insurance who then loses their employment suddenly discovers rather abruptly that the employer has been subsidizing their insurance plan usually 2/3 of the actual costs. probably 1988, 1989, congress

instituted a provision called the cobra provision that required that individual be allowed to continue to purchase their insurance for 18 months but they have to pay not even just the full premium, they have to pay 102% of the premium to cover some of the administrative costs. that's a burden that some people out of work saying there's no way they can afford it. we are not very creative about allowing that individual to perhaps transition temporarily into a high deductible policy, a health savings account that might have a significantly lower premium, continue to cover them against something that would not fall into the preexisting conditions trap if they get a tough diagnosis during that interval and then be able to be picked up into a new employer sponsored insurance when they regain employment. but certainly the ability to have an insurance policy that follows someone logically

through life is something that we have not done a good job of incentivizing at the federal level. many things, even the wellness program, we put under the hipaa regulations, we have put some rather strict requirements around that. well, we don't want someone, for example, to only sell to a well population because they offer these exercise programs at no additional charge. well, who's going to think that has value? perhaps the younger individual who's willing to undertake an exercise program but not the person who has gained the 200 or 300 pounds who needs the liver transplant or knee replacement. there are things that we can do about the structure. the insurance reform itself needs to be part of whatever discussion occurs around what we do in proviggede for additional coverage for individuals, whether it be something structured by the government or whether it be something structured for the

government. my preference would be people to pick and choose from a -- i lost my job and i am not going to be able to pick up this high cobra payment but i can afford the $106 a month that's available through a high deductible blue cross blue shields program that's available on the internet and i can carry that as an individual until i can pick up that next insurance. but currently under the current cobra regulations that's just very difficult to do . we tried to deal with that in the stimulus bill last february. we added a significant number of dollars to pay 65% of the premium for someone who has recently lost work but, again, there's the problem. someone's recently lost work. even just keeping up with their portion of the health insurance premium during that interval between jobs maybe something that most families cannot bear. so, again, i think if we're more clever about how we

structure things, if we build a great deal of more flexibility in the system and you want to put the medical purchasing power into the hands of patients and allow them to control costs. they'll do a much better job than we will or some board. >> i can add on to what dr. burgess said. absolutely this idea of course of cobra, if somebody loses their job and they can continue to get the health insurance through that particular employer. only they pay 100% plus 2% so 102% for 18 months. it may mean that person has been working for that company for 15 or 20 years and developed coronary illness or type 2 diabetes. and what happens after the 18 months runs out and they try to get, as mike said, a health

savings account or individual policy or small group policy? they either have to pay two or three times standard rate or denied coverage completely. well, this is an area where we say we can fix the system in regard to insurance reform by saying to the insurance company, that man or that woman deserves credible coverage. and because they've been paying all these years in the insurance company made a healthy profit off that individual who may be has gone fought doctor at most once a year for a checkup during all these years and then all of a sudden they find themselves in a bind, they get faused out on the street, that shouldn't happen and we can correct that and we can do it in the current system. >> next question will be directed to dr. roe. much of the debate in congress is on a few core issues.

a government-run insurance plan that would compete with the commercial insurance companies. congressional republicans have argued that a government-run health care plan will drive insurance companies out of business, which i can't imagine most doctors have warm fuzzy feelings about insurance companies, and leave patients with only one choice of insurance to buy. and i would ask dr. roe to elaborate on this point for our audience and to comment on the feeling that a government-run plan would actually drive commercial insurance companies out of business by offering patients coverage at a lower price around whether or not we think that's a bad thick and if it is, why? >> thanks for that coverage. we tried this experience with a public plan in tennessee. we have a plan we have an exemption medicaid waiver about 16 years ago. it was a very good noble goal was to provide coverage for all

tennesseans. and what happened we formed a managed care plan called 10 carend what 10 care had was it offered a generous benefits at a lower price. and what we found was about a 45% of the people who went on 10 care had private insurance but dropped it because they could get a better deal on that. and what we found also was when the bills got to be paid, you all know there's a difference between reimbursements and costs. and the 10 care plan paid our providers, our hospitals and outpatient surblingries centers about 60% of their total costs. medicare pays about 90% in our area and the uninsured pays somewhere in between. and it was such a generous plan it became overutilized and almost broke the state budget. and the way the governor in our state and the way the legislature controlled this was it cut people from the rolls. now what i predict will happen is we'll have another overpromising federal plan, it will promise more than pay for

and businesses will make a perfectly logical decision that will drop it and put the person on the public plan. i think what happens it was pointed out in the very first opening statement, if over time you end up with a single payer system, the way they work is by rationing care. once you used all the resources, all the money that's in the system you then create waste. there's a plethora of data around the world on that. there's certainly i believe there's a better way. we've done that experiment. costs went through the roof. i think you are going to see whatever costs estimated by these think tanks and the c.b.o. are going to be way under because our costs were supposed to save money and, again, it almost bankrupted the state. >> yeah, i was going to extend to those remarks, if i could. we already have a single payer government-run system in microcosm which we call medicare.

medicare and medicaid. and most people in america don't understand that it's heavily subsidized by private insurance dollars to the tune of about $1,800 per family per year. so as you see as that balloon, as that single payer government-run system enlarges it puts more and more pressure on the private system out there. the private system is already in competition. there are literally hundreds of insurance companies out there, and this idea about there not being competition and, don't get me wrong, i'm not defending insurance companies. but you see your costs going up faster than inflation and it's not because there's lack of competition. it's because of the subsidy factor that's happening for medicare today. we're having to pull -- examples in your own emergency room. someone comes here, they're treated under medicare, they're paying 80% to 9 -- 80 cents to 90 cents on the dollar.

somebody has to make up that difference. it's cost shifting. so a single payer system, even if it's just an option, and if the rules are made up by the system itself, that is the government, then it begins to impinge upon, pull upon and eventually will cause a collapse in the private system. and so what you end up with is what you have today in the u.k. and canada. if you like what they have then that's exactly what you will enjoy here. and that is that only the wealthy, only the privileged have the opportunity to opt out of the single payer system and go on to some sort of private system. and so as you know we have numbers of people, probably some that come to this hospital today who because they can't get an m.r.i. for a year they come here, get their m.r.i., go back and wait in line for surgery in canada and the u.k. we have to understand that to create a single payer system does not inject competition, it actually destroys it.

>> i wanted to add one brief thing. no one knows at this point the bill will be marking up in committee next week. we haven't seen it. there's a house draft that we looked at last week. there are a couple of senate versions. but one thing that does seem to be emerging, yes, there will be a public option and then there's also going to be some sort of border connector that's going to tell you what kind of insurance will be qualified. and that power actually goes to the secretary of health and human services. i asked a question during a hearing last week. i have a medical savings account. the president said if i like what i have i can keep it. the secretary said that's not a qualified plan, we don't like h.s.a.'s because they tend to -- they're harder to control. if the secretary says my plan is not qualified, then if i like what i have i can keep it rather than until the time they say i can't. we're packaging this public option within this connector or this collectively that's then

going to pick and choose what kind of insurance policies that are actually marketed to individuals. >> i always laugh at my physician friends. we're truly schizophrenic. on the one hand we hate the insurance companies but that's how we make our practice. and we like the fact because they always delay our payment and do these little tricks and we hate what medicaid pays us but we like the way they pay promptly, at least in louisiana, and we like the fact that medicare pays promptly. our hope is we get the payment schedule of the private and the promptness of the public but we'll get the payment schedule of medicaid and the profertness of the private. and i say -- promptness of the private. and i say that because joseph hackler is the brains behind the public plan. and dr. hackler is a ph.d. and political science from san francisco. if it seems strange that a political scientist from san

francisco designed our medical system, that's one of the few things i learned here. we're paying physicians and hospitals too much. in this paper he basically says once you have an ability to assign payment, you shouldn't negotiate payment, you should assign payment. and so it's like a centrally planned economy with supercomputers. they'll figure out the cost of this medical center and they will assign a payment. so i think that would start to give physicians pause who would think, oh, my gosh, may have the good and the good. no, they are going to assign payments but then it's going to be the insurance company superstructure. again, gives us pause. >> well, we forget that medicare is administered by private insurance companies. this is not -- you don't get a check from the u.s. treasury. there's no reason to think that this would be any different except on a much grander scale.

>> you wonder how many doctors will participate at all? >> what if you were required to participate and the condition of continuing of our practice? >> yeah, this is a follow-up question -- a few points have been touched but i think can expand a little bit. so dr. murphy, this question is for you. we have some government-run health programs, such as medicare, medicaid and we have other systems that the government pays basically for them. and as a provider, as a member of congress who has seen the health care from a number of different point of views, what experiences have we learned from this government programs, do we have to change something, what will you suggest? >> well, it's a -- i thank -- i want to thank everybody for helping put this together. this is as far as we know the

only forum in america that's taken place that brings members of congress together who are america providers and other providers and says, what do we need to do? despite the fact that congress is dealing with an issue and sort of rushing through this in the next few weeks that will be an annual spending package with the budget bigger than the pentagon on a bigger basis. thank you, g.w., and this hospital, to get something done here. medicare and medicaid, does it work? well, we're in the 111th congress right now. in the 110th congress there was 452 bills introduced by members of congress to medicare and medicaid. that tells me that members of congress aren't too happy about it. every bill has co-sponsors. the total number of co-sponsors, over 13,000 signatures from members of congress. why does it take that? well, right now you can't change medicare and medicaid except through an act of congress. so if anybody here prescribes

something for their patient ander that on medicare and medicaid but it doesn't allow a certain type of wheelchair, it doesn't allow human infusion therapy. it doesn't allow you to -- the physicians to have such things as follow-up and help a patient with chronic illness. one in five patients with chronic illnesses needs to be rehospitalized. if dr. price, if one of your patient has an orthopedic problem, this is a risky patient with lots of complications. i want someone from my office to follow them up. medicare and medicaid says, go ahead, we are not going to pay you for it. they will pay him to amputate the legs of a diabetic but will not pay a nurse to make a few calls a month. something is terrible with that system and inhumane. we have a system here that's not based upon really working with health care providers, nurses, doctors, everybody else, that we can improve quality but we will pay you what you do in quantity. what comes back to bite us is this talk around capitol hill that blames doctors and hospitals for this.

most care is done in the lars 90 days of life. you know why? because we're trying to save the life in the last 90 days of life. when we look at people with mental health issues, people that has chronic illnesses doubles the risk of mental illness. maybe medicare should pay for that. why? because when you have chronic illness and depression your health care costs go up. regardless of what a physician may prescribe and say, i think you are going to need some help. i just diagnosed you with a serious heart problem. what's going to happen, what's going to be paid for? what we have is burdens and bureaucracy that have been between doctor and patient. i see very little if anything in the history of medicare and medicaid, since the 1960's, which by the way, have not been revised, i don't see anything that's this lightning bulb will get off the donkey. they are designed pre-c.t.

scans, when an x-ray was considered a pretty sophisticated procedure. so very long time ago. we can do much more. but i want to add to the discussion of what's happening with -- can the government do this? if we have a government-run plan of being disguised of the topic of the public option because that word is focused in groups, but it's a goift-run plan, you will anywhere in america buy this plan. you don't have to worry about state mandates. you can join as one big group. any about this. you're wisconsin, new york, new jersey, florida, new hampshire, you have to abide by the rules of your state. what does that mean? states have different mandates, which may have costs. states have different liability costs which add to the costs. states have different -- some would use a community rating. if you're a 25-year-old triathlete, you may pay something that's like 60 years old and has diabetes.

somebody says, i will buy it because it's a cheaper rate. what incentive do you have? would you willing on car insurance, if i never have an accident and i drive safer and i drive my car very rarely, why would i pay the same as someone that smashed his car 50 times? there are issues that medicare and medicaid is not addressing. but if there's a goift-run option, the other programs can't compete. if you're still stuck in your state, you still have all your state mandates, it seems inevitable interest is a huge advantage that government setting itself up to win and to lose. if you're in new york, in is according to the national center for policy analysis, health care plan for family, $12,54. massachusetts, $16,000. new jersey, $10,000. utah, $3,000. huge disparities. but as people, as families, if you can shop across state lines and you can say, i want to join

a group, whether it's through my church or through my alumni association or all the plumbers want to get together, now you have some real situations where people have it. but in addition, i think those plans can be affordable and permanent. if the insurance companies are banking and you will hold that plan for 18 months or so they are not interested in preventing illness. if they know you will have it for the rest of your life they are going to be engaged. so as this discussion comes through what's going to take place in government option, pay attention carefully because it's maybe set up as extremely unfair for you to purchase the health care you want to cover the health care you need. >> let me address it to dr. gingrey. if a government plan does pass, unfortunately, what will -- how will that affect the ability of patients to choose their doctor or their health insurance and for them to make their own

decisions in concert with their physicians? >> well, that's the real problem. and i thank you from all of the panelists in fact have touched on that. and it has been estimated that within a short period of time -- of course, the president has made a pledge during his campaign and during the first 120 days of his presidency that if you like what you have in regards to health insurance you get to keep it. so basically in the draft, the house version, and we in the minority side have not been able to see the devil in the details, but one of the things that i know was in there that says, well, the employers don't have to abide by certain requirements of coverage and standards until the year 2013.

so they basically can say with some legitimacy, well, if you like what you currently have you get to keep it. but make no mistake about it. as soon as you have that situation where this so-called, as dr. murphy was referring to, public option is available and these exchanges, whether it's on a national basis or individual states have their exchanges, once you have that situation, many groups, many, many think tanks, both within the beltway and without say that 120 million people who today enjoy what they like through their employer will lose that coverage because the employer will just simply say, you know, i'll pay the fine or the tax or whatever. i think that's also part of the devil in the details of this house version.

and so you'll have more and more going into the exchange, picking the public option within the exchange because that public option is not only going to be a competitor in playing in the game but they ares are going to be the referee and they are going to be setting the rules and all the regulation. so this is our fear in regard to what the plans we're seeing within the house, all of us are house members, but as we look as what's -- at what's going on in the senate finance and senate health committee, it's a frightening scenario, doctor. >> dr. gingrey, one comment. what concerns me are access to care for our patients. we saw in tennessee when this public option came up and it didn't pay the costs that patients had a harder, harder time to access care. and costs were shifted to private insurance making that cost go up. and that was one of the concerns. i remember a young diabetic

patient 10 years old that had to drive three hours for her care because no one would accept it. and that's one of the problems that concerns me the most about a public option. i've seen it started already in the state of tennessee and it was a failure. we stopped doing it the way it was first plan because the state simply could not afford it. and when you have every person, whether it's through -- whether it's through their own personal behavior or whatever needs to have something in that -- we call it skin in the game. when it was totally free it was overutilized. someone would come to me for a bad cold whereas someone else with private insurance would go buy and their own medicine. it was a plodgic decision me would make. for me and my patients, i worry about access to care, being able to give them the care that they need. and you see that if you look at some of the other single payer systems in the world. >> let me add. there's something even more die

bolic. some may have seen just in the last week in "the wall street journal" an editorial, compared to the effectiveness board in the united kingdom, it was created in the early 1990's, again, to help control costs. it was to let better care, better forms of care, treatments, protocols, rise above and others fall. but what it's turned out to be is a committeor czar, if you will, that -- a committee or czar, if you will, and we're seeing tremendous disparities develop between survival rates for breast cancer and prosthetic cancer between the u.s. and u.k. specifically because, for instance, as i understand it, madam grams are not routinely done in the u.k. some of the key therapy -- chemo therapy agents are not covered. and legislation was put into

effect, so the framework is there. even before we passed a legislation that's going to create rate limiting steps such that there will be waiting lines, there will be certain treatments not available, certain age groups and certain conditions will not be considered, quote, cost-effective, end quote. and there you have classic socialized medicine. >> you bring up a good point. the new england health care institute published in february a rather large study that said about 700 billion or so in health care dollars are wasted. paul o'neill wrote an editorial in "the new york times" in the last couple of days that said it's closer to $1 trillion. if we look at decisionmaking, we forget there are already are some things out there. for example, what do pediatricians do? well, there are standards of protocols. college of surgeon has standard

s of protocols. now, what was found in this study, a lot of times people didn't follow those standards of protocols. i think i'd be ok in terms of a psychology, in terms of what is considered clinical excellent standards established by research and by professionals. and in the field i'm ok with following it. i'm not ok where the federal government saying, yeah, but if you reach a certain age we are not going to do it and that's -- >> that's right. >> i am going to direct this to dr. burgess and one of our co-panelists started talking about the democratic bills that are floating through the halls of congress. and i wanted to give dr. burgess and some of the other members to talk about some other issues that are out there in terms of the democratic

health reform proposals that are being debated in congress and which you believe would be a problem for doctors and patients. >> well, let me even start out saying there is common ground. certainly common ground in information technology, some of the common ground might exist in work force development creating physicians and nurses that are going to be taking care of us when we get older, should that day arrive. these are things where there can be brought agreement. it is unfortunate it has been so difficult to get admission to the inner sanctum where these bills are being written by democratic persons. i have great hope, dr. murphy and i went down to the white house last march in a breakout

session. maybe they didn't invite me as another pretty face for the photo on, maybe they want some -- op, maybe they want some expertise. it's been a steady frustration for this bill to be crafted, certainly on the house side. i can't address so much what's happened over on the senate side because i am not familiar with their process. now, be that as it may, we are going to get a bill thursday that will be a bill from the democratic staff of the house ways and means committee, the committee on ners, which is my committee -- energy and commerce, which is my committee, the draft we will get thursday will not be the final answer. there will be another bill that is introduced on thursday -- i'm sorry, on tuesday morning when we begin to mark it up in committee. we are told we will have three days in which to mark this up in the -- in our committee and after that it will be all debate will be closed off and it will go off to the rules

committee and the floor of the house. three days to talk about the type of change we're talking about. think of the doctors that were there the day medicare was crafted and signed into law back in 1965. and the enormous effect it has had 40 years out, we have to think 40 years out on this legislation because clearly that's the -- we're not going to fix much what has happened the last 30 years but the next 30 years should be pretty darn important to us and i don't get the sense if is. we are not dealing much with liability. those that watched the president's town hall saw an inciteful question on you tube to the president about liability reform that's occurred in texas. there are some things around the country that are going right and the president said as much in march, he wants to learn what works. there is a lot of expertise here on this panel.

there's a lot of expertise, a lot of people have been working on this issue for years here in washington. let's not confine ourselves to three days of debate on the energy and commerce committee, and we all know we are going to have a bill that's entirely different on the senate side. some things will be hammered out in the conference committee in the middle of the night. we are going to have 45 minutes to read it and that's what we'll vote on next fall. october approximate 15 will be my prediction. that's not the way to do this. >> desiree. >> yes. i want to shift a little bit in things you just mentioned which was medical liability. we all understand very well how the lack of medical liability reform has really driving -- driven up the costs. and we have some of that money goes to the lawyers, maybe 40% of that money went to settle -- with the settlement. president obama has recognized the need for medical liability prmple. yet today we have not seen a

major attempt to fix this problem in the congressional democratic proposals. how important is medical liability reform to health care reform and how do we fix this problem? maybe dr. price can help us with that. >> thank you so much. i mentioned the cost of defensive medicine, which i think is hundreds of billions of dollars, and that's the main reason that we need to address liability reform. and the president has said some good things about liability reform. we don't see the specifics in the bill right now, but i believe as dr. burgess said, this is another area where there is potential common ground. the area of health courts, having individuals that actually know about the practice of medicine, what it means to take care of patients, to be the ones sitting there in judge of a practitioner and determining whether or not there is merit for a case that's brought before them and determining what the award ought to be should there have been false -- fault to have

been found. i think that's a wonderful opportunity for us to move in a positive direction. i will raise one area of significant concern with the issue of liability reform. and the president alluded to it the other night when he said that he thought if there were guidelines that were put in place and physicians, practitioners followed guidelines that they might be able to use those as an affirmative defense if the case were to be brought. and this ties a couple of issues together. the issue of quality. who ought to be defining what quality is? and as dr. murphy said, it ought to be the specialist societies that ought to be defining what the guidelines are. my concern is that we get the comparative effectiveness research council or another health board that doesn't have practicing physicians on it or individuals who cared for patients that will be defining the guidelines. and then you get the worse of

both worlds because you get the guidelines in place by non medical officials and then people that say they follow these guidelines they'll have an affirmative defense in coort of law so they're coerced into practicing the wrong kind of medicine for their patient. so although there is common ground in the area of liability reform, there's also some real challenges and some real enemies out there behind the bushes if we think simplistically about what liability reform and quality ought to be. >> dr. price, dr. bringry and dr. burgess wants to jump in. since having come to congress we have 14 doctors and over 200 lawyers in the congress. we now have them outnumbered. i do want to tell you that. it took us a while. in tennessee we have the state volunteerary mutual insurance company owned by the physicians and over half the dollars since inception of that company have not gone to injured parties but

have gone to attorneys, both defense and plaintiff attorneys. that's a bad system where injured people can't get properly compensated. and there's a way to do it. texas has done a very good job you can't sustain the rates of malpractice. i think it was $4,000 my first year in practice in 1977. the young physicians who replaced me it was $70,000 -plus. who pays that? well, patients do. just yesterday i had a health care forum much like this in tennessee and a physician came up, a family practice doctor who had been sued and he had a -- got a report card from the insurance. and his orderly, his testing had gone up 300% because of that lawsuit that he won. when you extrapolate that across the country, there's no telling what the cost, true cost of liability premiums . you go into an emergency room now, you're going to come out glowing in the dark.

the reason is because there's no reason for the doctor not to. and to protect them and later someone comes back, you didn't order a c.t. or whatever it might be, that drives up the costs. our patients in the system has to pay for that. >> i want to add to what dr. roe and dr. price said with regard to medical liability. and following protocol and standard, that is applicable also to the health care facility just as well as it is to the provider because george washington hospital, well star killastone hospital back in marietta, if they're doing things the right way and something happens to a patient through no fault of anybodies, either the treating doctor or the facility, and they're following depending on the designated related group, the

diagnosis that's being treated, if they're following a protocol, that same relief from that kind of tort malfesance should be available to them as well. >> ok. we are going to wrap it up with two quick questions and then go to the audience. stu, why don't you hit number 10 and then, joe, if you could hit number 12 and then we'll go to the audience. >> this is for dr. murphy. as we discussed earlier, health care costs make health insurance unaffordable for some americans. additionally, government-run programs like medicare and medicaid are already running out of money. what can congress do to make health care more affordable for everybody, whether this be changes in the medicare-medicaid program, whether this be alterations in our tax code? we haven't talked too much about that, but that's obviously a very, very hot issue. who is going to bear the

burden? is it going to be worn disproportionately by one or the other or by our society? >> well, i think there are several things that's not been tried and found wanting but difficult enough to have tried. what congress is good at is spending your money. and the worse thing we all have in our possession is our voting card. it's the worst credit card in the world because we can use it to spend trillions of dollars that our grandchildren have to pay. and along those lines what congress will do is say, ok, health care is expensive. let's raise taxes. so there's 28 different taxes that have been proposed to be raised, including such things is your employer guesstimates taxed if they don't or do offer health insurance. on top of the sugar, soft drinks, cigarettes, alcohol, death, everything else. but it doesn't really address the issue of how do we make sure that we're focusing on quality. this could be a similar point in the delivery of health care

in america. wide range we say we have to focus on the decisions of saving lives and saving money. an article that appeared in "the new yorker" talked about two towns in texas and the mayo clinic. let's run as many tests as possible and gets reimbursed with that you end up with a system like that. if you incentivize those doctors and nurses to work toward the health improvement of the patient, you end up with a system that actually costs less, as odd as that may seem. there's a portion to it that we haven't done yet. we need to have health care plans that you can buy across state lines that you can keep the rest of your life, that you -- there's incentives no matter what your age is to be part of that. i like the idea if we think people ought to have health care plans that it should be a tax write-off to purchase it. not a tax punishment to have

it. and i will support quite frequently there ought to be transparent in the system. transparency in terms of what the hospitals may charge. transparency in terms of quality. in pennsylvania where it's required by law that hospitals have to post their infection rates, it's amazing how the infections have plummeted. one hospital in pittsburgh that had people dying in lots of cases, once it became public what their infection rates were, they had months and actually a case of a couple of years where no centralized infections, no mrsa, no other things, because they aggressively went after this. and when the public is awarend i see signs, wash your hands. i have see those dispensed everywhere. my point is health care needs to focus on that. and they cannot have a separation where the insurance says, -- you notice i talk fast to my colleagues. i am the only guy north of the mason dixon line so i do it

that way. >> do you want to ask the final question? >> it's for dr. price. i know you've been a very staunch champion of the concept any health reform that comes about that the patient must be put back in control of their own health care. will you ewill be rate on that? >> we all talk about a patient-centered system and i think that's what we need to focus on. peter actually talked about it and dr. giordano we need to put the patient first. the only way i know is to put the patient in control. otherwise the patient ends up secondary to somebody. whether it's the physician, whether it's the insurance company, whether it's the federal government, whether it's some other -- somebody else in the chain. the only way for the patient in his and her family to truly have control is to be able to have health insurance. they have to have health coverage. and to own and control that health policy. so that regardless of who's

paying the cost for the health insurance, the patient and his or her family needs to own and control that policy. if you think about it, if you think that if you buy that the status quo is unacceptable and you believe that patients can in fact control their own destiny of giving the appropriate rules and setup in the system, imagine that the insurance company would have to be responsive to patient's needs. wouldn't that be a wonderful thing? the only way that the insurance company cares about what the patient wants is that if the patient has power in the equation. the only way the patient can have power in the equation is if he or she owns and controls the health insurance policy. it's a relatively simple change. it's a fundamental change. it would frankly move the system in the direction that it ought to move and that's not the direction that the insurance wants it to move or poll significances or bureaucrats or even docs to a system that patients want it to move. >> let me add to that. because we have an example of this.

if you look at an h.s.a. and there's a kaiser foundation report. some say a 44-year-old with a similar level of benefits and the folks in the h.s.a., that you are costs are 30% less than a fee for policy. this is hard data. something we in -- congress i have not run across very much. there's a 30% decrease. maybe you can see it's a selection bias. only healthy people are going not h.s.a. group. i talked to a man about this. just the other way, i'm a gastroneurologist. my doctor prescribed to me the purple pill. this is $1359 for that script. now i have an h.s.a. is there something cheaper? of course, i thought about that. he twrote a prescription for generic prilosec. he's getting the same result. apologize to the other guys. but that said he saved $139.

and that's because, as i think it was fleming or roe, he had skin in the game, it was just the h.s.a. now the thing about this democratic proposal that peter asked what about it. it's not radical at all. it just substitutes a private insurance policy to a bureaucratic insurance policy. it's not radical. what price just talked about is radical. actually put ining the patient in the middle. -- putting the patient in the middle. from my practice, if you have an organic patient-doctor relationship that bubbles up in controlling costs it never happens. the patient can drive it, the doc can drive it, the bureaucratic can drive to assign payments but he or she can be able to do so. >> ok. great. i'd certainly agree with that. it seems like everyone in the office wants to have an m.r.i. if they can pay 30%. then they say, doctor, do i need that m.r.i.? can't i have more therapy?

we'll open it up to the audience and internet. and the first question is, identify themselves. i am going to get a little cozy with you guys. >> sure. i'm an associate professor here at george washington. i'm a general internist. so a little bit of a different perspective. i agree very much with the president dealing with the need of this crisis because we don't have 30 years to discuss what's going to happen with medicare in our system. we're in a crisis right now. and i can tell you for the people of washington, d.c., where we have some of the highest rates of aids and the worst outcomes that rival many third world countries, it's embarrassing. it's embarrassing to be so close to the white house and have niece kinds of statistics. furthermore, what is bothering me in this discussion, there's a lot of discussion about patients who take care of themselves and who go to the gym and younger and blaming the

patients for their weight, when i know perfectly well that there's a disproportionate number of obesed patients who are poor, who are black, who are hispanic. we know these numbers to be true. and when people don't have basic requirements such as money because poverty drives obesity, lack of education, we know that we among us as physicians we're much less likely to smoke. we're much more likely to take that baby aspirin because that's what the harvard health study recommended. we're more likely to exercise. we're more likely to get our madam grams and our p.s.a.'s checked. and we know there's certainly better outcomes the higher we are educated. so to sort of just focus on an individual and put the blame on an individual for, quote, not taking care of themselves and being addicted to smoking when we know darn well that in black and hispanic communities there are 40% more 'tising for

alcohol and -- advertising for alcohol and tobacco than white counterparts. if you go right down to anacostia and go into a 7-11 and buy a beer i can tell you that the beer size is different than the beer that's sold right here in northwest because that's marketing. and so, yes, the government absolutely has a responsibility to be involved in health care. not in a narrowly defined business of health care but in the global health care. and i'm going to stop before i turn it over to talk about the district of columbia schools. because the -- please allow me to finish because i think we've heard from a quite partisan group of people about their viewpoints. and i want to make sure that the district of columbia residents are represented. my sister's children all went to public high schools and public schools here in the district of columbia. wilson high school, which is here -- happens to be in northwest where there's lots of black and hispanic kids, they had to make a deal with the

devil. they have to have corporate sponsors for nike and mcdonald's pay for their tapes that get shown on tv because the schools don't have money. so guess what, the kids end up eating more of those products. so guess who gets to become obesed. so we're going to turn around and blame these people for the health conditions, i'm a very, very concerned as a generalist that we are faking a kind of viewpoint in this discussion this afternoon that is simply focusing on a narrowly defined interest of insurance companies, pharmaceutical companies and physicians. [applause] >> let me just phrase the question for us to make it simpler because i was at the a.m.a. meeting where president obama spoke. and president obama, a big part of his speech, was on personal responsibility. he spoke at great length about obesity. he spoke at a great length about some of the issues and concerns you're raising where

it sounded like he was blaming the patient. what do poor people do who are in this situation, are there programs, schip, medicaid and other options for them? >> yes, could i respond? i like what dr. price says about this and that's the empowerment of the patient. this is not i don't think anybody up here used the word blame, but if you empower people to make the right decisions, i find they do that. now, i'll give you an example apart from being a family physician. i'm a generalist as well, but primary care just like the questioner there. one of the interesting things when we were debating in our own company where to go to health savings accounts, there was a lot of consternation. well, you know, this is going to be money out of our pocket. we said, well, we're going to put the money in your account first before you spend it. and i had one of our managers who said, well, you know, i'm using three, four inhalers a

month. and i don't know that i can afford that out of my health savings account. well, let me suggest you stop smoking and you won't have to use inhalers. well, she took me up on that. as a result of that, her respiratory problems did improve substantially. and she ended up building quite an impressive account in her medical savings account, her health savings account which she went on to use for preventive services. if we empower our patients to make the right deaf significances and we can do that through incentives and disincentives. i can see we use incentives for people who come in and get their p.s.a. or mamograms and otherwise, we can't take responsibility for them and often they don't take responsibility for themselves. but i think that if it's a system that is pointed towards empowering a patient or the

consumers, if you will, i think we'll see really good results. >> you know, in the last 20 years i have worked with the louisiana public hospital system. d.c. general ain't got nothing on where i've been working. and in fact, it's coming out of that system that makes me almost reactionary against the false compassion, which no offense, i think folks that say, oh, my gosh, we're going to build a hospital for the poor folk and inevitably becomes a lower tier. now actually what we're talking about is putting everybody on the same tier. now you may be able to point to me a government fram which has, wow, leveled the tiers since it's not separated out. but when i think of the d.c. -- again, i come here and i see that the d.c. voucher system, which allows families to go to a school of their choice is x'd. everything becomes special interests. they didn't like the -- the teacher unions didn't like it even though it benefited the children. now my experience with public hospital systems is that it typically it ends up being a