call the get into the police records over here in this barrack. and so there's a change taking place that is worthwhile for professionals to take a c@@@@@@r . . >> what are the criteria for action? what are the consequences? i would start with mike is it

not in house? then when you answer that, why is it going out? who is it going to? you're pointing out where the red line is. i think there have to be decisions made, but the one that should not be made is here is something and we will do it this way and not think through the consequences. i would always try to get it done in house. there are many reasons i am prepared to go into but i don't want to monopolize everything. >> [inaudible] [laughter] >> one of the problems when i am thinking of contractors is we want to build skills inside. they called it a trade, it is a tradecraft. i learned at the knee of a series of people i was proud to work for. my first recruitment was a set up. the chief knew that the guy was

going to send me out there and he said yes, i will do it. just ask me. my point was it was a trade. you need to make sure you are not outsourcing capabilities you need to develop, management, training. you have to weigh how much you are putting out and how much is inside. if you are going to take legal action which must be approved by congress within 72 hours, but if you have a legal finding, it has to be within a finite amount of time. you have to ask yourself the question, am i going to take this legal action? if you say i cannot do it, i will not ask my child to do it and it will not pass a giggle

test, you do not want to be involved in it. >> i am the author of this book which is the only nonfiction book about intelligence outsourcing. i have two questions. you are now working for a company that does contract with the intelligence community. i think it is natural you would talk positively about contractor is but i think -- i wonder about your credibility since you are a contractor now, making money from this business. should we take your word on contractors with a grain of salt? second, when you appear on television talking about intelligence issues, will you identify yourself as a contractor rather than former

director of the cia? that is part one. part two is the inspector general report came out one month ago about the nsa surveillance program, but what i found interesting was that they interviewed 200 people involved in the program, including yourself and current officials, as well as private sector people. however, none of the private sector people were identified. shouldn't we as american citizens know who these high level people are working for our intelligence since companies like booz allen and as a i see are doing such high-level work for the intelligence agencies? should we know who these companies are? thank you. >> with regard to your first question, i am not very creative. everything i said this morning about contractors i said in 2006

as director of the agency. it was about us and not contractors. my affiliation with michael chertoff was made quite public, and i do identify myself as a member of the chertoff group in any public discourse. with regard to the ig report, i will take no ownership over that. i was one of the 200 people who were interviewed. there were some people who were not interviewed, and there was another group who was interviewed but not further identified. that might reflect something the secretary said earlier, that you have people who are taking a serious risk by doing the

patriotic thing. i was surprised as director of cia how much american business will put themselves at risk for no profit motive in order to assist american intelligence agencies. what you may be seen there is a version of trying to protect them from the kind of legal actions or public criticism that seems to be more prominent in recent times. cia does not live isolated inside the broader american political culture. one of our in advantages is to rely on us as a society to help us achieve our mission. there is nothing nefarious about that. it is something that if this story were better known, most americans would be proud of. there are elements out there who

seem to want to go after anyone who becomes affiliated with us. it may have been that cautioned that caused what you described. >> [inaudible] >> there is transparency but it is good, but not an absolute good. everybody has secrets. i could ask you about your resources and people would say why are using unnamed sources? i do believe there is a reason for that. from no one is insisting on absolute transparency from anyone. we can argue as to whether that is appropriate, but i think there is a balance all the time. >> can you talk about the difference between the clearance process for contractors verses employees for these tasks. do you think as the community relies more on this contractor is that there could be a counter intelligence as they get more

into collection issues? >> there is no difference in terms of the clearance, but by using contractors you do have a certain opportunities. you can use a contractor with a lower security clearance -- when you could -- when you get something from the agency, you are assuming you have a government employee and he will have access to most of the doors in the agency. frequently a contractor, you know you will only use this individual for this specific task. he will never go anywhere else in the agency for get access to anything else. very often one of the things that allows you to more quickly serve with a contractor is your only clearing them to a secret level because you know he will only use him for that task.

in that sense -- because you know you will only use him for that task. my most intimate knowledge as director of nsa -- the only difference between a government employee and contractor was a contractor always took longer because i put the higher priority on clearing government employees first. >> [inaudible] >> if you want to talk about counterintelligence risk, the number of contractors is probably one of them, but if you want to hit the sweet spot for counterintelligence risk, the fact that we want to bring more people into the intelligence community, i will use the phrae heritage communities because there -- they have wonderful skills. there is a strong trend that once you are in, remember

sharing information? once you are in, any individual has greater opportunity to access information. if i in the head of the foreign intelligence service and -- if i am the head of the foreign intelligence service. once you are inside they have access to more information than ever before. my eyes would be dilating. i am a supporter of both those trends and i just identified, but if you are going to go down that path you also have to reinvest in counterintelligence because you have opened up additional vulnerabilities. i think we should have more first generation americans and we should share information more because that leads to better product. compared to those things, the contractor thing is a small subset. >> i want to bring you back to

the "new york times" article. director panetta decided this warranted going to congress to do a briefing. you made a different judgment. when you think the use of contractors and warrants a congressional briefing and why the use of contractors in an assassination program did not? >> i will use my language precisely. we still hyperventilate when people use the word assassination. it would be a violation of the executive order. no one is talking about assassinations. >> if you don't use that word, if you are using contractors in a program in which surveillance and training -- >> how about that? >> when you go to congress and went don't you? -- when don't you?

>> this is hard for me to answer because it is a covert action and because if you look internally at the stories in the paper, the timeline for this is 2004 and ended before mr. panetta became director. i have learned more about what this is in the last six weeks than i did as director. that should tell you a lot. if you want to be very dark about it, maybe i was not a consciences' director. it was that this is not a prominent thing. -- maybe i was not a conscientious director. i don't know enough about the details to suggest whether it crossed any threshold. if you read that story carefully, mark does not know enough either. he is not quite sure what the

mix was. somewhere in that mix i probably would have talked to congress, but the threshold i probably would have first crossed was a political one and not a legal one. not that it was a significant intelligence activity, but the fact was this was a bit of a different flavor and the kinds of things in the past. i would have gone down there wanting the committees to know about it rather than some abstract legal threshold. when i was direct and and the press coverage talked about one continuous program. -- when i was director. you had carried several efforts to deal with an issue everyone understood was a problem.

when i was there, if congress was uneasy that i did nine talk to them enough about what was happening, i would tell them -- i did not tell the president about it and the vice president. what was happening on my watch never reached either the political or legal threshold. i in being evasive only because i don't know the facts. i don't know the details of what's they wrote about. -- i am being evasive. there was probably a threshold in their, but what i am suggesting is it was probably the political threshold rather than the legal threshold.

>> i am with npr. i wanted to talk about the difference between the idea of bringing in contractors for specific skill sets vs what appears to have happened after 9/11, which was bringing them in for a long-term operations in place of government employees. if i understand correctly, i think that is what you tried to work at rationalizing can you characterize how successful you were? the second part is probably too secretary chertoff. is the cia ahead of other agencies? do they still have a lot of catch up to do? what is the variation? >> i will try to be very quick about this. when we did this i said -- we

had some signs attached to this. we did a look -- we looked at core support and you can imagine what each of those might include. when it came to core, the percentage of those jobs being done by government employees was in the upper and 90's. core support actually -- i do not remember the number, but they had a high number of contractors in core support. it is hard for me to go into the specifics about it, but co if but core functions -- if core functionscore functions -- if you take core functions, then

you get support which is like running a small town. a surprisingly high number of contractors and a high number of government in please -- a high number of government and police. -- a high number of government employees. you always want that function at the top to give you flexibility to try to migrate people -- migrate our reliance out of corps support and into raw support functions. -- migrate our reliance out of core support. it may seem like self congratulations but the model we used was applied more broadly

across the intelligence community. for those of you who are concerned about contractors, our numbers are better than the communities at large. >> i think dhs as an agency, i think there were a higher number of contractors and you would normally find. over a time they declined. one of the challenges is you can hire contractors relatively quickly. the process of hiring and clearing employees is very slow, so that creates a bottle necks throughout the u.s. government and reflects an imperfection in the hiring of this them as opposed to one in the contracting system. >> two questions.

first is going of something mr. devine brought up. do you think a down economy could affect these companies? and an op-ed up about the interrogation report. you talk about consequences of that coming out. can you believe -- can you go into what you believe those consequences are? >> he brought the idea of private companies and the economy and do you think a down economy could affect the quality of their work or the need for them? >> i had not thought about it in that sense, i would have to think about why that would not happen. there is a positive effect to the down economy. we were getting 160,000 applications per year. that is even higher now. if congress gives us additional strength, one of the problems we have is we frequently had

mission and money but did not have strength. if that is the circumstance, you go by contractors. if they allow the agency to hire greater numbers, particularly with the economic situation the way it is, a lot of these issues with regard to contractors begins to go away. i think that maybe a more powerful impact. with regard to the letter in the paper today, the basic thrust was looking forward and not backward. the article -- the united states government's interrogation and detention program. that is what that was. i almost said america's but i thought that might be a flag word. continuing looking back and pulling the -- it will teach

people never to play to the edge. i know and incapable of doing it but i don't think so. -- i know i am capable of doing it. we need this work force to be vigorous and active. no matter how narrowly defined this look back might be, it will start pulling threads and you will have a significant number of agency folks being pulled through this process to no good. the article is about the release next monday of the 2004 report. i make the point that one agency contractor was prosecuted and convicted for his treatment of a detainee death. nobody on the north bank of the

potomac reviewed the report and concluded that no further prosecutions were indicated. after that was done, we took disciplinary action. one final point is that that report has been on the hill since 2004. since 2004 to the senior members of the committee since 2006. why would this report prompt us to have a special prosecutor or any other kind of activity? i think it is unfair to the people who did what they did out of duty and they did what the nation ask them to do. >> i am national press club member. did you cover the impact of the reduction of staff members used on the community -- in the administrations of president

carter and to a lesser extent president clinton and i would assume there is some relationship with increased contracting as a result? >> there was an explosion after an 9/11 because the work force had been reduced. i became director in 2006. it was prudent to go back and check our homework and figure out where were the inefficiencies. that is what we did in 2007. >> this has happened over and over again in our history. under the contractions, the

other thing is the hiring freeze -- however it may be cast. you have the bubbles that are created in terms of leadership and it creates a spin-off effect 15 or 20 years later. so with carter -- i say carter, but it was really a broad based decision to cut back the budget -- it has an impact 20 years later, in terms of missing generations of officers. >> this is more of flavor thing than a syllogism, right? if i told you more than half the agency's work force >> it might suggest why we have a pretty open mind about hiring retirees as contractors to come back and level that work force. >> a follow up on the op-ed today.

do you think that the ig report will show that the program was effective in getting good information from detainee's in the sense that it actually work? >> it is my memory that there are a half dozen paragraphs in there that talk about the success of the program. they go beyond -- one section of the report was quoted in the m emos talking about no imminent attacks being stopped. that has become the end of term agreed for the entire program, because nothing else was available. -- the end of the term grade for the entire program. there will be many paragraphs that talk about the significance of the program in terms of our learning about the basic infrastructure of al qaeda and enabling the counterattack

against the leadership of al qaeda. in that sense, if you asked me to vote i would say i don't want the report released. not unlike the release of the first memo, it brings more balance to the discussion -- i have talked about when the 13 techniques were first put out there, i strongly opposed that but i cannot tell you the number of folks who said there must have been more and i said there are not. i believe the release on monday will also include a 2000 them now -- a 2007 memo on which i rely as director. he will see a much more narrow field of techniques available, which may bring some balance into the public discourse. >> item with abc. going back to your earlier

comments -- i am with abc. you said you were troubled by the activities of the last six weeks -- >> no, i learned more about the details about what happened then i did during my time. >> can i ask you also, do you believe the political discourse over the last few months since this program is revealed as taken a new level and warrants going to where it has gone? >> when i first was told that director panetta have gone up there and briefed, my first response was, what are you talking about? what program is this? when i check it out and found out more details as to what had

been briefed, my response was why are you briefing this program? keep in mind i am focused on the program i knew. everyone talks about this other program. i would characterize it as recurring efforts under several directors to deal with a problem that was well-known. there were separate efforts, so i was puzzled by why there was urgency. i think that the agency has done a report. i said that me tell you what i know. i think the other directors went in and talked. i think the report up there is balanced. i think it will return a certain calm to the discussion that seems to have been absent today.

>> can i follow up? have you had any discussions with director panetta regarding this program? >> i will not answer that. >> exercising the prerogative of the chair, i have my own question. what operation at dhs is most dependent on contractors? to what extent do use contractors in worksite enforcement, company audits? >> i have been out long enough and that i can plead memory lapse. i would say if i had to guess, it is in the detention process. most of the people who are detained as immigration violators route 1 death in detention facilities operated by private contractors. -- immigration violators held in detention facilities operated by

private contractors. the location and flow of people who are going to be detained will vary on a host of circumstances. and then the flow stops there and we see greater flow in the southeast. he will have an empty set of bids in western arizona and a lot of people you have to house. i would venture to say that is the area in which in terms of dollars there are a lot of contracting dollars. in general, you will find contractors in various places in the agency. i believe that has declined as the agency has matured and there was an emphasis we put on trying to get more people to do

acquisition. here is where congress sometimes trips over itself. they complain about the fact that in terms of people who perform the acquisition function, that we are using too many contractors. we want to increase the budget so we can hire more people in house can manage acquisition. congress says we will cut the budget for management. you want me to do more management with people in house but then you cut my budget for hiring those people. that is why we go for contractors. the administration had asked for an increase in its management, and it got significantly cut by congress. if you do want to insource more things, you have to be willing

to pay for it. once you hire an employee, cunh-- you have to cost that inr having that person. it is that budget issue which tends to be not glamorous but very real factor in terms of determining what is contractor vs in-house? >> i am from congressional quarterly. the senate intelligence committee report on their authorization bill that they take dhs -- everyone is trying to reduce the use of contractors but dhs has a higher percentage and is not doing a good job of cutting back.

could you explain why is? -- could you explain why that is? position? >> i cannot validate that, but i cannot disputed either. one thing is the agency stood up very quickly. organically, as some parts of the agency began, you had some parts that moved. you had a relatively mature function. intelligence analysis was built from scratch. this is very cumbersome, the process of hiring people. as general hayden said, the competition for people with skills when the intelligence community in general was dramatically increasing, all of these things are hard to hire organically. the second thing is a lot of these functions are performed

by intelligence functions and are analytic as opposed to operational. although there are operational elements, it will not necessarily be intelligence and analysis. analysis is a problem in the area were contractor makes a fair amount of sense. there, you are drawing on the skills that are pretty well developed in the civilian sector. some of the sensitivities that occur when you use the contractor operation, they are not really present when you perform analytical work. there are language issues. in that sense, it makes sense to have all larger role for contractors than you would if you had a higher element focused on operational activity.

i would spend time, as the agency matures, the balance will move organically to in- house capability. if you do not want to fund people, you cannot complain when we use contractors. i think general hayden said it earlier. you give us a mission, but you do not find slots, then that mission will be performed by contractors. this is an area where congress could take a big step forward in achieving a balance on this if they were prepared to fund it that function. >> speaking of double dipping, general hayden, you just said that when you heard mr. panetta briefed the hill, the reaction was "why this program?" which makes it sound like there were other programs.

[laughter] >> i get word that there is a covert operation under way to brief the -- my first reaction was what could he possibly be talking about? we were very aggressive in briefing the hill during my time there. i will take that much credit for. also, 2008 was a leap year. we will have the olympics and the presidential election. even if you put aside noble motives on my part -- i actually think there were and are at the agency consistently -- to hide the ball from congress on anything during this timeframe would have been suicidal. our threshold for going out there to brief was incredibly low. really. we went out there with things

that we did not have to pass on. "go tell the hill." >> i briefed some pretty exciting stuff at congress. i was asked if there was anything else. i said you know everything i know. >> when you said why this program -- >> my first reaction was what could this possibly be. when i found out what it was, i first question was why is that in meeting this description? -- why was that needing this description? on what happened during my tenure. >> all right. i have to wrap this up.

i want to apologize to my panelists for bringing them into the line of fire. that was not my initial intention. you are used to this, i guess. thank you for taking the time and breathing mess, and jack and general hayden and secretary chertoff. thank you to the national press club for putting this together. i'm going to turn it over to our host. >> i would like to thank our panel on behalf of the press club. thank you for taking time to be with us today. as i said, most people are out of town, except for those with us in this room. thank you for attending. as a reminder, this is a joint news makers, book and author committee of them. this will commence afterwards. joe will be available to sign his book just outside the doors.

[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2009] >> the health-care debate continues to be the focus of this week's on-line addresses. president obama talks about the distortions concerning the pending legislation. following him, the georgia congressman with a republican address. he says the proposals will undermine americans' right to choose their own health care plan. >> every day in this country americans are grappling with health care premiums that are growing three times the rate of wages. insurance company policies that limit coverage. dozens are losing their insurance coverage every day. -- thousands are losing their

insurance coverage every day. we have had a vigorous debate about health insurance reform. this is an issue of vital concern to every american. i am glad so many are engaged, but it should also be an honest debate, one not one dominated by distortions -- not one dominated by distortions. i want to spend a few minutes the bunking some of the outrageous metts circulating on the internet, -- outrageous myths circulating. let's start with the false claim that illegal immigrants will get health insurance. that is not true. illegal immigrants will not be covered. that idea has never been on the table. some also say coverage for abortions would be mandated. that is also false. when it comes to the ban on using tax dollars for

abortions, nothing will change under reform. as every credible person who has looked into it has said, there are no so-called death panels. these are phony claims meant to divide us. we have heard the change -- charge that reform will bring about a government takeover of health care. that sounds scary to many, but here is the thing, it is not true. and i don't want government to get between you and your doctor work let insurance companies make decisions of that what medical care is best for you, as they do today. if you like your doctor, you can keep your doctor. if you like your private health insurance plan, you can keep your plan. the source of some of these fears about government health care is confusion over the public option.

this is one idea to provide more competition, especially in the many places around the country where one in surer dominates the market place. -- where one insurer dominates the market place. it would just be an option. those who prefer the private insurers would be under no obligation to shift to a public plan. the insurance companies don't like this idea or any that would promote gaidar -- that would promote greater competition. this aspect of the health-care debate should not overshadow other steps we must take to reduce the burden americans face. let me stress them again. if you don't have insurance, and you will finally have access to quality coverage you can afford. if you do have coverage, you will benefit from more security

and stability. if you lose your job you will not have to worry about losing health care coverage. we will set up tough consumer protections that will stop insurance companies from exporting you. we will prohibit insurance companies from denying coverage because of medical history. it will not be able to drop your coverage if you get sick or water down your coverage when you need it most. they will not be able to place arbitrary cap on the amount of coverage you can receive in a given year or lifetime. we will require insurance companies to cover routine checkups. there is no reason we should not be catching diseases like breast cancer and colon cancer on the front end.

that saves lives and it will also save money over the long run. the reforms we are seeking will help bring down skyrocketing costs which will mean a real savings for families in the government. we know what a failure to act would bring, more of the same. more of the saying exploding costs and diminished coverage. if we fail to act, the crisis will grow. more families will go without coverage and businesses will be forced to drop their plans. we can fail to deal with flaws in the system just as washington has done for decades or we can take steps that will provide every american and business and measure of security and stability they lack today. it has never been easy moving this nation forward. there are those who use fear to block a change, but what has always distinguished america is

when all the arguments have been heard, we rise above our differences in the march forward as one nation in the one people. all of us americans. this is our chance to march forward. i cannot promise you the reform will be perfect or make a difference overnight, but i can promise you that if we pass health insurance reform, we will look back and say this was the moment we summoned what was best in each of us to make life better for all of us. this was the moment when we build a health-care system worthy of the people we love. this was the moment we earned our place alongside the greatest generations. that is what our generation is called to do right now. >> i have the privilege of

representing georgia. i used to be a physician for more than 20 years. right now americans from coast to coast are debating the task of reforming our health system. folks understand the imperative of reform, but they want reform that keeps what is good with our system and fixes what is not working without destroying our quality of care. third-party decisionmaking is driving patients away from their doctors. the challenge is providing americans more affordable care without impairing the quality and the choices that defined american medicine. this is impossible with the one- size-fits-all approach taken by the president and democrats in charge.

no two patients are exactly alike. while the same diagnosis can be reached for two people, the proper treatment may be different based on many factors on the patient and a compassionate physician can understand. i can tell you that washington is incapable of processing the personal and unique circumstances that patients face every day. that is why a positive solution will put power in the hands of patients, not insurance companies. but the plan being promoted by the white house would give washington the power to make personal medical decisions on behalf of patients. whether it is the government using -- the government choosing or a bureaucratic board cut the president's plan is a 1000 page expression -- or a bureaucratic

board, the president's plan is a 1000 page expression. the president has said he would like to stamp out some of the misinformation floating around. the problem is the president himself plays fast and loose with the facts. i would like to take a moment to clear up a couple of the president's worst offenses. the president tells americans that if you like your planned you can keep it, but if you read the bill that is just not so. within five years, every health care plan will have to meet a new federal definition for coverage, one that your current plant might not match even if you like it. experts agree that under the house bill, millions of americans will be forced off of their personal coverage and sure land. the present -- off of their

personal courage and shuffled off. it will destroy and not compete with the private sector. whether or not you get to keep your plan or your doctor is very much in question under the proposal. perhaps the most striking misinformation is that there are only two options for america, that is his way or the highway. -- that it is his way or the highway. there is a better way to reform health care. rather than allowing the government to call the schulz, republicans want to put patients in charge of their families' health care. we have plans to increase coverage without putting a bureaucrat between you and your doctor. we believe what is good for patients is good for american health care. if anything has been learned

from the debate, it is at the american people think we can do better -- it is that the american people think we can do better. it is time we start over to create a bipartisan solution that lets patients in charge, honoring the transparency promised by the american people and principles of quality care we all hold dear, we can support a proposal we all support. we will work on behalf of the american people to make this a reality. thanks so much for listening. >> marijuana trafficker of the 1970's. he is interviewed by the founder of the national organization for the reform of marijuana laws. that is tonight at 10:00 p.m.

eastern on c-span. how is c-span funded? tax payers. >> grants and stuff like that. >> donations. >> i don't know where the money comes from. >> contributions from donors. >> america's cable companies created c-span as a public service, no government mandate, no government money. >> a discussion on health care legislation, following remarks by two surgeon general's, we will hear about the government's role in health care in the government costs. this event is 3.5 hours. >> i want to welcome you to our session today on fact versus fiction. we want to start this morning by

thanking the organizations that have made this possible starting with the robert foundation -- the robert wood foundation, the american board of internal medicine. without these organizations we would not be here. our premise as the leading journal of health policy is also a non-partisan peer-reviewed journal, a serious discussion is warranted. we were founded in 1981. my predecessor is in the room today. john would be the first to tell you that health affairs has been in the business of covering health reform since 1981. buhealth reform -- we are very

delighted to be sponsoring this session. as many of you have been deserving -- many of you have been observing, these discussions are not always proceeding at the highest level. this is part of the reason why we decided we needed to have this today. some of you may have seen this cartoon earlier summing up how the tonme is at some of the town hall meetings. we will allocate questioned time among -- [unintelligible] we have attempted to be something of an antidote to this. we recognize these issues are difficult to follow. this fake protester is holding up a sign saying "we have no idea what we are talking about." we recognize these issues demand a longer conversation than is frequently the case.

voyage of thinking that we could do something useful, we selected several topics that we thought we could bring something to in order both to harken back to work that health affairs had published in the past and also capture some of the issues that we understood were of great concern to the public. we do not pretend by any means that this is a comprehensive systemic review of every issue that could possibly come up in health reform and by the same token we do not have a universally representative sample of speakers representing every possible ideological, ethnic, geographical or other perspective. we're not pretending that we're doing that. what we are pretending -- i hope more than pretending what we're doing is bringing you some solid, substantive nonpartisan discussion on some of these very key issues. we are most honored to have a couple of special guests on the line with us today to kick things off. these are individuals who as

they will tell us and remind us have been in the healthcare trembles for quite some time and have a very special perspective personally as well as professionally on the importance of health in the united states. first, we are most honored to have on the telephone lean with us this morning from his home in hanover, new hampshire, former surgeon general c. everett koop let me mention that dr. koop is about to celebrate his 93rd birthday this year. he received his degree from cornell medical college following his undergraduate degree from dartmouth. after serving an internship in pennsylvania he did postgraduate training in pennsylvania. he received a doctor of science and medicine in 1947.

he was a pediatric surgeon for many years and is presently a professor at dartmouth and head of the koop institute. he was appointed but surgeon general and deputy assistant secretary for health in 1981. as surgeon general, he oversaw all of the activities of the public health service commission. he took a great interest and smoking and health and environmental health hazards of, and became the chief spokesperson on hiv and aids. he continues to be a force for public health and we are delighted to welcome him this morning. are you on the line? >> i am on the line. >> good morning. >> good morning to you. i am pleased to join you today

by telephone. i wish it could be with you in person but my doctor has advised me to minimize unnecessary travel. when you are 92, i want you to remember that you always should listen to your doctor. [laughter] i have spent my life in the trenches of health care as a physician and surgeon, as a public health professional and as an educator. since my retirement from the post of surgeon general, i have devoted much of my life to the subject of health care reform. we are now at a place where little is more important to us than having a first class health care system that truly advances the health of the american public. since -- we are now at the place

where we are facing critical questions about shaping a system that is equal [inaudible] in that context, there are many serious issues that demand serious debate. forums such as today's are essential to that objective and are essential to our democracy. i congratulate the participants and sponsors and audience, and wish all of the well as you advance these discussions today. signing out from hanover, this is c. koop. [applause] >> thank you so much, and say hi to your doctor for us. we are also very grateful to have with us from the telephone

line richard carmona. he was the 17th surgeon general of the u.s. he served as the top doctor at that time issuing calls to action also against major health concerns such as obesity, cancer and the dangers of secondhand smoke. he focused on shifting the paradigm of health care from treatment to prevention, stressing that healthy living is a key component of medical care. he has been passionate about eliminating health disparities and has educated the american public on health issues said they can make informed choices. he also has become a specialist in public preparedness. he grew up in an impoverished hispanic family, dropped out of high school and experienced health disparities firsthand. he went on to become a decorated

green beret in vietnam, a swat team member and graduated from college and medical school at the top of his class. his broad medical career includes having served as a nurse, a trauma surgeon and community physician before being voted into office of the surgeon general. . . which is as many of you know the 27-year-old life enhancement company. company. he's chov executive office@@&@@r in fact, before i became the

17th surgeon general of the united states, as you heard, i worked as a paramedic, a registered nurse, a physician, a surgeon, as well as a public health officer, a hospital ceo, and a professor of surgery, just to name a few. i have degrees in medicine and public health. i became more acutely aware than ever as the surgeon general of the public health needs facing our country. ehooves all in our great nation regardless of party affiliation to take the current debate over healthcare reform seriously and participate. help drive the debate to a rational and logical conclusion. i too salute today's efforts and others like it that are taking place around the country to bring all serious and reasoned perspectives to bear on this discussion. and, susan, thanks for yours and health affairs and our

colleagues' leadership to bring us together for this important conference that hopefully brings clarity and transparency to this complex issue. and from tucson, arizona, where the probably hotter today than in washington, this is rich carmona signing off. thank you. [applause] >> thank you so much, dr. carmona. we had also invited dr. david sacher to say a few words this morning. unfortunately, he was unable to join us even by telephone but also sent his regards and support for this conference. i'm most pleased now to introduce david colby from the robert wood johnson foundation. he's vice president of research at the foundation. his bio is in the packet and he has a few words of greetings for us. david? >> thank you, susan.

on behalf of the robert wood johnson foundation, i want to thank you and everyone at health affairs for hosting us today and especially for putting together this event. it comes at a crucial time because as we've all seen over the last couple of weeks, over the last month, the facts of health reform are too often getting lost in piles of myth and gigabytes of fear or maybe i should say terabytes of fear or if i could, i think, make up a worth zetabytes of fear. as some of you know, i spent nine years at the physician payment review commission and then at medpac. and i was there during the last health reform debate. i'm proud of my years in washington. unfortunately, i had a front row seat to watch the last debate on health reform be derailed by

panic and the politics. as a researcher and a fan of dragnet, it pained me to see cold hard facts and painstaking research drowned out by the likes of harry and louise. so with joe friday ringing in my ears, just the facts, ma'am, i want to do my part not to let that happen again and sessions like this certainly help. in order to fix which is inarguably wrong and broken in our healthcare system, reform efforts must be driven by research and data and for this go-around, lawmakers and policy expert have no shortage of objective information. they are now guided by tremendous arsenal of what's wrong with the healthcare system and how to fix it. we know much more than we knew last time. we know definitively that americans receive the wrong care or at least not the right care about half the time. we know that even though we

spend more on healthcare per capita than any other country on earth, our outcomes are not the best. we know that there are huge geographic variations within the united states on who's receiving what care at what price and whether it's working or not. as a private philanthropy our role in the healthcare reform debate is to provide our leaders and policymakers with the resources and tools they need to support the healthcare system that will achieve coverage, and improve quality, value and equality for all americans. that's why we support health affairs and why we're working with susan and her team on a series of health policy briefs that provide clear, accessible overviews of the most salient health policy topics of the day. the briefs include competing arguments on all sides of a policy proposal and relevant factual research. the briefs and a lot of other

research-based information are available on our website by visiting healthreform.org. the foundation's dedication to objective research and above all just the facts is why we are proud to support today's symposium. in closing, i want to thank all of the participants for sharing their knowledge and their dedication to the issues that are important to all americans. thank you, susan. [applause] >> thank you very much, david. david mentioned the health policy briefs. we are also bringing out a new health policy brief today that deals with many of the subjects we'll be covering this morning. that and our earlier briefs are available also on our website at www.healthaffairs.org. they are available for free and we encourage all to access them. we are now going to move on to

our first panel discussion. and again, we selected some specific topics that we thought were going to be of most interest today based on what we thought was the greatest area of interest in the public at the moment. what we could gauge was of concern at the town halls and so forth. and that we believed was this whole question of the fear of government-takeover of the healthcare system. all of you have heard variations on this theme. i simply selected one here that was written up in roll call a few days ago about a woman who went to a forum with senator chuck grassley out in iowa. this woman is a 61-year-old factory worker who was one of 2,000 people who showed up last week at one of grassley's town hall meetings. as you see here, like many of her counterparts, she had a message for the iowa republican, a key healthcare negotiator stopped president barack obama and congressional democrats from enacting their healthcare plans.

and she goes on to say, quote, when 9/11 happened i was very terrified. i honestly am more terrified now than i thought my government was going to protect me. now i'm afraid of my government. we have the car industry being taken over, the banks were taken over, now i feel our healthcare. i think we have -- we're leaning towards socialism and that scares me to death she told grassley and this is in the methodist church where the town hall had to retreat because it had overtaken the capacity of the earlier facility. this led us to believe that we needed to go back and look again at some of the basic facts. what exactly is the role of the u.s. government today in paying for and/or providing for healthcare? and how might this change under leading health reform bills now in congress? and we've asked two distinguished people to address these topics in sequence. first we're going to hear from

lynn nichols the director of the health policy at the new america foundation and he's going to lay out just so we're on the same page what does the u.s. federal government do in healthcare today? then we'll hear from gail wilensky who's a senior fellow at project hope, a veteran of many positions in government in particular having been the administrator of the healthcare financing administration now the cms from 1990 to 1992 and also having served in the white house under president h.w. bush as a health policy advisor there. gail is then going to talk about how the government's role might change under leading health reform bills now in congress. so first let me turn to you, lynn nichols. ..

>> sorry, my kids are in algebra. i could not do this as best she could. it is an honor to be on a panel with susan. i will cut right to the chase. my job is to talk about government. sometimes, people say, i'm from the government and i'm here to help. i am from a think tank and i am here to explain. this is the one-minute version. basically, you want a government to do stuff that you want done that we cannot do alone or we cannot get down through the marketplace.

the public good, the simplest example is national defense. it is something that benefits us all, but you can benefit from it even if you do not contribute. because of that, free societies left alone will not have enough and be conquered by the visigoths or al qaeda or whatever the enemy is. national defense is essential. police, fire, things that benefit us all that it is hard to exclude people from. things that are so good are so bad that they affect a lot of people beyond the people doing directly, like public education. like public education. think about it for a minute. we're all better off because everyone can read and stand in line. sometimes i debate which of those two things you learn in school are most important, but they're both pretty essential to civilization. similarly, pollution is a negative externality, something that if we don't intervene on, we'll have too much of. so government steps in when things spill over from one person to another.

little known function except to economists but it's really important, promoting competitive markets. if we don't have markets that work, it's kind of hard to depend upon them, so paying attention and making them work is an extremely important function and this is by far the most controversial. redistribution of market rewards. if we did nothing in the redistribution sphere, people would starve. we don't want that to happen, so we do some redistribution. we argue about how much. that's what politics is about. and then finally, macro economics, stabilization, we learned in the great depression, if you don't intervene, you can actually have an economy implode and that's why sometimes you have to intervene at the macro level. so how does this translate into health care? public goods, a good public good example is knowledge. knowledge comes from research and dissemination. what we do in this country at the federal level is we pay for basic research through the national institutes of health.

$30 billion a year. i won't go through every program, trust me, but $30 billion of nih money flows to create new knowledge which is used in lots of ways. agency for health carrie search and quality spend $50 million on comparative research. we spend $30 billion on new knowledge. $50 million on comparative effectiveness. centers for disease control, $1.9 billion protects us from diseases that could be imported by foreign agencies. electronic information highway is a public good, is a thing that can make us all better off. we'll have too little of it if we don't have intervention. food and drug administration, making sure that the drugs we get are safe and effective, making sure that labels of food are clear. and indeed, professional licensure is pretty important, because you wouldn't want me practicing medicine. the time i'm most nervous in my life is when somebody calls me

dr. nichols, because they think i can actually deliver a baby or stop a wound. second hand smoke laws, thinks about that. we learned from research, david talked about, that somebody else smoking can actually give you cancer. how can you stop that if a free society unless you have some kind of loss? so there's a lot of stuff going on. no state and local governments deal with restaurants. federal laws, the reason you don't have smoking in hand airplane anymore, because that's interstate commerce. promoting competition. insurance market regulation. left alone, like all good folks trying to make money, they'll colewd. this is normal. so in 1944, anti-trust case stopped it and we turned regulation of health insurance hover to the states. as long as they did it pursuant to federal interest. anti-trust of course. anti-competition. hmo act actually was a crowbar used to force a kind of competition into the marketplace that was being suppressed by lots of different interests. medicare advantage plans came out actually in theirlb4@@@@ @

the idea was to have private insurance compete with medicare in a way that seniors would have a choice among them. the modernization act did the same thing for drug coverage for the medicare population. here is the most controversial, redistributing access to health through government. there is direct provision. we spend $39 billion on about 5 million patients. we spend $3 billion on 2 million patients. state and local hospitals, there are over 1000 of them. their 23% of the total of all hospitals. most of them are small, county hospitals. nonprofits are 60%. we make direct grants to community health centers. $500 million state and local. they serve about 18 million patients, but -- patience.

on of access to health through insurance, public insurance for the poor, for the disabled, and the elderly. and that of course is medicare, medicaid, and schip. the most recent data i could get to compare everything was 2007. we spend $418 billion in medicare. we spent $340 billion in medicaid and schip and of that 340, 59% is federal. medicaid is a federal and state share. so the federal public insurance payments per year, right now, $610 billion. now, just to give you a little bit of perspective over time. in 1960, before we had medicare, before we had medicaid, we spent about 5% of gdp on health care, and that's now 16. out of pocket spending used to

be 47%, now it's 12%. go to bottom row. public spending used to be 25, now it's 46. fundamentally, what has happened is that we have substituted collective dollars for the out of pocket payment, of mostly the elderly and the poor, who had no coverage in 1960. that's the biggest change in the way we've organized our health system. we pay for people who couldn't pay for it otherwise. ok. in perspective, this is total health care spending on personal services, 22% comes from medicare. 17% from medicaid. others include v.a. and d.o.d. and just think about medicare, medicaid and then private insurance. private insurance is bigger than either medicare or medicaid, but not bigger than both. for hospital care, med compare is a bigger relative payer, because the elderly obviously go to the hospital more than those who are not elderly, so they pay 28% of hospital care.

note again, private health insurance is more than that and medicaid is 17. for physician visits, what you see here is a reflection of both the fact that most of the medicaid population is relatively healthy and we pay relatively poorly for doctor visits and medicaid. medicare is 20, medicaid is 7. private insurance is 50. so when you think about who pays for doctors and who pays for hospitals, most of the money comes from a private source, and medicare and medicaid make up the different percentages. now one thing you should know about public payment rates, in case you don't. is that two-thirds of all hospitals, two-thirds, have a negative medicare margin. medicaid pays differently and less than medicare. in general. so our public payers are not what you'd call wildly generous. both pay less than private payers an of course this is one of big controversies that is role, but it's a very serious fact. private payers pay a heck of a lot more per patient relative to

cost than do medicare and medicaid. i'll close with a reminder of what this debate is about. what i'm showing you here is that basically, 35% of our population in poverty is uninsured. medicaid takes care of some of the poor, not all. and some of the poor, believe it or not, actually have employer but 35% are uninsured. they represent 36.5% of the uninsured. ok. and the big point here is that roughly 60% of the uninsured make less than two times poverty. also, interestingly, 10% of uninsured make more than four times poverty. uninsured are heterogeneous. most are low income, but not all. let me remind you what the cost of health insurance is, which is why this stuff costs so much. what you have here is a family policy in 2008 according to

kaiser 12-6, a family of three at two times poverty makes 35-2, if they bought an insurance policy on their own, it would be 36% of income. if they make three times poverty, it would only be 24% of in con. -- iome. and that my friends, is why reform costs money. thank you very much. [applause] >> i see we have a little problem here. if it's up, i can't see you and

therefore probably you can't see me either. when susan asked me to do this part, my first reaction was to laugh. and say, how will the role of government change in health care reform, and i said, aha, that's a trick question. because i don't know what the reform is going to look like. but after i thought about it for a while, i thought, well, ok, it's a hard question. we don't know exactly what's going to happen, and the bills which i am not going to review for you in any kind of detail differ substantially. there are a variety of places that you can go read these bills that have been summarized, they're very important, you ought to go do that, but there are some areas in which they are quite similar and i am going to

talk a little bit about what is likely to happen, assuming we have any health care reform legislation passed, which i do believe continues to be likely, although we are in a point right now in august where everything seems uncertain, but my presumption is that we will see some legislation passed by the congress before the end of the year and signed into law. it does seem that we have seen a change in focus, at least in terms of the way that the legislation is being discussed. and that is what had started out initially as being a discussion of health care reform, and a lot of discussion about what health care reform might entail, has now become a discussion of health insurance reform. i'm sure all of you have noted this difference. it is important to try to distinguish whether this is a

selling strategy to focus on the insurance part or in fact, whether or not, it this really reflects a difference in focus, in terms of moving away from him care reform, -- health care reform more generally, that is focusing on the delivery system changes that we all have discussed in these types of groups, to much more of a focus on making sure that health insurance is expanded to the population without it. the real problem in trying to have a discussion about how will the role of government change with health care reform, is right now we don't know which of the bills that we have seen thus far will prevail and they differ in some important ways and of course, we have not seen what could be the most important of the bills, because it is the one that has had the most effort the being bipartisan and that is the bill that the senate finance

committee will be releasing sometime this fall. there are the three committee bills that have come out of the house, they differ from the initial bill that was under consideration by the house. we have heard discussions in a very general way by the administration of the points and the principles that they think are important. there's not been a lot of specificity. i think this is clearly in response to what they believed was a strategic mistake in the attempt in 1993-1994 of the health security act to get health care reform passed. we have seen the senate health bill, but it did not have any financing associated with and so many of the most controversial issues, that is, how do you pay for health care reform or health insurance expansion, has not been included. we will know much more presumably in september or

whenever it is that the senate finance committee releases its provisions. now as you look in terms of the kinds of changes that people talk about, when they talk about the changing role of government, we need to understand that it's not just more government. clearly, people are concerned now about how much more government may be in their lives. susan mentioned in her introduction that what we are seeing in her opinion and i agree with this completely, is in part a response to all of the change that people have witnessed in the last year, or year and a half. just as the presse on the administration to only be able to spend on health care what they can finance is a reflection of having already had unfunded bills, like the tarp bill and the stimulus bill.

what we are seeing in terms of people's concern about the expanded role of government is reflecting what they have been experiencing in the last year, where they have seen very substantial increases in the role of government in areas in which we as americans are not used to seeing them. in the financial system. overseeing c.e.o. pay. being a major shareholder in g.m. and chryslerl and now, directly subsidizing people to buy new cars. it is in that context that i think the question about what exactly is likely to happen to the role of government with regard to health care takes on a new frenzied reflection of concern by the american people abandon just as the -- and just as the ability to finance unfunded expenditures for health care would have been very

different, without tarp and the stimulus package, in my opinion, the concern we are seeing raised right now about the expanded role of government would be very different, had we not had all of these other events occurring in the last year, but we have and we need to take them into account. in discussing the changing role, it's important to understand that it's not always just about more government. a lot of what we will see in health care, although we will see more government in any of the reforms that we -- reform packages that have been introduced thus far, is the shift to a different level of government. in particular, in health care, significant shift from the state government to federal government, you'll though in some cases, -- although in some cases, we are seeing proposed changes that would indicate a shift from the legislative branch potentially to the executive branch and i'll talk abt that in a minute. while i've indicated that we don't know exactly the

dimensions of change that we're likely to see, because we don't know which of these quite different bills will prevail in the end, if any legislation is passed, and as i've indicated, i think that is likely, there are some changes that seem clear. the first is, we will see substantially increased spending on health care by the federal government. the initial estimates of what it would cost to get everybody covered were about $1.5 trillion. i don't think right now that is thnumber that we're likely to see because of the problem that we can only do what we can pay for, but that is probably the number that we would see had we not had all of these other unfunded bills that we've had to deal with over the course of the lack year. what we have seen in legislation are numbers like, $1 trillion over 10 years or $900 billion over 10 years. it's hard to believe that a

trillion in the context of a trillion and a half is starting to sound more modest. whereas, even for somebody who used to run the medicare program and thought that big numbers were a part of my lexicon, it is hart to be quite so quick about throwing around numbers that start with trillions rather than billions. it is also possible, because of the issue that i just raised, which is, we will only see passed what we are able and willing to pay for, that the final bill could be something smaller than the 900 bill that we're talking about. i just threw in arbitrarily $600 billion. lower number might be, but it is of expansion than what we have seen now being discussed, which is $900 billion up to $1 trillion. it will fundamentally depend on the financing strategies that

will be able to be passed by the congress. for sure, the first change that you will see is substantially greater spending by the federal government on health care if there is any health care reform passed. how much change will occur in medicare is also not clear. the administration has been proposing a reduction in spending on medicare over the next 10 years in the neighborhood of $500 billion, $600 billion. a lot of discussion about this. a lot of concern has been raised by people on medicare as to whether or not this type of change will impact them as seniors. my advice is you should not assume it will not. it depends very much on how these changes are implemented. we need to understand that in general, what we have seen when

we have seen substantial reductions in spending is that some of the reductions are good, coming out of low-no use spending, and some of the reductions are more questionable. ur mind about the truth of this, think back about what happened when drg's were introduced with a deliberate attempt to lower the length of stay by moving from a per diem payment to a payment of diagnosis at the time of discharge. it took about two months after drg's were introduced, quicker, but sicker. and what that was reflecting was that while the days were shorter and many of the people who were discharged earlier were ok, some of the people who were being discharged earlier were sicker than they would have been and sicker than they should have been otherwise. again, a reminder that when you

put downward pressure, it's very hard unless you have a lot of selective changes going on to be confident that there won't be any unintended consequences that occur, and so the exact savings is something that we'll have to wait and see what is negotiated and what it is likely to mean, and reassuring seniors that their access will not be negatively affected, will be a very important part of the selling job for whatever legislation is passed. in terms of insurance, that's probably where we see potentially some of the biggest changes in terms of the role of government. for sure, what we will see, that is the nature ofúwhat is being proposed, is a lot more federal government responsibility in what has been an area where there has been very little federal government responsibility in the past. insurance, health insurance has, like most areas of health care,

been primarily under the jurisdiction of state governments. what is being proposed in many of the insurance reforms is that we will see this taken over by the federal government. it is particularly an issue for individual and small group insurance, but it is also going to be true at a larger level, where many of the businesses have not been affected by state regulation, because they have been part of the erisa exemption, the law passed in the 1970's that allowed self-insured firms not to become under the purview of state government, but basically, in health care at least, not to be under the purview of the federal government either. if there is an insurance exchange, it may or may not be at the federal level. it depends on which of the bills that you look at. some of the exchanges are being proposed at the national level,

that would of course mean more federal government involvement. some are being proposed to occur at either a regional or state government level, so it will clearly be more government, but it's not clear which level of government that will be, and finally, if there is a public plan, that would indicate a very clear additional role at the federal level. you would probably need something like a cmf style agency to operate and manage the public plan. you would have to make various decisions about how it would function. it is, i think, less likely to occur now than it seemed a month or two ago. but i would sale, it is by no means off the table. it is something that is still being under consideration and clearly, a very important issue to the left wing of the democratic party. much more so than it appeared to be early on in the campaign,

much more so than it appeared to the administration early on, although they have indicated all along, the president has indicated all along, he prefers this strategy but he doesn't regard it as absolutely central to reform. the fear is exactly what lin indicated when he talked about the payments under medicare and medicaid. right now, most hospitals have negative margins under medicare. medicare pays about 80% of the private rate to physicians. the concern both by the provider community and also by the private insurance community is that a public plan would have the full authority of government. it could will have those kinds of pressures reduced in producing lower payments to the providers and thus restabilize private insurance on a

going-forward basis. that is probably one of the most controversy lal issues that we will have to -- controversial issues that we whether have to see played out, not just because of the increased role of the government, but because of the potential repercussions on private insurance and on the provider community on a going-forward basis. the house has attempt he had to deal with this by including a provision that says that the public plan would not use medicare rates.s@ i have probably lived in washington far too long to take such an assurance, even in stattory language very -- statutory language very seriously. one short sentence or one piece of legislation removes that language and then you have a plan with the full power of government behind it. there are some other very important changes that are at least being considered. i just want to mention them. because they also have significant changes on the role

of government. we have what has been referred to as med-pac on steroids, sometimes called imac, independent medicare advisory council. it is an attempt to do something like the federal health board that senator daschle has mentioned and others have mentioned as a strategy to try to slow down health care spending. it would basically like some of the provisions of brac for the defense department, allow decisions to be by an advisory group, appointed by the president, confirmed by the senate, with regard to changes in medicare pricing. there would be an ability for the congress to disapprove it, but if it had been accepted by the president, unless disapproved immediately, would become part of the baseline and

therefore at this disapproval would have to be paid for in some other strategy. it clearly represents a very significant shift from the legislative branch, where decisions are normally made about reimbursements under medicare, to the executive branch. there is some recognition arising by members of the congress that is in fact what would occur, so we will see how much credence there is toc including this in a final piece of legislation.c there has been discussions about individual mandates, either of a hard or a soft nature. i would regard what massachusetts has as a soft mandate. you have to have insurance, unless you're if a category where it's deemed that there is not affordable insurance available to you and then you're excused. if you do that, you have to decide who will enforce this,

probably the federal government, but not clear. and what kind of penalty will be i am poetsed if you don't have it. similarly, all of the bills thus far have a pay or play provision for business. that is, either they have to provide insurance coverage, presumably meeting whatever the minimum benefit standards will be, that will be available for plans that are part of the insurance exchange, or else you will pay some kind of a taxn it looks like 8% of payroll is the number that is coming up most frequently, but that is again, not yet been decided. it could be something less than that. in any case, who enforces this and how the penalty is collected will mean expanded roles of government. all of these that i've described, all of the insurance changes, the insurance exchange, the potential role for this

med-pac on steroids, the mandates both on the individual and the payer pay provision, represent significant increases in terms of the role of government. so for me, the bottom line assuming legislation is passed is to say there clearly will be a significant increase in government spending. we've talking probably in the neighborhood of $1 trillion over 10 years. give or take a little bet. -- a little bit. we are indeed talking about an increase in government power, particularly a shift from what has previously been state responsibilities to federal government responsibilities. we are likely to see a significant increase in the number of people without insurance coverage. the numbers that lin cited in terms of their distribution are numbers that have been present for the last 30 years. a study that i was involved

with, 1977, expenditure survey, had one-third of the people who were uninsured below the poverty line.c 10% or 11% above four times the poverty line. this is clearly a problem we will only fix by active legislative and policy changes. what to me is actual little the more relevant question, since if you want to lower the people without insurance coverage, it is likely to take substantially increased spending by federal government, and if you are going to reform some of the concerns that haveúbeen raised about insurance as we now know it, you are going to increase government power in terms of how insurance is regulated, is whether we really are seeing health care reform or not, and in this case, the questions are far greater in my mind. whether we will really see

spending slowed over the next decade or so, whether we'll really see health outcomes improved, more emphasis on wellness and preventive care. all of those are far less clear to me in terms of the health care bills that are being considered. if i had my choice, i would have people worry much more about whether or not we are actually reformingest health care system in terms of the legislation we're considering, rather than just worrying about how much additional government we are imposing. but if fairness, that is a legitimate question to raise as well. thank you. [applause] >> thank you very much, gail and lin. we're going to take some questions now from the audience. we have some roving microphones. we'd ask you to wait until the

microphone comes to you before you would ask your question and if you would identify yourself by name and affiliation beings that would be very helpful. while we're waiting to see if there is a question from the audience, i'm just going to start with one from the pod rater's prerogative here. linl what i understood you to be saying is the single biggest change we've undertaken in our society is we pool our dollars through the government to pay for care for people who used to not get it at all, chiefly the elderly and the poor and what we're talking about now is adding some more to that pool. more of the poor who we have not covered to date as gail said and this has been a stubbornly resistant problem. so if you had to characterize that, are we talking about a huge change or are we talking about a change at the margin? >> well, it depends on how you define margin. the reason i put the numbers up

there that we spend over $600 billion a year to take care of the poor and elderly, what we're talking about, a fully phased in coverage of all the uninsured would probably be about 150 become dollars a year. -- $150 billion a year. that is a big number. it's not as big as 600, but it's a big increase. i would say think about it as a fraction of g.d.p. over 10 years, 1.5 maps into 1.6 trillion, as a fraction of g.d.p. over 10 years, that is 0.8% of g.d.p. now, that's a little more than gail and i make, but it's probably affordable for a nation as rich as ours. the question is, and i think this is the single biggest question, are we willing to do what it takes to pay for to, and there are only three buckets. you can increase taxes, you can change the way you can do something about the

way we spend money in the medicare and medicaid programs. all three of them are necessary under this. the third, in order to bend the cost curve in the long run, i think we have to be willing to do all of these things to be willing to pay the price. i do not think the price is too big. it is certainly significant change. >> it is not the poor and the elderly. i think one of the reasons that we are seeing the kind of push back is that what we are seeing is not, let's cover 1/3 of the uninsured who are below the poverty line, or the group that are below 200% of the poverty line, as we did with the children's health insurance program. it is to say that we need to see covered everybody, but it is to take not just to we have already identified as appropriate targets of government action,

which is poor or even low-income and elderly, but to say, those groups and appeals. -- and everybody else. those were employment based insurance, those who are working but not getting coverage through an employer, who we would say have to get coverage through an employer, that's what you're talking about. >> this is not to say that they shouldn't be covered. i believe that people need to be covered. it is to recognize that what we are actively doing now is expanding the role of government beyond the traditional focus of government, the poor, low income and old, to directly receiving subsidies, whereas otherwise they indirectly receive very large subsidies because of the tax laws if they're receiving employer provided insurance, so it is expanding the role of government for these other

groups, in order to make sure everybody has insurance. >> and gail makes a really important point and that is we're not used to thinking about people above poverty needing a subsidy nor anything else. and that's why i put the slide i did at the very end, at two times poverty, a mother of two would have to pay 35% of her income. at three times poverty, it's 24. the truth is sports fan, we waited too long to do health reform, it got too expensive, but we're in a situation where we have a disconnect. we think of the poor as needy, but for health insurance, more than the poor are unable to may for it. that's the question before us i think. >> all right. let's take a question here in the rear please. >> let's pick up on the pushback point and so let me ask you, what's your understanding of -- or what's your best guess in

understanding this pushback, and in providing that explanation, then what's the policy argument or solution to address that pushback, and let's just leave aside the glaring issue that the fpl needs to be completely recalculated. >> >> fpl being the federal poverty level population. >> well, i think gail hit it on the head, that we are in a situation that is so unprecedented in our history to have been faced with an economic calamity, like i think it's fair to say, a broad consensus of folks thought we were last fall, let's not forget, paul son and bernanke going to the hill saying you have to act now. gail will tell you now is not a popular word in congress. it's hard to do. and they ended up with a tarp package that was a big, big chunk of change. the stimulus package was $800 billion more, then we got

tarp two and the autos, we owned a couple banks and insurance companies now and this is really unsettling to a lot of people. i get that. it's about if my view, the ideology of the role of government. how can this be a good idea? unfortunately, i think we're in the context where all that's true, but we still have i would say, $50 million uninsured today, because of the economic decline, and we still have a situation where the richest country on earth has people who get cancer, can't work anymore, lose their coverage, can't maintain cobra and they die. we don't really want that to be what america is, and in my opinion, we can afford better. what we have to do, i think, is extremely calmly accept the angst, accept the questions, deal with it. to me, the frustrating part is not the question. the frustrating part is the relatively small percentage of population, doesn't want a discussion. that's what's hard. we've guilty to have a discussion. -- got to have a discussion.

that's what august is supposed to be about. we're trying, but that's really what it's about. >> do you want to add anything to that gail? >> i think what you are saying, lin and i have shared many panels and laugh that we can take each other's positions on some of these panels, we have had an ongoing, serious problem in health care. 15% of the population, without insurance coverage, and unsustainable spending, a couple of percentage points faster than the economy, and real problems with regard to clinical outcomes. everybody who knows anything about health care knows that that is something that you could have said this year, last year, five years ago, 10 years ago, 20 years ago, the number might have been 13% of the population without insurance coverage. there is a passion and a desire by the president and the congress to do something about that, and we need to do something about that. it is their great misfortune

that they are trying desperately to do something about this, in the context of having to have dealt with this economic blow to our country, which did require having it be addressed first and that that has put restraints and concerns in place that they would over wise have not felt, but we are not going to resolve these issues unless there's active policy. we saw in the late 1990's, a decade of robust economic growth and the only reason the number of uninsured didn't grow, because there was a decline in employer sponsored insurance, was because the children's health insurance program was passed in 1997 and that compensated for the people losing employer compensated insurance, so if we're going to fix the problem, 15% of the people without coverage, we're going to have to have explicit policy changes. to my mind as an economist, what

is even more important for the economy as a whole, if we are going to slow down government spending and improve health outcomes, we are going to to make a lot of changes in terms of how physicians and hospitals are reimbursed, how they're organized, our whole emphasis on preventive and wellness care, rather than only sickness care. we don't know how to make these changes happen. we have to be much more honest, that it will take time and trial and error to figure it out. and as soon as we can figure out the mode else that work, that produce the intermountain health care and the kaisers and the mayos, we have to try to help them spring up otherwise in the country, other parts of the country. but we need to not be so glib as to say, oh, with their $700 billion of waste out there, we can just go grab it somehow and then we'll have financed health care reform. we know where we want to go for the most part.

we don't know how to make it happen. >> all right. we'll take one more question here in the year. >> lou diamond, thompson and reuters. i go back to the 150 billion and the distribution and two questions. one is can you give us a sense of the distribution of that 150 across the income spectrum, and this is obviously not all low income and how that compares and how would he should think about the tax deductible handling of private sector insurance hand how that distributes across income and should we not be including in our discussions that comparison always? >> yes. and we'd like to hire to you do this talk from now on. that is the perfect question, because fundamentally what you've done is described one pyramid where we know in order to get the 50 million covered, we're going to have to subsidize people at the bottom virtual my

completely and you can scale it back as you go up the income scale. my view, you could probably pull this off, subsidizing people up to three times poverty, maybe some would want to go to four, but we could do it at three. but the current subsidy that we useúthrough our employer system is the actual reverse, that is to say, we subsidize bill gates rate and the people who pick up our garbage every night, now have been put into firms without anybody else in the firm, they get no coverage, they get no tax benefit, so we basically have an inserted situation here and we could absolutely minus 1 make mother both more efficient and more fair. >> if you want to know the numbers, it's about 60% of the people are below two times the poverty line. that's who would -- about 60% of that money would go to them. 40% would go to people above two

times, but it's mainly the two to three times the poverty line is the concentration as you've heard, it's at roughly 10% of the uninsured are four times or more of the poverty line. almost all economists, except during campaign periods apparently, would tell you that we should get rid of the tax exclusion from employer-sponsored insurance or limit it, because it encourages people to buy more insurance than they might if they had less buy assistance. and because it is terribly unfair, it is worth more the higher your income. the senate finance committee sounded like they might consider it, now they're sounding less like they might consider it. it's a huge amount of money. it is -- lin had a wonderful phrase. it is off the table but still in the room. and that's because the congress is so desperate to finance these

expansions and because this makes so much sense, it will -- it has political challenges, the unions don't like it, although you could exempt existing contracts, and of course, the president trashed the idea during the campaign, so that makes it a little politically awkward, but way more awkward things have happened in hour history than that. >> well, just to wrap up this really excellent discussion, what we're taking away from this is from lin's presentation, the federal government is very, very substantially involved in all aspects of health and health care now. and what we take away from gail's presentation is that to the degree we're talking about adding to any of this involvement, yes, it's somewhat more, under all of these proposals, and a lot of it is not necessarily more, but different. different levels of government

taking over responsibilities, moving them from the state to the federal level, for example. so i have guess we're left here with asking the goldie locks question, is all of this too much, is it not enough, is it just right, is it probably necessary if we're going to accomplish the goal of covering the uninsured, is it probably not enough if we want to really bend the curve? how do we reach a judgment on this? and i know this is a qualitative question, not a quantitative question, which may make you as campuses very uncomfortable, but i'm -- economists very uncomfortable, but i'm asking it anyway. >> the increased spending in the increased amount of government is not as worrisome to me as of the lack of focus on reforming the delivery system, point one. and point two, some of the

proposed changes are either needless or potentially very disruptive and i would put the public plan, number one, in that category. there are other ways to resolve some of the problems. you need to be very careful that you understand which problems you're trying to solve and then think about whether it's the best or the only way to do it. in terms of what is being proposed. it's at that point where you could change or reduce some of the increased amount of government regulation, by using a different mix of regulations, and expansions. but if you're going to solve this problem, you will need increased spending and you will need more regulation, that is a fact. >> i would certainly agree with all of that. i think what i would say in terms of the goldie locks question is both god and the devil are in the details. i think that if you imagine that

we do indeed want to solve these problems, that is to say, so many of our people don't have access to care, 20,000 die every year, according to the iom, we want to solve this problem. we're going to have to spend some money, we're going to have to increase the role of government. however, some of that, in fact, all of it could be relatively smart. it's an option. it has happened. you can do this without the heavy hand. you can do this in such a way that actually makes markets work better. that's the pointsn to do that, you do have to pay attention to incentives and toys. if you pay attention to incentives and choice, you can bend the curve. it is hard to talk precisely and seriously about bending the

curve when you are being accused of rationing for raising the question. that is why we spend a lot of our day time trying to promote bipartisan conversation. to do this, you need both parties to make it happen. then, you suspend or at least let that ideological attack. if it becomes a partisan, for whatever reason, and we can all name 30, it is much harder to be an adult about bending the kerb at the same time -- the curve at the same time. >> thank you, both of you, for getting us off on a terrific level this morning. [applause] . orifex topic, which we have seleed this morning. and it is the concern that has been raised about what happens if you really try to reduce the

rate of growth of one particular program. medicare. sometimes this has been referred to as a medicare massacre. and once again, i want to reach and once again, i want to reach out to the news media to s a representative story that seems to suggest the tone of this is a police that ran in politico last week. the reporter cites the fact that frustrated older americans are a packing town halls, very passionate about their medicare benefits and very disapproving of the health care reform ideas that they appear to have heard so far and the reporters go on to remind us that these people, this demographic votes in larger numbers than other demographics, which is part of the reason their voice is taken so seriously. at the tuesday of last week town hall event in new hampshire, president obama made a point to reach out to many of these

seniors, he took note of the low support if polls for his health proposals and said we're not benefits. however, the reporters go on to point out that obama is talking about hundreds of billions of dollars in savings for medicare, cuts supporters say will trim fat from the program, including slashing and this is a very important word that people in the news media often use, slashing, just very graphic slashing $156 billion in subsidies to the medicare advantage program. the privately administered medicare program. this is the cause of such concern, that we thought it was particularly important to just focus on the medicare -- proposed medicare changes, in many of the pieces of legislation today, so we're going to discuss now, what are the implications of slowing the rate of growth in medicare spending, and we want to

emphasize that phrase, because despite the use of the word slashing, what we're really talking about here is medicare not growing at this rate, but growing at this rate. so if we slash it that much, what happens? and what, if anything, impact would there be on beneficiaries and we have three terrific perspectives to bring to you now. first, from the vice-president of the peter j. peterson foundation, then we'll hear from darryl kirch, the president and c.e.o. of the association of american medical colleges, who will be speaking about many of these changes from the perspective largely of physicians, and then from the president of the health research and educational trust, and senior vice-president of research at the american hospital association, who will be speaking about these changes from the hospital perspective, and again, since much of the savings comes out of the

hospitals, it seemed particularly important to address what might the impact be on beneficiaries as felt through their hospital care. so let's turn now to hear first from jean sterly. >> thank you, sue son. the title of my talk kicks off from almost the last name of lin nichols about let's talk like adults and let's talk like adults about health care reform is related to medicare spending. in many ways, i feel a little bit like the basketball coach who had a player one time who was very nervous at practice, so the coach asked him why was he so nervous an he said his sister was about to have a baby and he didn't know whether he was going to be an uncle or an aunt. i think in many ways, that's the way the debate over health

reform has proceeded, in particular, with respect to how medicare spending is going to evolve over time. the first fiction that i'd like to put to rest is one that cannot only come up in this debate but was famous in the debate over the hillary clinton health care reform as well. where congress should keep its hands offer of medicare, and -- off of medicare and you hear this a number of times. in point of fact, congress does regulate medicare, it empours the executive branch to do things in medicare and med compare is a publicúprogram, so one way or the other, congress is going to regulate medicare. the debate is not whether congress should keep its hands off of medicare, but how far should it actually regulate medicare and how can it do it in the way to provide the maximum benefits to the public. now the simple fact is that medicare and health spending are on annsustainable path and given that they are on an

unsustainable path, congress is going to reform medicare. if you remember one thing from this, that so far, real medicare reform is not on the table. gail emphasized that, lin emphasized that a little bit if his talk. for the most part, medicare reforms that are being discussed are fairly modest, most of them relate to providing information that might, might be used down the road to try to control costs, and this is in a system that's unsustainable. just to realize how health costs in general are at an unsustainable path. this is just a projection made by the congressional budget office of health spending which is the bottom line on this graph, vis-a-vis other non-health spending in the economy and what shows is that this health spending, it includes not just medicare spending of course, but other health spending as well, is growing by leaps and bounds, basically shoving aside almost everything else that is being done in the economy.

and the same is true for the government. if you look at the government projections over the george w. bush administration and over the president obama administration, at least as under current law, the greatest changes under both these administration is basically an increase in medicare spending and secondarily, an increase in spending on the elderly through other cash programs. that is, almost all of government growth, government growth that does come with economic growth, is basically projected to go towards programs for the elderly. i'll discuss if a minute this growth for the most part is not affect being the current elderly. the real question is what happens to middle aged people and whether this is where they view in many cases in the audience, whether this is what you want governments to be doing more of in the future, as it gathers more revenues due to economic growth. what's another fiction? as i said, 2009, is it going to see real medicare reform?

i doubt it. at least right now, what we're seeing is only a minor prelude to a real medicare debate that is going to come up. in fact, i predict it could come up as early as next year, when i think congress is going to have to start addressing these deficit issues. it's going to have to start addressing them because of the extent to which we're borrowing from china, it has to address them because people are concerned about tax operates rising enormously and it's going to have to address them because the growth in health care spending is involving aside almost everything else the government does. it will shove aside the brief interlewd, basically programs for children are scheduled not to grow at all. spending on health and retirement for typical elderly person is scheduled to grow from about $22,000 per person to over $40,000 in about 15 years or less. we're as spending on children is basically scheduled to stagnate. so all of these pressures on the budget are going to come into

play and i think they're going to come into play in very big ways next year, but so far, congress is afraid and the administration is afraid to really tackle them in any real way. just to see this in terms of some numbers. this shows you under president obama's own budget, where he projected revenues would go, now a lot of the revenue increase here by the way is due to the economy hopefully recovering and others are due to tax rate increases he proposed, but you see the bottom line is growth in medicare, medicaid, social security, interest, and defens e is in there too. actually defense comes down as a percentage of g.d.p., but it shows that nothing is left over for anything else, except by running deficits, so there's nothing as far as children's program, there's nothing left over for energy programs, nothing left over for turning on the lights in the capitol under president obama's own budget and this is happening now, this squeeze is taking place now and what it means is that real medicare debate, a real medicare

debate i think is inevitable in the near term. : >> in many ways the debate over health reform is small as a change compared to the changes that are already built into the current system. and so the real question we have

to address, conservative, liberal, like, democrat, republican alike, is how do we take all of these changes, but them into a package that is affordable and decide what we want most of. if we are middle aged, do we really want most of government growth to go to ourselves? or would we like some of it to go to our children that we would like some of it to go to the uninsured, that is a question that faces us and it faces us in big ways. now, there is a fiction that comes about, i think again on both the liberal and conservative side about fixing medicare. i would say in many ways there has been unison on not fixing medicare. from the left, you get the argument that you can't fix medicare by itself. we can only fix medicare if we fixed medicare as part of some very grand scheme on fixing total health care and er economy. i am not opposed to trying to fix health care in the economy. and is health care reform bill attempts and some moderate ways to try to do some of that. the notion that you can just

leave medicare alone, that medicare can operate without a real budget in the midst of all of this is somewhat silly. medicare is in many ways like the line in football. it leads. and if you talk to the head of the insurance company's, i have done that, they indicate that many of the prices that they set for the goods and services they provide is directly related to what they see medicare set as a price. maybe we can set a price sometimes all we can allow allow a price according to what private payers are paying. medicare leads. is the line. it is the begin july. and it actually makes a big difference in how total health costs grow over time. there is another metaphor if i can use it. and that has to do with the notion that we don't know what to do about medicare. health reform is as big as the economy of france. there is no way today we are going to determine what the economy of france going to look like 10 years in a. there's no way did it we will determine what health care will look like 10 years now.

that doesn't mean we can't make decisions and we can't start up processes. it sort of reminds me like parents arguing over child. you may feel your child needs to spend a lot more time practicing the piano or a lot more time studying. your spouse may be a little more lenient. a little bit of sesame street won't hurt. but if the kid is playing in the street, you can sit there and debate whether you want to get to watch sesame street or play the piano. but you shouldn't leave the kids playing in the street. in the matter, leaving medicare alone in an unlimited budget, an open-ended budget with little constraint on what is provided in the way of services by doctors, on what the public can demand, it just doesn't work. it is not a sustainable system. we are going to fight over the. were going to fight over the issue. will fight over next two and will fight over it 20 years from now. it still doesn't mean we can leave the system with an unlimited budget. medicare leads. it has got to accept that role. just to show you the role of medicare. this is just medicare in terms

of the total health spending. medicare is the bottom portion on there in terms of just huge growth, a percentage of gdp that it occupies. from the right you get the notion, well, medicare can't regulate prices. we know we don't like wage and price controls. they failed under president nixon. they will fail again. i hate is nothing but every insurance company in america, including medicare, sets prices. it might not set them very well, but there is something that stopped the drug company from charging an infinite amount for the drug. medicare doesn't regulate prices very well but it does set a price on everything it does. and it does decide what its medical care and what is not medical care. it does regulate. to the question of whether medicare should relate or not is a little bit silly. the question is how can we regulate it well. , and the issues we have to address, is how medicare favors specialization over primary-care, like other health insurance by the. how medicare favors chronic care

overtures. i talked to had the drug companies to admit they will spend money for chronic care research. they want to spend a lot less on chairs because chronic care raises a lot@@@@@@@@@ @ @ @ @ @ another fiction. , reform should avoid treating any losers. this is a great political fiction that comes about when you talk of a tax reform or medicare reform. the notion that the government is the all -- will only back and if -- winners. that is what government does. government operates on a balance sheet. there is nothing it does on one set of the balance sheet that doesn't have an effect on the other side of the balance sheet. the spending will be paid for, someone will come up with $500 billion. out of children's programs, it will come from somewhere.

everything government does is creating losers. the only policy that doesn't create lose is the status will. again, the debate is not whether we have changed, it is how do we regulate, organize a channel that energy doing toward good things. let me end with just a couple of other facts. the average health care costs per household in the united states now is about $21000. i am adding and not just the cost of your insurance. i am adding the cost of medicare, i'm adding it all in. average cost today is now $21000. this is the type of numbers that len nichols was struggling with when he said that we actually waited too long to deal with health reform. how do we pay for that? right now we alread pay for that through taxes of about $12000. by the way, i had in the cost of tax subsidies to the numbers you were before. and we pay about $9000 other means, largely by the way on the tax side by the way is through

deficits. what is the tax rate that is required to support medicare alone? in 1990 it was about 4%. in 2010 it is about 10% and in about it will take almost entire social security tax rate we collect now a 15% just to pay for medicare alone by 2003. those are changes that are built in the current law. those are changes we have to deal with. those are changes we hope to deal with when we deal with health reform in the grand scheme of things, but right now we are not dealing with them in his health reform package. thank you. [applause] >> i am here to speak about the situation ostensibly from the doctor's perspective.

i don't pretend toepresent all the physicians in america, and it would be an egregious error to imagine that physicians all have the same position on health care for. they are just like the rest of americans that they have all sorts of partisan inclinations one way or another. the point though i would like to make that i think has been lost in some of the dinner recently, is that there is something very common among all positions that seems to be in the background of this. and quite silly, that is the hippocratic condition. physicians are professionals bound together by an oath and in cornerstones of that oath are to do good, and to always avoid harm for their patients. that is there from day one. i am privileged to travel around the country and talk with everyone from medical students, or a spider and medical students

to the world's best specialist. that binds them all together and they all agree on that. that is why you do not hear physicians arguing against covering the uninsured. and for them it is not a policy issue. for them, they see the net impact on patients. they see what happens when an uninsured individual is allowed to have a chronic illness, blossom, develop, go untreated and then they show up in the emergency room at two in the morning. based in does that might've been avoided with better prenatal care. and they are the people who are at the bedside, as you will hear from my colleagues at the end of life. so they know it is critically important, not just an economic question. it is a human question, an ethical question, to cover the uninsured. and they are behind that. they also are painfully aware of what earlier speakers have lead to two, the lapses in quality, the lack of efficiency, the increasing affordability in the

system. and they want to see that rectified. so as i move to talk more specifically about the question at hand, the role physicians play in medicare and a larger health care reform, please keep in mind that ethical underpin. that being said, physicians are concerned about medicare. they have done their best to treat medicare patients over time, in a system that has some fundamental flaws, as i will mention. the thing that is a very immediate issue for them is we are not engaged now in the first attempt to contain medicare cost. there have been earlier attempts, some of them are playing out. one of the most blunt instruments that's been applied to medicare is something called for the policy in the room, the sdr, sustainable growth rate

around physician payments. it is an approach not focused o patient needs. it simply was an across the board attempt to tap down medicare physician cost. if that were allowed to go forward in its current configuration without some change in the legislation in front of us, it would actually cut physician payments this coming january 1 by 21%. the net result of that does not require a mathematic equation. if physicians can't afford, they can't maintain their practice financially, when they see medicare patient, access for medicare beneficiaries would fall. that is a simple fact and that is why in both the house bill that is before us and in the senate, you see a tense two in one way or another address this, to prevent falling off that acts as clip for beneficiaries. the issue about the medicare

reimbursement goes beyond simply the physician payment rates. there are lots of other support that flow through medicare, especially to what often are called the safety net hospitals. and many of those hospitals are familiar to me in academic medicine because they are teaching hospitals. they are often the places with the trauma unit or the burn unit. they are also the places where doctors learn their craft. there are a whole series of special medicare payment that go to those hospitals that have been at various times discussed as potential ways to sweep up savings, to pay for the cost of insuring those. in my view again, this would be another clip we could fall off, to destabilize the safety net hospitals at a time when we need them as much or more than ever. would be another one of those very unwise steps we might take in hopes of saving money. so the physicians i speak with are encouraged.

these issues are being recognized. no one is sure what the solution is, but they know that they troponin step, the use of blunt instruments like this will not get us where we want to get in terms of quality. this feeds into another aspect that really was alluded to here. our entire health insurance system, and that system is strongly shaped by medicare is driven by fee for service payments, essentially volume-based payments. to put it in the extreme, the more severe illnesses people have, the more treating them is incentivized. that is where the rewards in the current systemwide. we have undervalued primary care. this is the reason you hear so many people correctly say this looks more like a sick care system than a health system. i see more and more physicians

ready to step out of that world. the colleagues that i speak with know that being paid to intervene when things, illnesses have gone too far is not what they went to medical school to do. and they are ready to consider alternative payment methods that start to focus on value and outcomes as opposed to volume. that unfortunately is being talked about only peripherally in this debate, a point i will return to right at the very end. i want to also address a second point that i think is being lost in the current. the question of doctor joyce is a very legitimate one, and i got you the opportunity to pick the physicians that care for me. but the bigger question i think americans are relatively unaware of is will there be a doctor to choose from. we went for a period of almost 40 years in this country where

we did not expand our medical school capacity at all. even as our population was growing. most of you know what we did, we started importing internationally trained physicians to fill our gas, especially in rural and underserved areas. that is now coming home to roost for us and it is a problem. i am not sure what the right number is, but we've had a very hard time in our own workforce studies finding a projection that doesn't show's facing doctors shortages in the hundred $250,000 range, doctor range by 2025. that is a lot of doctors and we don't have doctors freeze-dried on a shelf. it takes a minimum of seven years to fully train a physician. this is a problem that we have been very concerned about for several years. it is an even bigger problem in nursing. we're in the same time period the shortage is projected to be

as high as a quarter of a million nurses, and then you certainly detected that the most acute point in all this is primary care. fewer and fewer physicians want to go into a specialty that is undervalued and underreported. so as we say we want to shift from sick care to primary care and preventive medicine, we are not producing the people to do it. the most encouraging thing in the legislation so far it, as was in the presidents budget proposals is an attempt to reverse these trends. without going into detail, there are large set of programs, including the national health service corps, something with his urge to serve that i see in so many young doctors were that can be strengthened so we can put those doctors where many of those poor uninsured or underinsured patients are. that so-called title vii and title viii programs that not only help us expand numbers, but will help build primary care and

will help increase diversity in medicine. so these are embedded. they are not at the forefront of the debate, but in the end we can talk about policy all we want but if there is no doctor in the house, we have a problem. the last point i want to make is just circling back to something several have talked about. we have wrapped ourselves up in health insurance reform, where is the health care delivery reform? i am fundamentally very worried about the lack of discussion about how we transform the care model. in academic medical centers, teaching hospitals and medical school, you have typically physicians and doctors working together under a single umbrella, under the old fee for service problem doing lots of procedures. but as i talked with them, many of them lament the fact that we don't do a very good job of keeping populations well. a following patient, longitudinally over time.

they are really eager to move them to better care models. what they lack in many cases are the tools. medicare, for many years, has had a lot of demonstration authority, but they have been fairly limited projects, a certain kind of disorder here or certain payment model there. there is another piece of legislation beyond the major senate health and health bills that i encourage all to pay some attention to. it is a house bill h.r. 3134. and it is a very small bill that is an evolution as every bill is and it is to create health care innovation zones. h. i c. i think at his time in the course of the rest of this debate to do what we do in other areas of american enterprise to say we are going to identify zones where willing providers, doctors and hospitals, together with willing insurers, especially medicare and medicaid, can come together with other partners and really start to shift towards that care that

is based on outcomes and quality as opposed to simply generating volumes. of activity. it has a long way to go i think before it is embedded in the major legislation, but in conversations, the senate, cms, i think people know that we need care innovation as much or more than we need payment reform. and i sincerely hope that this is the place in which doctors, hospitals and patients can come together in a different way. thank you. [applause] >> good morning, and thank you, susan, and to health affairs reporting on this very important event. what i thought i might do is give it a little bit and talk some of the issues that were brought up early in the morning but really start with the facts. the facts on the american hospital association. so as we think about bending the cost curve, let me start with two commitments that we have

made on behalf of the nation's hospitals. the first is, as you have probably seen, in conversation with the white house and with the senate finance committee, we have committed to contributing to again, bending the cost curve and contributing $155 billion over 10 years. $155 billion over 10 years. that would come # over time, we have committed to accepting a lower payment increase rate. second, less money to care for the uninsured, disproportionate share hospital payments, payments that go to our nation's safety net hospitals to care for those who do not have the ability to pay. as coverage increases, payments

for those will be reduced and that would be another part of the savings. the third part is readmission. we know that there are instances when there are avoidable hospital readmission that cost medicare dollars, and we are committed to improving upon that. that is commitment no. 1. member to come in terms of $155 but i really would like to build on what gail did so eloquently this morning talk about another piece, which is outcomes. we have also made a commitment to ourselves and to the community, a pledge to implement a strategy, a campaign that we called hospitals in pursuit of excellence to improve quality and efficiency. so we are really committed to taking known best practices, the science that is out there, and accelerating and spreading those practices so we can eliminate these major areas.

just to start on those, we have identified eight topics for which we know, again, best practices exist, hospitals are working on and where mick and significant improvement that as the session talks about, iact of medicare beneficiaries in a very positive way. if you think about these areas, surgical, infections and competitions, centerline associated bloodstream infections, too bad bugs, mercer and sita, ventilator associated pneumonia, catheter associated urinary tract infections, adverse events from medication errors and reducing pressure ulcers, or bedsores. these are again issues that we are working on today, hospitals are making strides in improving. that we can accelerate broadband and deepen these even further and we are committed to working with all our hospitals to share best practices, and to report nationally our improvement. so actual measures on how we are doing in these areas.

in addition to those commitments, we have also committed that again, as a group working within the health care system, there are longer-term initiatives that we need to address. improving care coordination, again, positively impacting citizens in our country in terms of facilitating not just the discharge process but care across the continuum. implement health information technology that we all know well is so important, and so critical in terms of modern anything in the health system, preventing patient falls and improving perinatal care. these are the issues where scientists are still evolving, measures are still developing but we feel a commitment that these will not only improve quality but obviously improve efficiency as well. also as just was talked about, we are strongly encouraged by the need to efficiently design, test, and learn new ways of delivery and payments. we cannot underscore that. and so we strongly support

voluntary demonstration projects that are encompassed in today's very is bills, to think about how we may really test and learn new models. so bundled payments. bundling payments together from different providers into one lump sum payment that could go to a provider core set of providers, and then it was up to them to decide how to deliver the most effective care for a population based on one payment. that is a model that is worth testing. we are not there yet. we need to learn about it, but we strongly encourage that. accountable care organizations, which have seen some bills which again is organizations that will be accountable for a set of patients who are geisha or a population that will deliver a range of services to provide the best effective care for them. we need to test how accountable care organizations may work in tomorrow's delivery system. so again, committed both

financially, committed in terms of quality and improvement in efficiency and committed to learning and testing new models of delivery and payment that will further our country. i think the impact cannot be underscored. as we view these impacts, beneficiaries will stand to benefit. improved quality today means fewer infections, means avoiding unnecessary readmissions. we certainly know there are plans readmissions. we know there are readmissions that are not related to the initial reason you may have first gone into the hospital, but he said bobby's a there are other areas we need to work on. impact on health care cannot be underscored that we are talking about making the health care system more efficient, the entire health care system, which benefits beneficiaries as well as providers as well as purchasers and payers of health care. and it as susan has said quite well this is about reducing the rate of the cost growth. so this is very critical in

terms of where our nation goes in terms of the financial organization of our health care system, reducing the rate. these issues, again, the american hospital association is committed to working on comprehensive meaningful reform. we recognize the need for slowing the cost growth and we recognize that it is going to take all of us working together to make that happen and it is a quality and an efficiency issue. thank you. [applause] >> thank you, again to all three of you. we will open up the session as well to questions from the audience. and as we are waiting, let me just ask one quick one because i want to make sure we all are on the same page as we emerge from what we have just heard. in essence, what we heard from you, gene, is not withstanding any discussion about class untrimmed cuss or slashing medicare, what is being talked about in terms of medicare

savings quote unquote out of health care reform bills, something in the neighborhood of 400 billion, $500 billion over a 10 year period. really is kind of chump change, you are saying. you ain't seen nothing yet, given the rate of growth in medicare and what the nation will have to eventually do. and in terms of thinking about winners or losers, you said obviously there will be some losers. but we really have an area of ambiguity around the whole notion of what will happen to beneficiaries out of all of this. you said hospitals are committed to providing better care for beneficiaries at the end of the road that will actually cost less, subjected to fewer infections, falls and hospitals, everything else. so theoretically, somethings could actually get better for beneficiaries out of all of this. on the other hand, i have concerns about how much doctors are going to be paid, who knows whether beneficiaries are going to have access to doctors, transeventy music. and there also seems to be some

discussion so much on this panel but there has been a lot of discussion about medicare advantage plans in particular. and that people enrolled in those and that they may lose benefits. so is there a clear bottom line from all of this of what the impact will be on beneficiaries out of the medicare changes related to health care reform, or not? gene. >> again, remember we're talking about being a cost growth curve. we're talking about was the rate of increase and the benefits of people are going to get. so next year people are going to medicare than they had last year and the following year they will have better care than they have next year. so the question is if you however put less money into a system, then you would have a system that is basically open which the amount can be almost unlimited, does that mean that there is an impact? simple accounting says there is less money means that the price of something has to go down, or the quantity of what is provided is going to go down.

i think fortunately, maybe i should say unfortunately there is enough waste in the system and in that practice there are probably a lot of things that will not impact on people. but if there is a consequent of reform, maybe that is making $300,000 a year doesn't get much of an increase, salary increase in the next few years, or maybe when he or she becomes more efficient in providing me surgeries, we ratchet down the price of knee surgeries at a much asked to rate his income doesn't go up. maybe fewer people do need the surgery and maybe the best and brightest by not going to need surgery, they might go on to education. and so there will be shifts so you can't guarantee when there is less money in a system that somebody somewhere is not going to benefit concert there will not be less money available in a system that provides more. but as i say, it is a little bit silly in the context of health care reform because we know medicare is unsustainable and all of us on this panel are talking about ways we're trying to get at this, by billing

payments, for instance, accountable care organizations does they will provide a little less growth in these systems can we do in the most efficient way. so that is the question. there will be somebody who gets less care somewhere and there will be some people in the system, some drug manufacturer, some doctors, some nurses, maybe people who are very worthy who might get less payments in this system because there would be less money than otherwise. >> darrell? >> we have to spend less. if we don't, we are translating this problem to our children and grandchildren. given that we have to spend less, if that's all we do, if we simply put the brakes on, reimbursement, there will be holes that began to appear in the care for beneficiaries. but we are not in the dark here. gail made a very important reference earlier. she talked about -- she

mentioned three systems that are frequently cited because they are low-cost, high quality, high patient satisfaction. she mentioned the mayo clinic. and having visited those and talk with their leaders they have very clear ideas about how to bring cost out of the system while preserving quality. the problem is they are in relatively simple environments. poverty rates are low, incomes are high. we need to take what they know and empower more people in america to scale it up and apply it to tougher environments. if we do that, we really can. i mean, bidding the curb is an empty policy phrase and let you talk about what a care delivery system looks like. we actually can see those kinds of systems out there. we now need to translate them to the rest of the country. it will not happen by flipping a switch. is going to take really, gail

used the phrase was, supercharge demonstrations involving lots of willing parties to do this. >> we all have a shared responsibility in bending the cost curve. so that is clear and we have to address it. if it is just payment cuts, then there is a risk. absolutely a risk in service of. shortly hospitals will not cover my squally by any sense but there is a risk. it must be met with copies of reform, and the innovations supercharge demonstration projects have to be part of it in terms of the overall picture of reform. so yes, if they are part of it, we can do better in terms of cost and quality. >> let's take some questions now from the audience. do we have one right here? we have one right down here in the front. >> good morning. i am judy paris. i am a clinical social worker and a consultant in long term care. since this is the medicare section, i had a question. i was part of a negotiated

rulemaking committee in the late '90s on provider sponsors organizations. and a number of the panel members, dr. kirch and others talk about the need of system reform, giving doctors and providers together. and i left that issue long ago. i am just wondering, i think it is still in statute and i am wondering how that would fit into your thoughts, if you know of it, and if there is anybody who haven't tried them in terms of system reform and pulling the comprehensive pieces together. >> we have a toolbox in the united states that is brimming over with a very solid concepts, things like accountable care organizations, provider responder organizations, medical homes is another one we are all hearing a lot about. but my observation is that we are suffering from concepts in search of people to implement them. and right now what i think we need to do is use the

considerable power of the federal government in the case of medicaid state governments to empower the increasing number of people who are willing to implement them. the number of places where they know it's about interdisciplinary team-based care. it's knowing about having every provider, regardless of discipline, practicing at the top of their license as opposed to some optimizing each of the. there are so many people i've encountered around the country who would like to pull the pieces together, use the tools. the tools are there appeared the authority is there. i think we need to use the opportunity of the legislation to really inject it with some energy. >> did you want to add something? let's take another question. we got a couple here and then we'll go over on this side. >> i am from the american college of teratology right next-door. i've been practicing in the academic center for the last 25 you're so i'm really glad to hear a little bit about the academics and what is going on with the work force.

question, and also just excited to hear about mentioning quality. and like we have a lot of quality tools that we would like to see implement it. i was wondering though about the use of registries@@@@@@@ @ @ @ we are getting the quality we want from those changes, how are we knowing that we are putting the quality and proves is that one of the tools we should be considering? >> registries are just one aspect of applying this incredible power of intermission technology to health care in a way we failed to. everyone in this room must marvel at how many of us go see a new physician and what you get is a clip board with the piece of paper on at and you have to reinvent yourself with each visit and each new doctor, because there is not the platform we need. >> for people who might think

that registries are things you sign up for when you get married, why don't you clarify what registries are. >> there are various forms of registries. there are ways ostoring information from populations of patients of patients, perhaps population of patients with the same disease or sing the same kind of treatment to learn from them, to learn what works and what doesn't work and what is most cost-effective. >> so it is a way of tracking. what is done to patients, what happens to them over time and then try to figure out how to learn from that to improve care going forward. >> more than tracking. it is the learning, but you need information to learn from. >> gene. >> if i can add maybe just a disheartened know, i worked for four years with the national committee on vital health statistics which in recent years has devoted a amount of time to trying to implement electronic health records taken with regard to this question, the previous one, it is quite clear that improved information systems themselves do not necessarily

been to the cost per. they offered the opportunity for more efficient systems, but in truth if you have no budget constraint the incentive to take advantage of these information systems is pretty small. in fact, i often appear before doctors and often shocked them by the state about half of all doctors are below median. at which point they said that for a while and think about and finally realize that's going to remain true under any information system. and the only information systems can really have the pressure to do something is when there is a budget constraint. gm did not improve or try to make more efficient many of its cars until its budget constraint forced them to do it. this is true of every industry, true of every discipline and it is true in the hospital sector. one hospital can make a lot more profits by increasing volumes and we provide all these great information systems, but the hospital that is more concerned about volume increases than it is concerned about quality of care continues to make money and drives the other one out of business. it is going to have an effect.

so you have got to somehow or another, you've got to match all these efforts, electronic health records, provider groups, registries, you have got to have them within some sort of a budget constraint where there are incentives for people to do the more efficient higher quality thing at a lower cost. and it may include in the case of radiologists whether there are some alternative providers with a slightly less gail might be able to do the same amount of work for slightly less these. those types of issues -- there has to be an incident to make those types of changes. >> i think we had another question here and then let's go over to the side. >> former dod in congress. there is a question that i would ask you gail as well, but let me make two assumptions. one, that we ought really are trying to build a healthier country. and a second, it is 2019.

a question for you all is comparing the current track run versus some sense of where health care reform may take us, how are we doing in 2191 versus the other on status, quality, affordability, and access? >> in 10 or 15 seconds, if you would. maulik. >> we don't have a choice that we will be better. we just don't have the choice we have to commit to it and we have to move forward on it. it might not happen in three years. it is going to take some time but it will happen. >> darrell? >> i think those things will change at different rates. the one thing that won't change sadly overnight is the problems with health status in the united states. the obesity, diabetes spectrum problem of problems didn't appear overnight and we're not going to reverse them overnight. so i think you're going to have to be patient that while we can redesign systems, reimburse rationally, it is going to be a

slow turn for us in improving the overall health of the american people. >> i don't know the final answer to your question but i would say we are on our current after our book basically, our economy is in the threat of blowing up and health care could end up taking hits that will not be intimated very efficient or very done very well at all. and i think come i don't think it is just a matter of waiting a few years. i think actually in the next few years we will seek enormous pressures on health care, if not to wait for some of these improvements that we want to take place, but to make other changes that are a bit more drastic. and that will mean i think quickly changing the payment system to reward quality, to reward of volume last, to allow for alternative providers, to do all of those things that i think they do enhance our probability, enhance our chances of leading quality increase at the right rate. out the mystic side says we have always grown as an economy and we've always gone as a people because we're always able to stand on the shoulders of the

giant who were there before us. as long as we can take past knowledge and build upon it i am fairly optimistic about the future. >> all right. we had a question over at the rear. >> judy, new york city health and hospital corporation, safety net hospital, largest the book hospital system in the country. no one is more committed to health care reform than the safety net hospital. we served last year for hundred 50000 people with no insurance. by the disproportionate share hospital payments, or dish payments, are about a lot more than just the uninsured here they are also because medicaid under pays. and so in new york, for example, they have been paying about $0.35 on the dollar for outpatient dedicate this at. they are improving that, but they are cutting inpatient so one of the questions i have, and safety net hospitals should not be destabilized. they are needed now more than ever. and so what are my questions to

the aha representative here is how will you accommodate that medicaid underpay when that will continue since the states have such drastic deficit while you are cutting dish payment? thanks. >> dish payments go away. i think that is a prick of these because exactly what you mentioned on the safety net hospital stabilizing still continue to be uninsured and other issues so it does not go away. it does get reduced as coverage gets increased. so there is a direct linkage, and as coverage is increased for a while but it cannot go away by any means and we have to seek again to protect safety net hospitals. >> any of the rest of you want to comment on that? okay. let's see, did we have one more question. let's take one back there.

>> again, david. the atlantic monthly published an essay by david this month i don't know if you're familiar with it, drawing a lot of discussion about health care, how american health care killed my father. has any of you, of the panelists read it? he makes two interesting point. one of course is hospital required infections which was the cause of his father's death. if you combine that with medical errors, that is now the third leading cause of death in america queered a really bad job on transparency reporting errors. i would be interested knowing what their position is any other point for gene is the article, the authors cite that the problem is through medicare being as you suggest, the market maker i think is another phrase for your comment, medicare has done a bad job of basically subsidizing to many hospitals keeping the acute care system in place and not evolving the system as we know to more sort of aging in place, more

decentralized care delivery. >> the first question on hospitals and hospital acquired infections and so on. >> i think in terms of the 10 year anniversary, we clearly have a ways to go, but there has been significant substantial progress in the last 10 years. incredible progress by hospitals and every health care provider in terms of patient safety. in terms of the infections, that is why we specifically focused on these issues. we know it doesn't happen overnight but we are committed to making that work. and the only way to make it work is to really promote best practices, learn from each other, and transparency is a part of it. aha has always promoted transparency on meaningful relevant indoors measures. and more and more organizations and national and state bodies are following that. >> in terms of medicare, i don't think any panel would disagree with the comment you made or reflecting in what was in the article. i should say that a lot of the bad incentives and medicare does

reflect a bad incentives that are reflected throughout the insurance system in which we have a volume. and there was some incident where you and i go to the doctor to that is just a system that is not sustainable. i should say that one of the more interesting aspects of the health reform debate, given that this is an evolving system and given that we never know all the answers, is this an attempt to empower medicare, or hhs or some alternative body, to have much greater power to epaulet suggestions that they make overtime, suggestions they make not only for larger experiments, suggestions they make for perhaps not just lowering our changing the rate of growth in payments but actually ratcheting down payments in certain areas, where technological improvement allows services to be done at a much faster rate. suggestions where they really think we can improve the quality of care. i am not saying those will answer all the questions were certainly that they would end

the fact that half of all doctors will provide below median surgery i don't think that will stop. but we can provide better information systems. we can provide better incentives to actually try to improve upon the record that you signed. >> darrell? >> i have not seen the article but i always become concerned about the focus on medical errors, poor quality in the abstract. i was responsible for hospitals and medical nursing staffs and nobody felt the failure more acutely in the face of medical errors than those professionals. it isn't that we have uncaring people in the system. is the design of the system itself, and it actually goes back to the reimbursement methodology. if everything is paid in pieces, then each activity becomes a standalone piece and there is a scene between the activity.

one consultant doesn't speak to another. the primary care doctor doesn't get the information they need. it is those scenes that have to be close and to close them we have to change the way we pay and we have to change the way we actually designed them and deliver care. >> we are going to bring this tale to a close here shortly. i do want to mention that if there are those who are interested in receiving more information, particularly from gene's perspective, you can e-mail him at stirling. take a look at the health care website. as well as the websites of the american hospital association and those are respectably aha.org and a amc.org, for additional information about what we have spoken about this morning. i just want to wrap a. i don't know if all of you are lucky enough to have your parent

still surviving, but let's say for a moment that you are. but they are busy, retired people. they have a few minutes to listen to you while they dash off to play golf or whatever it is that they do. so you have got about a 30 seconds with image are going to sit down and explain to them. mom and dad, here's what i want you to know about medicare and health care reform. you have 30 seconds each. gene. >> first, i would come into them that my daughter is a pediatrician who works actually at one of these systems and tries to be accountable care, comes close which is kaiser in northern california. she gets paid a lot less than a lot of other people in the system. she loves her work. i would say we need to actually fund many more people like her and provide more payments to those people who are providing preventive care, who are focusing on cures rather than just chronic care. and i would say to them that as a current member of the elderly,

you're probably not going to be affected very much by this health reform. and that, even the medicare reforms are going to come along will probably not affect you and your as much as they are your children and grandchildren. so help us think together about how we want the health care system to evolve over time. how we want government over time. what we want to live in the way of health care for the elderly versus the uninsured versus the young. and i think they would very much engaged that conversation. >> darrell, your folks are even busier than gene's. they have 25 seconds to listen to you. [laughter] >> using the two medical school because you believe it was a noble profession. doctors and the nurses and the other professionals are not going to abandon that if they are not going to abandon you but we need to fix this system, or the two granddaughters you love are going to be in real trouble. >> maulik? >> will have a stake in this. it is important to all of us, and to all our kids. and to get there we need to

address efficiency and we need to address quality, and it will take time. it will not be pretty but it will happen in the next decade. >> arai. on that note we are going to take a 15 minute coffee break. let me urge you, please, to come back for our final set of discussions today, which are on very critical end-of-life issues, and why it might or might not be important to address them in health reform. to a proposal that has surfaced in the house bill, h.r. 3200, to pay practitioners under medicare to conduct advanced planning consultations with patients. we have three terrific mandalas to discuss that issue. will also have an extended q&a session at the end of

. . and we have left f our last session today one of the topics that has obviously become very, very emotionally fraught on th town hall and other electoral -- i guess it's not literally electoral but i guess everything in the end is the electoral trail, which is the issue of end of life. for all of us, we know we all

have a 100% probability of death. it's something we prefer not to think about. however, most of us have had to think about it just in the last year alone. personally, i've lost several elderly relatives. i know that we all think about our parents. we think about ourselves. we think about our children. we know we're going to get there sometime and so it's an issue very close at hand. therefore, understandable that it is so fraught with emotion and with often lack of reason. this protester probably kind of a fake protester holding up a sign at one of the recent forums -- it's hard to see. one protester is saying no to healthcare reform. but the other fake protester, i think, is saying, oh, i'm sorry. we thought reading the bill was your job. and your is spelled u-r.

the standpoint being made is it is very difficult to read through legislative language and understand what is meant by it. and this particular provision in h.r. 3200 section 1233 advanced care planning consultation, obviously, has caused a lot of difficulty for people. it is a very tediously long section, as you see here. and this is just a tiny fraction of it. i didn't load the whole thing up onto slides today; otherwise, it would be a 20-minute presentation in its own right but as you see, it kind of goes on and on and on. and it's understandable that not everybody could read it or has read it or understands what it is. but that's the point of our panel discussion here today. it's to put all of this in context. and particularly, to put it in context of the end-of-life issues that we see every day in the u.s. healthcare system and that many of us will experience in our personal lives.

as we know on the campaign trail, this provision for advanced planning consultations that would be paid for under medicare has caused a lot of difficulty. again, i'm just going to mention one news story which is an abc news piece that kate snowe did on this back a week or so ago and pointed at a healthcare town hall with obama, president obama, hosted by the arp a man said, this is being read -- this being section 1233 is being read as saying every five years you'll be told how you can must die. i don't have to mention all the other people you know who have evoked this language and worse in describing what is in this provision. and because there is so much emotion, we thought it was especially useful to have these is next three particular individuals speak about this from their perspectives.

so i'd like to introduce now, first of all, christine castle who's an m.d. who's president of the american board of internal medicine with a lot of end of life care experience and knowledge under her belt as you will hear momentarily. she will be followed by dan meier, m.d. who's the head of center of care at the mt. sinai school of medicine, a very noted expert from way, way back. they have written about almost every aspect of end of life care from physician-assisted suicide to euthanasia to pallatative care and they know there are people doing literature searches on them right now to see what they have put their names on in the past as has been the case with so many people over this period who have written and thought deeply about these issues and are now being accused of holding all kinds of beliefs.

you know, that's not what it is all about. what it is all about is really trying to put into perspective how one goes through in america the last stages of serious illness and how one does or does not prepare for them. how one's family does or does not prepare for them and what happens to you if you don't prepare for them and you end up perhaps in a situation that you possibly would have wanted to avoid. that's what they're going to talk about, notwithstanding, everything else that they've written or talked about in the past. and then we're also going to have -- and this gentleman holds a very special place in our hearts at health affairs, jerald winakur from san antonio. the reason why he's so dear to the hearts of healthy affairs he was the author of an extremely important narrative matters piece. it's the section of our journal where we ask people to give

first-person accounts of encounters with healthcare and with the healthcare system that have a policy point to them. we call them policy narratives but that's a dull phrase compared to what they are. they really are first-person accounts of the joys, the pain, the suffering, the complexity of being a patient or being somebody working with a patient in america. and jerry's piece of 2005 on the aging of his father and the dissent into dementia of his father and his own work as a doctor watching his father what do we do with dad is the piece was named is one of the memorable pieces we've ever published. so with this -- with these three individuals, spectacularly situated to discuss thesew! issues, let's turn first to the first of them chris cassel.

>> thank you, susan, and thank you -- let me add my thanks to you and to health affairs for pulling together this important conference and helping to restore, i think, both civility and important substantive content to this important national discussion about healthcare reform. and my -- so my topic is to talk about the data that -- and very quickly i'm going to do this 'cause there's a huge amount of research that is now available to us about what patients want, what families experience as people have advanced in progressive illness. but before i do that, i want to point out that you're going to be hearing not only from me but from two other physicians who actually have the knowledge and skills to care for people with

advanced andu complex illness. that is to say geriatricians and given that all three of us are board certified geriatricians that it's probably about -- you know, a tenth of the nation's supply of geriatricians -- [laughter] >> are here today and so maybe we should actually be going out and taking care of patients. it would be better. that is an even more of an endangered species than primary care in the united states for all the same reasons. it's very difficult to do. very challenging and undervalued and underrewarded and needs better systems of car. -- care. it's also important to recognize that taking care of patients who as susan mentioned are going to die, as all of us are going to die, usually means you don't know which patients are going to die and you take care of people because you want their care to be personalized to what they want, to what their values are and to improving their quality

of life for every day that they have left, every week, every month, however long that might be. so it's kind of a fiction to think we can set up policies that look just at end of life care as if it's a definable and predictable slice of when a patient gets to that point. and so what we really need is a healthcare system and providers who have the skills to be able to work with patients over the course of that process. so we're talking about patient-centered care here, really. and so we really have a good deal of knowledge about what patients with serious illness want. now, mind you, it is a diverse country and people want different things and one of the most important skills that the providers, particularly, the physicians need is to be able to have those conversations with patients about their values, with their families or without, at their choice or if they are

unable to speak for themselves, having known them over the course of their life so that they can have told you before they became incapacitated what it is that they would want for themselves. so it's -- a lot of is about communication and about relationship-building. but if you look at surveys like this one, people want pain and symptom control. they want to avoid a painful prolongation of the dying process and actually the vast majority of people will tell you this is what they want. they want a sense of control and dignity. so that word "control" is very important. the control has to be with the patient. they are concerned about burdens on the family, both emotional burdens and financial burdens. and they want help with that. they want help with understanding how to reduce those burdens. and they want to strengthen relationships with loved ones. you know, we often talk about

the beginning of life, birth at a time when there's great meaning to the significance of giving birth to a child and a new life. well, the end of life is just as profound and potentially just as meaningful. and, unfortunately, in our healthcare system, we haven't given it the kind of prominence and the kind of spiritual and otherwise emotional significance that the patients are telling us they want. and indeed there's a lot of data that they're not getting what they want. suffering in united states hospitals has been well documented. and this is in more than one national data set. this is one of the first ones that was also supported by the robert wood johnson foundation that really put this information really in front of the nation's medical community in a very important way. this was a huge study across many different hospitals with people with many different

conditions. 50% of whom only lived for six months after they entered into the study. so this is a very sick population as i said earlier that they -- you can't always predict, but it's a way of defining people who have very advanced illness. half of these patients had moderate to severe pain more than half of the time during their last three days of life. so that is clearly unacceptable. that is not what patients want. 38%, almost 40% of those who died spent more than ten days at the end of life in an intensive care unit unconscious and on a ventilator. again, if you talk to most people, they will tell you that is not what they would have wanted. and while it's not on this slide, the same study pointed out that one-third of the families of these patients lost most or all of their savings in

that last)illness. this is not medicare dollars. this is not health plan dollars. this is their personal family savings. so when you talk to family members -- now, you know, when patients die, of course, we try to ask people as they're going through these illnesses what they want and what the experience is like for them and how can we improve it. but part of what matters in the way we care for patients at the end of life is the memories that are left behind. and the way to find that out is to ask the families. so family members tell us this is what they want. they want their loved one's wishes to be honored. they want to be included in the decision process. they want -- and those are the two things, by the way, that the legislation that susan put up there addresses. a way of getting -- the patient to tell the doctor that information. the rest of this is what good

pallative care honest information. i cannot tell you how many times and in how many studies in patients interactions where people just said, would somebody just tell me what to expect? how to prepare for it? how to cope with it? we need 24/7 access because when a question comes up, it is not always 9-5 monday-friday. the patients families would like to be remembered and contacted. again, what the families get is not enough of any of this. not enough contact with the physician. they do not get enough contact with the doctor or enough

emotional support. not enough information about what to expect in the dying process. so we think we're uncomfortable -- that patients don't want to hear this. the patients are telling us and the families are telling us they want their questions answered. and by and large in our medical institutions and our training we don't teach how to convey this kind of information in a caring and supportive way. and then not enough help with pain, 20%, 1 out of 5 families said this. and, in fact, while i emphasize that this isn't only about money, it is important and actually interesting to look at how the costs break down, the spending of how we spend on end of life care. and so if you look at this pie chart, this is the last two years of life. and mind you what i said before. that this is only in retrospect these people died. these are people with very advanced illness. how did they -- their cost

guessguescosts of care lined up at the end. and i think you'll hear from dr. meier is a very important place. as much as we try to get people at home. people want to be in hospice or at home, it's not always possible. so hospitals have to actually provide a lot of pallative care and they have to be able to shift gears and have the skills and the capabilities to do this. you can also see -- well, the other point i want to make about this is that it isn't -- it could be 54.7% is exactly the right amount of money. we don't know how much is the right amount. what we do know for sure is that we're not spending it on the right things. so we have two kinds of issues here is how much money we spend and what is it that we're getting? what kind of value for that money? well, one thing we know, though,

from many, many studies is that more is not necessarily better. so you can draw some inferences from this. and this is another study showing association between cost and quality of death. so the quality of life for the people who were dying during this final week of their life and graphed along the horizontal axis here per capita cost. how much was spent on them during that final week of life, and you can see that the people who actually had less money spent on them actually had a higher quality of life during that last week. so there's a lot hidden in that data that we need to understand better. and we need to work with. but at least i think it's pretty fair to say that spending more money is not the same as getting better care or getting better quality of care. so the last point i want to make

is about advanced directives because that's what was in the legislation and that's what gave rise to this really unfortunate mischaracterization that somebody else is going to make decisions for you. in fact, advanced directives are about exactly the opposite of that. advanced directives are about you making your own decisions and the people who take care of you being able to know about what those are because think about what happens if you're ill at home, the ambulance comes, you may go to a hospital emergency room. your doctor might not be available. you're in a nursing home. you might go to a hospital where the doctor doesn't have privileges there. so there has to be a stable document, a stable way of having this information come across wherever the patient is. so that information can be transmitted.

so i went to the definitive medical information source, wikipedia, for this definition. [laughter] >> actually, you know, as we looked around for definitions, this was the best one that came up so i guess wisdom of crowds really does work sometimes. so i won't read through this entirely but i do want to make a couple of points on it. first of all, that these are decisions that are put in writing for the event that you might be incapacitated so you couldn't speak for yourself. if you have an advanced directive and you're not incapacitated. at any moment you can change your mind and speak for yourself. people will not need the advanced directive if you're mentally conscious and competent. it's for those situations where you're not that the advanced directives are so important. the other thing is that advanced directives can be something like a living will where you say under what circumstances you might want more aggressive or less aggressive life-sustaining

treatment. but it also can be used for what's called a power of attorney or healthcare proxy where you assign decision-making to someone you trust. and often people are more comfortable doing that because it's hard to think about what might lie ahead. and so as you think about advanced directives, it's not that you have to imagine every possible circumstance that might occur. but you can make a decision about who you would like to be making these decisions on your behalf in the event that you're not able to make them for yourself. advanced directives are a way to empower patients, not to turn these decisions over to doctors, to hospitals, to insurance companies, or to the government. now, the last couple of slides here are just to point out is that when people have those discussions with doctors and get their questions answered, that, in fact, they are more likely to

choose less aggressive care. and that's actually bourne out in the work on shared decision-making, not in the pallative-care arena but in the elective care. but in the decision, not always they will choose the less costly and less aggressive and frankly less risky course of action. not everyone and that's why these are individualized decisions. but i think there's pretty good evidence that patients know how to use information and they want more information. so in conclusion, a summary of what at least the tricommittee bill has which is the one that i think has gotten the most attention. it provides medicare coverage for voluntary advanced care planning consultations, at least every five years. and the every five-year provision is just so that the doctor can get paid for having

this conversation with you, which right now is not the case. we've heard about this unfortunate fee for service volume-driven healthcare system we have. well, the volume of conversations with the patients does not get the doctor more money. that's the one thing that doesn't. so all this provision does is say that medicare every five years would pay for you to have that conversation with the patient if the patient wants it. it also requires quality measures which are getting more sophisticated all the time to be taken advantage wherever possible an end of life care and particularly advanced care planning. and that some of the medicare pay for reporting plans be linked up with that kind of performance data. now, the other -- the last point i want to make is that there were a number of us who were in conversations with the hill's staff during these -- the drafting of some of this and

urging that they include actually what might even be more important than advanced directive provisions, and that is to say, education, work force issues. we do not have a medical or a nursing work force who is very skilled in this arena. so we really need to find ways to create both training programs and incentives for more young physicians and people that darrell is talking about to go into this work and then, of course, increased emphasis on evaluating different approaches to quality of care and research. thank you very much. [applause] [inaudible conversations]

>> thank you, chris. thank you, susan. thank you, health affairs, for organizing this event. and i'm very appreciative and grateful to be here. and i have the opportunity to put some flesh and bones on pretty much everything you have heard so far today. and i decided to speak to you about two of my patients so this is a tale of two patients. one of whom i think suffered because of the way the current system incentives are set up and the other of whom i hope you will agree got what i would consider to be optimal care during her chronic and then ultimately terminal illness. and i hope as i tell you about these patients, you will think about what are the lessons to be drawn from their experiences and how they relate to the discussions about the health reform that's on the table now. so the first patient is mrs. g. who was an 82-year-old nursing

home resident with moderate dementia and recurrent pneumonias. she had what i would consider to be business as usual in the american healthcare system. multiple hospital admissions. she had four hospital admissions to my hospital. her nursing home is down the street from mt. sinai and we see multiple revolving-door options from that nursing home. in her case she kept aspirating and kept developing pneumonia. she had dementia for 10 years prior to her hospital stays. whoever her primary care doc if she had one 10 years before never discussed her wishes for care in case of future loss of capacity so there was no healthcare proxy. there was no living will. there was no evidence of any type, verbal or written, of her wishes. on this day i'm going to tell

you. she had six weeks of intensive care unit she had predictable diseases. a tremendous amount of pain associated with development of a pressure, severe pressure ulcer during that six-week icu stay. and a devastated adult son who was both very angry about what was happening to his mother and very guilty that he was unable to stop it. or prevent it. and this is not mrs. g. this is another patient who did give me permission to document her care, but this is the situation mrs. g. was in. and she also was restrained. you notice the hand restraints on this patient in the icu and the reason the restraints were here because people were afraid to use too much sedation because of the underlying dementia so rather than sedate her to keep her from pulling out her tubes, they tied her hands. so just imagine what that is like.

she as i said had a six-week stay in the icu. she had a different attending physician every two weeks. we rotate on and off so almost no continuity of care. she left the icu during week 7 of her hospital stay to go to a regular floor. the hospitalist documented in his note that he asked the son if he wanted us to do everything for his mother. and that was the question, do you want us to do everything you want for his mother and, of course, the son said, yes, what family would ever answer that question no. so it's the wrong question, obviously. but as a result, this patient continued to receive all aggressive, life-prolonging treatments that we know how to give and that included very difficult twice-daily dressing changes for her ulcers which were very deep down to bone and muscle and painful and her reaction to these dressing changes was to lash out and try

to strike away the people who were trying to care of her because it was very painful and to scream essentially. and then in between dressing changes she was curled up in a ball facing the wall and did not respond -- seem to recognize or smile when her son visited, which was causing him tremendous distress. after the nurses had had enough of what they described to me over the phone as torturing this patient they called for a pallative medical consultant. day 63. we sat down with the son that afternoon and this was a 90-minute meeting with the son and his two sons. the son was in his 60s and his two sons were in their 30s, so three generations. and we asked the son a different question. we asked him what he was hoping we could accomplish for his mother. and note the tone difference between do you want us to do everything for your mother versus what are you hoping we can accomplish for your mother?

and he just erupted with anger and upset. isn't@@@@@@ every time i come in she is moaning, screaming, she cannot let the nurses anywhere near her. she is afraid of everybody. you may ask, why wasn't anybody treating the pain before that? there is not much, and there is little work force incentive for people to enter the care where people are trained in the management of pain. there is a myth out there that you did not give opiates to people with dementia because it will make them more confused. the literature shows that the pain is one of the strongest predictors of confusion. people who have uncontrolled pain are delirious and agitated. people whose pain is controlled has a much your risk of agitation. doctors are not trained in it.

thing. we gave her a tiny dose of morphine, 5 milligrams below her tongue in between her dressings. she was relaxed. she started recognizing her son. she would smile and squeeze his hand when he came in. and four days later went back to her nursing home. this time with hospice at the nursing home to make sure that she got good pain management during dressing changes to make sure the nursing home staff, which as you know were grossly understaffed for people this complicated were getting support from hospice expertise. she lived another four months probably because her symptoms and her wounds were being properly cared for and because there was more support for the staff. the son actually wrote a letter to our ceo thanking him for the quality of care our hospital provided, you know, go figure. and which he forwarded to me.

the cost of her care just in that last hospital stay was well over a quarter million dollars. that does not include what occurred in the prior three hospitalizations that year. so the cost over a quarter million -- the suffering incalculable both for the patient and her son and this is the nightmare that everyone fears and this is business as usual in the american healthcare system. think about the incentives, okay? the incentive for the nursing home is to refer to the hospital. taking care of such a sick complicated patient in the nursing home -- they can't afford it. they don't have the staff to do this. the incentive for the hospital is to have more hospitalizations 'cause we get paid for every stay. right? so the system is perfectly designed to get this result for this patient. patient number two, judy f. 65-year-old with metastatic lung cancer seeking guidance on what to do. she was diagnosed at age 59 with

nonsmall cell lung cancer, no prior history of smoking. given her prognosis, when she was diagnosed of 6 to 12 months. well, you know, so maybe on average people with this disease live 6 to 12 months, so much for averages. if you followed what people are talking about that we're wasting money at the end of life this might have been a patient who wouldn't have gotten any treatment because on average she's at the end of life. so why are we wasting people on the end of life. she got appropriate treatment and show lived six years after diagnosis. with the care of a superb oncologist at nyu. she sought me out at about 14 months before death because she was starting to have progression of illness, pain, fatigue, difficulty concentrating, insomnia and it was very clear to her that her oncologist was not capable of discussing what

the future was going to hold. he's a great oncologist, really good at cancer care, not good at these bigger questions of meaning and purpose and what is it going to be like when this treatment no longer works? for about 14 months she received simultaneous care from me and pallative medicine from her oncologist and lived a reasonably high quality of life and it wasn't until the last three weeks of her life that the tumor was progressing and she decided to stop the chemo. she was no longer able to go out. that's when we called hospice only in the last three weeks of her life. she remained at home in the care of her husband and her daughter, sarah, and died peacefully at home surrounded by family. so that's judy. at the time of diagnosis. a remarkable human being. i wish i could tell you more about her, psychotherapist. she was in three different

reading groups. she was about the best read person i ever had the pleasure to take care of. we talked a lot about books. that's her daughter sarah. that's her husband, george. this is one of the trips they took to italy while she was undergoing treatment for lung cancer. quality of life was the most important thing to her, and you can see she achieved it. now, this is a cartoon from the new yorker of a doctor saying to a patient, there's no easy way i can tell you this so i'm sending you to someone i can. [laughter] >> so her oncologist, as i said -- i have enormous respect for him. he's a great doctor. and he did give her six good quality years with what ordinarily would have killed her much earlier. but he is really, a, not trained and, b, not comfortable, and, c, does not have time to have long conversations about what the future holds, what the pros and cons of different treatment options are and how to help judy come up with a plan based on the

facts, plus, her preferences. those of in pallative thinks he's a really great doctor. why? he does not ignore the issue. he sends her to someone who can help her with it. me in this case or another pallative medicine doctor or a geriatrician. and, in fact, what judy got is what i call the conceptual shift for pallative care where patients receive both life-prolonging treatment and pallative care. throughout the course of a serious advanced illness until the point that life prolonging care is no longer beneficial at which point they are referred to hospice. and that's another reason why i have so many concerns about throwing this term end of life around. we didn't know when judy was at the end of life till the last three weeks of her life. and even then didn't know how long she would have. if we had made her wait to receive pallative care till it was obvious she was at the end

of life, her last 14 months would have been a misery. so this is judy during that three-week period at home. where she -- they moved the bed into the living room because it was the brightest, sunniest room and sarah and george taking care of her at home. so what are the implications from these two stories. first of all, we need to match the care to the patient's needs. we do not know as chris said who is at the end of life until weeks to days before death. we cannot save money by, you know, cutting off care for a population of patients identified as the end of life because we only know that in retrospect. so policymakers who are saying, oh, we're wasting all this money at the end of life, i want to say back to them, well, if you, policymaker, were diagnosed with metastatic small cell lung cancer should we label you at the end of life and say, sorry, no chemo for you, buddy.

you're at the end of life. we'll save money on it. of course you wouldn't want. you would want every effort to prolong life with as good a adequately of life as possible. that is not the solution. needs-based treatment is the solution. advanced care planning for both mrs. g., who didn't have it, 12 years before that terrible hospital stay. and for judy who did have it from the beginning of her diagnosis is necessary from the point of diagnosis of an advanced progressive illness. not before the end of life long before the he said of life. non-hospice pallative care is whenever symptoms, functional impairment and family burden mandate it. regardless of prognosis. and at the same time as all other appropriate life-sustaining treatment. hospice only when life-prolonging treatment is no longer effective or the burden outweighs its benefit. and the result in multiple studies, which i will not bore

you with is genuinely patient-centered care and markedly lower costs. this is the one place in the healthcare system that's a win-win-win. it's better for patients and families. it costs less. it's very clear from the data. art buckwald talked about this very humorously as only he could do. this is from his obit in the "new york times" a couple of years ago. he wrote so far things are going my way. i am known in the hospice as the man who wouldn't die. so here we have someone who failed to die on time and hospice -- he had renal failure. he had to be discharged from hospice. how long they allowed me to stay here is another problem. i don't know where i'd go or if people would still want to see me if i weren't in hospice but in case you're wondering i'm having a swell time, the best time of my life. isaac wrote life is pleasant, death is peaceful. it's the transition that's troublesome.

[laughter] >> and helen keller writing in a book called "optimism" a wonderful essay if you haven't read it. although the world is full of suffering it is also full of the overcoming of it. i want to thank judy and her family for sharing their story and personal photos with me and with all of us today. thank you. [applause] [inaudible conversations] >> i also want to thank susan and healthy affairs for inviting me to be a part of this panel. and it's a real honor to be here with dr. cassel and dr. myers. i'm a geriatrician, a primary care doctor on the front lines who helps care the oldest among

us. my livelihood derives from a very flawed but necessary single payor system, medicare. i deal in nuance not numbers. you've heard a lot of numbers from policymakers today. and my work is really dealing in nuance. in any health reform that may occur in our country, i want what's best for my patients. and i'm here to speak on their behalf, on my patients and their families that are struggling through difficult times. i'm now in my 34th year of practice. in my doctoring life i've had well over a quarter million face-to-face encounters with patients in the exam rooms, in my office, in emergency rooms, in icu cubicles, hospital bed sides and nursing homes. i spent most of my life ministering to the medical problems of the elderly and counseling them in and their families during illness and end-stage disease. many have been my friends now

for decades. they trust me and i honor that trust. i advise, i advocate, i explain, i educate. at the worst of times and when the end is near, i do my best to remain by their sides. 3 1/2 years ago my father died from alzheimer's disease after a long struggle. in the beginning of this ordeal, i thought that i of all people knew what to do when a serious illness befalls a loved one, gains a stranglehold on a family. i was wrong. we muddled through day-to-day as so many families have done and are doing across america. this is my father leonard winakur. he was an army air corps photographer during world war ii. he couldn't wait to get back home and marry his sweetheart, my mother, francis. i came along in 1948. in his late '60s my father had a

major heart attack, in his 70s prostate cancer. one night past his 80th birthday my mother called me in a panic. i don't know what's wrong he said he's pacing through the house needing air. he's all agitated. i ran over there. he was in congestive heart failure. i called his doctor, one of my younger associates. i'll meet you in the e.r., he said. it's such a reassurance to hear these words from a physician one knows and trusts. this was the beginning of a seven-year siege for my family, the beginning of the end of my father's story. it started in the hospital where i made rounds almost every day for three decades. no one made any mistakes. my father received excellent medical care, the best available in america today. his heart failure improved. but within two days he became confused and paranoid and delusional. his dementia had been unmasked. the medical condition is called delirium and it is an increasing

problem in our frail and aging population. i stayed with my family every night fending off bed rails and iv poles, check every bag plugged in his arm running interference when he went down to x-ray and the bathroom, when he became too agitated to rest i reassured him my hand on his arm or shoulder and one night to quell the demons of his delirium, i even crawled into bed with him and held him as he had done for me a lifetime ago. after four days in the hospital and with the assent of his physician, i took my father home because i knew as a geriatrician that if i did not, it would be unlikely he would ever come home again. to continue this hospital stay in this unfamiliar and frightening environment would only add to my father's confusion and agitation, require more medications, and engender even more potential side effects. a further stay would have just

been@@@@@@@ @ @ @ @ @ @ @ @ what my father needed, when many of our patients need was a -- was less medical care, not more. they need guidance, not cat scans. not 24-7 institutional care. families need to understand the limitations of modern medicine, and with on the spot help, regular communication, many folks can remain in their homes and be more content there. and so my family took my father home, and i promised myself i would never put my father back in the hospital again. in his home. and my mother, my brother and i would be by his side. what did my father want? i had spoken to my parents about advanced directives and about the durable power of attorney for healthcare years before. as in most american families,

these are difficult conversations. americans do not like to talk about death. 75% of us have not had a conversation with those we love the most about how we would like our deaths to be. what we would want done and not want done. i'm not the first one to make the observation that humans have a powerful desire for immorality. no one wants to admit he or she is going to die one day and perhaps it is this. our fear of death that fuels this rancorous debate we are having but this is a question for the psychologists and philosophers. years before i had spoken to my parents about these things because as a geriatrician a primary care doctor i know how important the to get people thinking about these issues. it's a process complex and time-consuming. what exactly is cardio pulmonary resuscitation? what does it mean to be fed through a tube? how does one live on a ventilator. if i sign this forms are the

decisions irreversible? can i change my mind? they made me their healthcare proxy. you're a doctor in the family after all they said. i took a deep breath and filed the forms away, tried to forget that one day i might need them. i wrote about my father's illness in an essay that you've heard about that first appeared in the narrative matter section of health affairs and ended up getting excerpted into the "washington post" outlook section and i awoke that sunday morning in august of 2005 to find 500 emails in my box, thousands more followed. i was not prepared for this. i've spent my life trying to solve my patient' problems, patients like dorothy here. but i tried to solve these problems one-on-one together with families, the basic principles of medical ethics as my touchstones, autonomy and justice. justice we teach our doctors in training today.

but what i learned from these thousands of emails from folks all around the country is that many felt at sea. in the worst of times they all too often had no one to turn, no voice of reason, no trusted resource. i wrote about my experience caring for my father about my life as a geriatrician, about all the lessons i gleaned hearing from so many people in this book which i call a memoir manisto and in it i outline the failures of our healthcare system to adequately address the needs of our aging population and their families. i tried to reach out to all the people struggling as my family has struggled. imagine you are alone in a house with your debilitated loved one and you're flown cross the continent and at the bedside of your father or mother in a hospital icu wondering what to do next as the respirator hiss and clicks in the corner. you pace the halls of the nursing home as the aids come to

remove the excement of your mother's bottom and/or you sit on the bedside watching a bag of opaque fluid is pumped drop by drop through the plastic tubing which snakes under the sheets and under the stomach of someone you once knew and still love. you feel guilty and powerless and abandoned and angry and bereft. you have decisions to make and no one to guide you. your father's doctor or some anonymous care team on daily rounds floats in and out of the room very early or very late. you think they are going to try to avoid you on purpose your difficult questions and maybe they are. your own children live far away. your siblings are obstinate or in denial or still angry over some long ago slight, some falling out which seems silly now. you're afraid that you will make a mistake, decide the wrong thing, choose the wrong path, honor thy father and thy mother.

oh, god how can i not feed her through this tube. if i just discontinue this infern respirator i know he will die. the doctor says she must go back to the hospital to treat this pneumonia again. how many times can she survive this? hurting him. if i say enough, am i committing a sin? murder? will mom forgive me? my sister? will i ever be able to forgive myself? i consider it my responsibility to help patients and families make these difficult decisions and for decades i've done so. i have spent hours and hours with patients and spouses, hours more with children and siblings. the conversations are often complex and emotionally wrenching but as far as medicare is concerned, there is no monetary value assigned to the time and effort it takes to have these difficult conversations. not only in a time of crisis but at any time. there are now proposals, as you've heard, to compensate a patient's personal physician for

doing this hard but essential work, proposals that had been misconstrued and misrepresented. on february 24th, 2006, my family celebrated my parents' 60th wedding anniversary, the last one as it turned out. we managed to keep my father at home for over six years. it took a toll on all of us emotionally and physically and financially and yet none of us would have done it any other way. the cost, though significant, and this is an important point, were much less than if my father had been placed in custodial care in a dementia unit and i believe he was happier at home than he would have been anywhere else. still these were difficult times. we had weathered his incontinence, his belingrance and agitation. i thought thought he would break a hip and i would have to make the decision to have it fixed or not.

i knew he could never survive the surgery and rehabilitation. in my dreams, i fantasized about euthanizing my poor, agitated and confused father when the time came and he was in pain and there was nothing more to be done. .. i could never do this to anyone. i am steepen the healing traditions of my profession. by law, regulation, edict, or order, i could never cause harm to anyone. care is available these days, as you have heard. and adherence to my professional coach, i joined the ranks of my colleagues. those that came before me, and those that will follow. soon, 20% of america's populace will be over 65.

half of them will likely have some form of the bench at and only 20% will be fully mobile. at the same time, the numbers of physicians and trained nurses caring for the elderly and other professionals is shrinking. the primary caregivers is half of what was a few years ago. american physicians -- a collapse in primary care. only 300 or so geriatricians are entering retirement. there is one for every 8000 people over age 65. people, over age 65 in america. why did this happen? how has this happened? doctors didn't create this problem. bad public policy created this problem. perverse payment incentives have undermined primary-care medicine, have promoted specialization and technology over face-to-face interactions

between doctors and patients and families. all insurance systems for medicaid to manage your have undervalued doctors like me for decades now, devalued our time, our cognitive conferencing and consensus building skills, rewarded us only for the wrong things. another trip to the er. another round of antibiotics. another course of chemotherapy. we need to take the time to restore a system where the primary care doctor patient relationship has meaning and value again. peoples family want and need someone to trust, someone to advocate for them, who will go to bat for them, who will tell them the truth. who will talk to them in the most difficult times, educate them and offer options. and study after study has shown that the health care provided by primary care doctors, restoring them to the center of the paradigm, will be less expensive care and more satisfactory care. and it also involves educating the public about the importance

of advance directives. this is a wonderful website would together by the center for medical humanities and ethics. where i teach by our bioethicists in texas living wills.org. we need to educate. we need to educate the public. what procedures, under what circumstances are helpful and which are not, we'll let our health care proxies, what are the role, what can they do and not do? what is the role of the family, for doctor? let me make this clear, nothing in anything i have seen is proposing that doctors substitute advanced care planning for medical care. no one is proposing death penalty were outside experts to decide who lives and dies. i would not be a part of such a system nor would any physician i know. but any system that refuses to reward the work of health care professionals for doing advanced care planning and conferencing with families during difficult times is preordained to be cold

and bureaucratic, sterile and uninhabitable. and will subject our failed elderly who finds him or herself with an end-stage disease at the end of their lives to inappropriate, unnecessarily expensive and possibly futile care. end-of-life discussions are complicated. decisions are often arrived at incrementally your family members often at odds over many things must all be on the same page. and electronic medical record is not much help here here most of the time there is no need to rush the process. it's a lot like health reform ought to be. well thought out and implemented with caution and concern. at the end of his life, my father no longer knew that i was his son. but after each visit with my father, if he was still awake, i said to him, i love you, dad. and it was always a surprise when he answered, i love you to. because this was something my

father could never bring himself to say to me when i was his 12 year-old son, or his 50 year old son. from the depths of his dementia my father gave me a great gift or he would be honored by my your presence here today. thank you. [applause] >> thank you so much, all three of you, for giving us a sense of what it really is all about in the areas you operate in everyday. i want to start, we're going to open this up once again to questions from the audience, but i wanted to ask you. we have heard now in the weeks since congress adjourned that many lawmakers want to back away from section 1233, that is

basically been thrown overboard as far as some of the members of the senate finance committee are concerned. it is too hard to explain. people are too confused. it is just not worth it. how does all of this make you feel, given what you talked about? >> i have very mixed feelings about it. i think in the end, this national dialogue about and of care like there will turn out just as the kerry shopper debacle turned out to be positive. although there was a lot of heat and smoke in the end, there was actually a lie because people basically said throw them out. throw government out. these decisions belong within families. this is not, you know, this belongs to us. and i'm hoping that in the end, that will be the same conclusion as a recognition that advance care planning is about restoring power and control to the objects

of all of this discussion and expense, the patient and the family. and that we have begun, as i and all my colleagues have increasingly been doing, talking to the press about what advanced care planning really is. that we have begun to turn the tide on these lies about death penalty and that's all they are, in his life. and we just need to keep saying that. i also think that the most salient health reform changes to improve access to primary care, geriatricians, like me and jerry, to improve access to palliative medicine are things having to do with workforce. those are much more important than, you know, a $75 payment for a discussion about advanced care planning which is not going to be sufficient to turn the tide on the physician incentives to keep doing things. all the incentives need to change, so this is just kind of

a strongman for assault, but not that critically imp to get people to go into geriatric nursing or geriatric medicine. or if we could do something to get medicare dollars to support fellowship training which, right now, fellowships are entirely supported by philanthropy, the pretty frail reed for public policy. those policy changes which are unlikely to be controversial would actually have a huge impact on access to quality care. i am hoping that some of those measures and and some of the bills that senate finance is considering survive. if they do not survive this time, we will keep working on getting them in next time. chris? >> it is a very interesting question, susan. my concern is that so much heat, not only about the death

penalty issue, but the others, has not been in any way related to what's in actual legislation, as you know, and as we've talked about all morning. so the lasting in the world that i would want strategically for the nation is to hold onto something that gets misinterpreted and gets used for political or other kinds of reasons, and not get to what we have been talking about all morning today, which is expanded coverage for americans, reduced coverage for americans, reduced cost burden for and improving quality of care. that's what we really need to accomplish. and within that, what we are talking about, the end of this morning about palliative care, is part of the picture but it isn't the whole picture. so i would not want -- i would want that to undermine the chances of a reform package getting through. i do think that diane's point is

very well taken, that there are a lot of things we need to do in changing the payment incentives. the previous panel talked about bundled payments, accountable care organizations, medical homes. you could build in expectations about palliative care and about palliative care expertise into every single one of those. that would have much more impact overall than as diane said pang a primary care physician $75 once every five years to have a conversation. that is not going to transform our system. >> and, jerry? >> well, you know, i think a lot of people when they hear about some of the proposed legislati legislation, get frightened. first of all, as i said, they are frightened about the subject of death anyway. they don't like to talk about it and they certainly don't want any kind of top down system imposed on them. so obviously, you know, as a practicing doctor, i am in favor

of education. you are right. every five years of communal, in a conference in the exam room is probably not going to do it. but we have taken great education campaigns in this country to do with other health issues. think about smoking. now we are engaged in one with obesity. i mean, this is, to change attitudes, to get people thinking about these issues and comfortable talking about these issues needs to be an educational campaign. and i don't really know how to do that, but i do know there are people that do know how to do that. and i think that's what we ought to really be focusing a lot of effort. >> i think you all do a pretty darn good job of it and have done so here this morning. let's open this up to questions and discussion from the audience. once again, i would ask you to identify yourself by name and affiliation. if you would like to address it, to a particular analyst, please do that. if it is one for everybody, please indicate that as well.

while we are waiting again for any more to come forward, if we build this kind of system, chris, that you just mentioned, and that the other panelists also discussed, accountable care organizations, where payment goes to an organization and it is not on a fee-for-service basis. it is not stimulating this ct scan that particular intervention, but really did, in fact, engage people as diane said, and when finally there is a recognition that maybe things are not going according to hope and that the time is near. what would these look like? these are also kind of scary concepts for americans because there are not a lot of these entities out there to go to and say see, this is something you might actually like. >> there are, i mean, there are a lot of them but there are some of them. and they are not small. i mean, we heard this morning

about geisinger and mayor and kaiser which is eight and a half million people. and intermountain. and a number of other integrated groups. what could happen with something like an accountable care organization is that you could force the hospitals and all the different physicians specialists to come together and say what do we need to take good care of this population of patients. and then they would figure out they needed a palliative care expert and they would figure out a way to pay for it. and it wouldn't require any specific sort of overengineering if we're going to pay this much for this and that much for that, because these systems would figure out. that is what you have seen happen at tranninety at most of these physicians are on salary. if they have in the incident, it has to do with patient satisfaction, which is a pretty

good thing it seems to me to care about. and then ultimately, it does end up costing less. and there is very good about that. without anybody having to ration anything or limit any care that actually makes a difference, but by really coordinating care and getting rid of the things like that frightening story that diane told about the first patient, where you know, huge amounts of that expense, not onlyere unnecessary, but were terribly painful for that patient and for the family. >> diane, would you agree with a comment darrell made any earlier panel that there are lots and lots of physicians out there who want to participate in this change? >> absolutely. one thing i didn't mention was a conversation i had with judy's oncologist when he offered her chemotherapy directly into the

brain. towards the last four weeks of her life, and she called me and said my doctor offered me chemotherapy into the brain. what do you think? you know, should i say yes to the. he had been hitting them out of the park all for the prior six years, so we wanted very much to take his recommendations. so i called them. eni had been in regular contact for about 14 months about judy. and i said, you know, what are you hoping that this treatment might accomplish for her? and there was a pause and he said, i actually don't think it will help her. so then there was another pause while i took a deep breath, and i said well, do you think we should be recommending that she do this, given that it is pretty high risk? because if you put a foreign object in the brain, the risk of infection. and toxicity is quite high. in his response was very instructive. his response was i don't want you to think i have abandoned her. so this wasn't about money.

this wasn't about that's what he gets paid for. this was about he did not know any other way to signal his commitment to her. to signal how much he cared about her. my job with him was to help them show how much he cared about her by going to visit her at home, which is what i did. i said she really wants to see you. she wants to say goodbye to you. can't you make a home visit? he had never made a home visit in his entire career. he was in his middle '50s. takes care of cancer patients. it was incredible meaning for to her and him. and he spoke at her funeral. hopefully it will make it easier for him next time. but he had never knew how to have that conversation. he never knew how to understand that his presence, his commitment to her is what she needed. not another procedure. but the motivation was to show her how much he cared about her. so doctors do desperately want to do the right thing for their

patients. there are no evildoers here. the system is structured to get the results that we see. >> jerry, i have seen you notting. >> i want to pick up on a point. teaching young doctors, medical school and residency, teaching them the kinds of behaviors that you mentioned, getting them to understand the importance of doing things to patients at architect and logical, but our humanistic is very important. and i have to say that in very -- and not very many places as it ought to occur, is this occurring in america today. i have really had the privilege. it has been a privilege, my wife and i., my wife is an attorney, and we both volunteer our time to teach a basic ethics module at the university of texas health science center in san

antonio, both in the first year and the fourth year. and, you know, what do we do? we have conversations like we're having today. we read essays. we read short stories. we read poems. we talk about these very difficult conversations that we must have with patients, and how important it is for us to be attentive to these needs. i mentioned in the beginning of my talk that i deal a lot in nuance. you know, patients very often are afraid to ask these questions of us. how long do i have? what is therapy going to be like? what can i expect? but if you are taught to read the nuance in your patient, in a face-to-face conversation, it can make a tremendous difference. you can really have a breakthrough with someone. and this needs to be a standard part of medical education. and just like everything else,

very often the dollars aren't there for those in medical schools. i mean, we don't treat patients at the center. we don't get research grants. we read poems with medical students. you know, why should that be paid for? in our system. well, let me tell you, i believe that this can make a big difference. it has made a big difference, and so aside from educating patients at end-of-life issues and advance directives we need to educate health professionals in being able to engage their patients during difficult times. >> can i just add to that? i mean, think about mrs. g.'s pain, untreated pain. really come her doctor did not know how to manage pain. i hate to break it to. most of her doctors had ever been taught to manage pain. you should be scared. they don't know what they are doing. it wasn't in the curriculum.

most medical schools have no mandatory training on this, what they are very good at integrating somewhat and putting them in the icu. or you know, ordering a cat scan, we are really good at the doing that. but the most fundamental human needs have been lost from the curriculum, and most medical american schools and we have no national control over the curriculum. medical school by medical school determines this. it is a huge problem and there is no health reform without medical education reform. >> let's take a question here in the front from gail. >> i agree with the concept that has been raised several times about the need to change the reimbursement system, reward the kind of behavior we would like to see. i am very supportive of selective loan forgiveness. i think it'd be much more effective in an era when medical schools missions are very high and physician income growth has

been very low, or negative and were not giving it enough attention. but aside from changing the monetary incentives, important as that is, i am going to implore you to use your influence, to indicate that this is more than just about getting the money redistributed. it is going to be, how do we try to make sure we have the full spectrum of people who could be working on these issues, how can we make more and better use of advanced nurse practitioners to help us with our shortage of primary care physicians. you talked about training new positions in these issues, which i applaud. i am going to plea with you, we need to figure out how we're going to reach this stack of physicians, 600,000 strong or whatever we are, that are out there. we can't rely only on helping to retrain the new ones coming

through. i have to say, when i have spoken to physicians that are in residency, or while they are still in medical school, i am not overwhelmed that they are treating, seems that much different from the training that other positions, including my husband, who was trained in the 1960s, somebody not fundamentally different. so i'm going to urge you, because you spend your life on these issues of trying to think about in addition to arguing for more money and for better recognition for primary care and geriatrics, and in particular, to think about strategies that we can use to reach out to existing physicians. you talk about the lack of knowledge about pain management. do you think that most physicians know that they do not know about pain management? is that sort o