>> thank you all. thank you. thank you everybody. >> thank you all. thank you. thank you everybody. thanks everyone. thank you very much. thank you president and mrs. obama. it was really gracious of you to invite us back to the white house to hang a few family pictures. i am sure you know nothing makes a house a home than its former occupants staring down from the walls.

this is not the first time i have had the opportunity to confront an artistic likeness of myself. a few years ago after the 2008 election, a friend sent me something he found in the gift shop of the national constitutional center in philadelphia. it was a laura bush bobblehead doll he said he found on the clearance shell. -- clearance shelf. i am grateful to know that this work as a permanent home and things to be masterful talent of john howard sandon. you are terrific to work with. -- john howard sanden. i like a lot better than that bobblehead doll. thank you, john. you are terrific to work with. it is wonderful to know that

these portraits will be on view at the white house and walking down the hall from my mother in law and that george's portrait will hang very close to his dad's. it is meaningful to me as a citizen. this is my family's home for eight years. it was our home but not our house. this house belongs to the people whose portraits will never hang there, the ordinary people whose lives inspired us and his expectations guided us during the years we lived here. in this room are many of the people who stood by us as we face the tragedy of september 11 and to work with us in the years after. thank you to each and everyone of you for your service to our

country. [applause] i hope others will see what i see, a woman he was honored and humbled to live in the white house during a time of great challenge and to will never forget the countless american faces who make up the true portrait of that time. thanks so much. thank you, michele.

>> i do not think we have enough tissue to go round. [laughter] jenna and barbara are a mess. i want to thank you for joining us today. i would like to take this opportunity to thank laura for providing such a wonderful model of strength and grace for me to follow as first lady. it is an interesting job. it has been amazing to learn from your example not just as a first lady but as a mother of two wonderful daughters. you are on the other side of where we hope to be in a couple of years, two daughters who sit up straight and cry and think lovingly of their mother and

dad. [laughter] we are working toward that gold. -- that goal. i want to echo barrack. we cannot be more thankful for the warmth and graciousness that both of you showed our family. it is truly a privilege for us to occupy this house. the warmth is reflected in these portraits. -- hopefully, we are providing an example of hope, warmth, and more. i promise you, i am going straight for it. i am sure it will be closer

down the stairs. i will get right down to it. i am thrilled for the visitors who will have the chance to enjoy it. i am thrilled for both of you as you join these incredible americans whose portraits are already displayed here at the white house. congratulations again. congratulations on the work you have done in the example of what it means to be an american family. we are so happy and proud and honored to be a part. it is my pleasure to invite you all to join us for a reception right outside in the state room. now it is time to eat. thank you also much. -- all so much. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012]

>> monday night, and join us for a live campaign fund-raiser in new york city with president obama and former president bill clinton. it is one of the three fundraisers they are expended to -- they are expected to attend together in new york. that is live monday evening at 8:45 p.m. eastern here on c- span. donald trump was the keynote speaker last night at the north carolina republican party convention pin he criticized the leadership of president obama and again raised the issue of his birthplace. he also focused on why he thinks that u.s. economic potential is being marginalized by countries

like china. he hosted a campaign fund- raiser in this past tuesday. this event was at the core convention center in north carolina, one of the battleground states in this presidential election. [applause] >> thank you. this is great. i have turned down many of these are the last couple months. they want me to do the little speech for the conventions and i love doing it, but i really love north carolina and i have to tell you -- [cheering] i am different from your average speaker because i really back of my words. i just bought a huge job in north carolina right outside of charlotte. it is a great job on lake

norman, one of the greatest lakes anywhere. it is magnificent and we love it. it will be something really special. i am really happy because i was told by jon and others that you broke your record tonight. and anything i can do to help really makes me feel good. by breaking records, that means you will raise more money than you ever anticipated. you will use the money wisely and you will defeat barack obama. [cheers and applause] today, when i left new york, happened to turn on the television and saw some news. the market had one of its worst days today. the very, very bad day. jobs numbers were absolutely terrible. 13 million people out of work.

that is a helluva lot of people. 13 million. and the unemployment rate went up today. and all of this is bad news. frankly, you could say good news to the republicans in terms of very much -- an election. but i don't care. we love the country first so it is bad news as far as i'm concerned. we really have difficulty in this country. so many things, if you just picked up today's paper -- in san francisco, they're building something called the bay bridge parent who is building it? -- bay bridge. who is building it? the people of los angeles? the people of san francisco? the people of california? no. you know who is building it? the chinese are building the bay bridge. $1.8 billion and now they have tremendous cost overruns and it

turns out that, if they would have used american labor, they could have done it cheaper. and this is the kind of thing that is happening to our country. the united states has become a laughingstock and whipping post for the rest of the world. america today is clearly missing quality leadership like probably never, ever before. on numerous occasions, i have warned that countries like china, india, korea, mexico, the opec nations who are really having a field day with us, believe me -- i have been talking about for years. we cannot go on. we cannot continue to go on where countries are laughing at us, laughing yet our leaders, laughing yet every single thing we do.

where countries are laughing at us, laughing at our leaders, laughing at every single thing we do. it used to be that we had the greatest negotiators. we were the kings and queens. now we are laughingstock. i can tell you, the people in this room don't like it and i don't like it. [applause] we are losing hundreds of billions of dollars a year. china this year will make $350 billion on us. call it profit. call it whatever you want. the number will be $350 billion and is probably going up. today, if you read the newspaper, the devalued the currency. -- they devalued their currency. by the way, that does not sound good, but it is great for them and bad for us, as you can probably expect.

they don't respect us. and then devaluation, which nobody believed was possible, but to have the audacity to do it, that the valuation will make it really hard for our companies to compete against chinese companies and china itself. it is a terrible thing. and what do we do? we go out and we hold beautiful, beautiful receptions and dinners, black tie, for the president of china when he comes over. some people loved what i said and some people didn't. i said, if he came over when i was around, i wouldn't give him black tie dinners. i would talk to him first, bring him into the office, and we would discuss things. and we would see how he responds. and if he continues to take advantage of this country, there is no black-tie dinner. there's a mcdonald's. mcdonald's.o

there is no nothing. it is thank you a lot folks. [applause] because the fact is we have all the cards. people don't realize this. we are rebuilding china. i usually say when was the last time you see a major bridge like a george washington bridge a verrazano bridge -- was the -- when was the last time you saw a major bridge built in this country? but there is one, the bay bridge and that is being built by china. you go to the opec nations and it is unbelievable what you do. then fly back home and you land in new york. you lead the los angeles. -- you land in los angeles. you come to love or airport, kennedy airport, -- you come to love or area airport, kennedy airport, lax, and it is like a third world country. i have a lot of friends were --

friends who are leaders of these countries, that our leaders of the economy. they don't believe what they are getting away with. they cannot believe it. he is showing in airport, the most pitiful airport have never seen and -- the most beautiful airport i have ever seen and he shows me that there is a sponsor of the people can get a massage before they get on an airplane. -- there is a spa so the people can get a massage before they get on an airplane. i said this is the most beautiful airport i have ever seen. he said, no, no, you don't understand. this is just temporary. we're tearing this down next year could look at the horizon. i saw 32 cranes building something i had never seen before, the real airport. then i landed in la guardia and i said can you believe this? it is a real disgrace.

when you see that place, you'll know what i'm talking aboutl. when i look at countries like colombia, very good people, but you look and last year, the made $4 billion on us. we don't make money on anybody. and then you hear about social security and medicare and medicaid and i hear so many different theories and so many different ways and obviously we all agree that we have to stop the fraud and abuse. you know the greatest thing we can do? if we got this country roaring again and the potential is enormous, but if we got this country roaring, roaring, roaring, it solves the problems. but you cannot do that when china is taking our jobs. you cannot do it. [applause] when china is taking our jobs, we are a bunch of patsies. when they're making our products -- it is not only china.

china is the worst abuser, then maybe opec. who abuses us more? opec would not be there if it was not for us. one of the things i find amazing -- they talk about barack obama and his foreign policy. what is his foreign policy? think of it. he goes in and does not defend egypt. i don't know what they say behind our backs -- you can imagine -- but at least come out with lee, they were supporting israel and -- but at least, outwardly, they were supporting israel and we paid everybody a lot of money. we can do anything on our own, -- we can't do it on our own merit, and we have to pay everybody. now that regime has been taken over by a group of people that

make them look like babies, totally anti-united states, totally anti-israel, totally anti-everything. and the world sees how we acted. and they cannot count on the united states. a look at what we have done in iraq. i get in trouble for saying this, but i am not changing my mind. the nice part of not being a politician is i can say whatever i want. [applause] if people like it, that is fine. if they don't, that is okay, too. but look at iraq. the smart people said, when we went in to iraq, we did it for the oil. it never made sense. they did not have the weapons of mass destruction. we knew that early on. we ended up in this absolute quagmire. $1.50 trillion, thousands of lives and our wounded veterans all of the united states -- you

see them all over the united states. and i made the statement very strongly few years ago saying, look, they have the second largest oil reserves in the world. people don't know that, right after saudi arabia. why are we not at least paying ourselves back out of that oil? [applause] and these stupid politicians said -- and some of the press, by the wycombe in all fairness. i think -- by the way, in all fairness. i think the press maybe leads the politicians rather than the other way around.but the student politician -- the stupid politicians say, can you believe? how horrible it has been. we have given them democracy. they will not have democracy, folks. there will be the meanest and

hardest and greatest hitter of -- greatest hater the united states that will takeover. and what have we done and what have we gotten? i actually said take the oil, leave them plenty. at least give us back our $1.50 trillion good in the old days, when we were smart and we were strong, we had a war and, if we won the war, we take it. we take what we need. it is called to the victor belongs the spoils. [applause] so look at iraq. we go in and spend $1.50 trillion. we're there for years. and we leave. we leave. we get nothing. whoever heard of this? take another one, libya. so libya starts and the rebels are being routed by gaddafi. so the rebels see obama, this man with the great foreign policy and the rebels see the

obama representatives and say we are being eroded could if you remember, they could not have -- and say we are being routed. if you remember, they could not have lasted another two days. those people were loyal to gaddafi. they died with gaddafi. they died with him. and the rebels were gone. they gave them two days, three days, but they were gone. and the rebels, who we do not even know who they are -- who are these rebels? we don't even talk to them anymore. it sounds like a very romantic term, like "gone with the wind," the rebels. a lot of crap. the rebels say we are being routed, will you help us? and we say, yes, we will help you. and we spend hundreds of millions of dollars dropping these missiles all over the

place, knocking the hell out of the army, knocking the hell out of the about the -- i mean, that -- knockigng the hell outo i, i mean, that guy guy got wiped out -- but we're spending hundreds and hundreds of millions of dollars. the rebels take over and you know who they sell their oil to? china. we don't buy oil from them. china is their primary customer. do you know how much china spends? nothing. they were not involved. i say, before the end, before they made the deal -- because i am very instinctively a businessman. i made a lot of money. i love making money. i love creating jobs. i'd just like the system. but it is a hard system because regulation is so bad.

i said to the representatives and whoever would listen to tell the rebels -- they would have given you anything. three days they had, maybe one day -- say, listen, we will help you, but we want 50% of royal -- of your oil. you know what they would have said? where do i sign? if you had said 75%, they would have said ok, too, but i want to be a nice person. i don't want to get greedy. [laughter] libby is a big oil-producing state. ibya is a big oil-producing state. we would have gotten their oil. there would have had plenty for themselves. i don't want to take it all. and all you had to take it -- anybody in this room could have done it could just say we will help you, but we won 50% of your oil. hear,. -- here, com on. they would have signed.

now, by the way, it was suggested that they pay is that the money that we spent, which was peanuts, and they said how dare you ask us for that? we are sovereign nation. how dare you, and they throw them out of the room. by the way, this is the duty of all duties. -- the beauty of all beauties. in iraq, they said we have destroyed their country and we want retribution and we want you to pay us back for the damage you have done in iraq. do you believe this? our leaders, they don't have it -- i wouldn't be surprised if the media. it is hard to even talk about. so you look at what is going on. you look at two cases -- i just use them as examples, iraq and libya. now, iraq was a very powerful nation. relatively speaking. it took us three days in terms of wiping out their army. but we did not count on the people with the bombs and the this and the dirty pool that was played. but iraq was a counterbalance to iran. for years and years and decades and decades, one would go 3

yards over and the other would go 3 yards over. one would use poison gas and the other would use something. but they were basically a identical. and they could not do anything. this was a natural chess that took place over many, many years. military check. we decapitated the iraqi army. so now iran is just waiting. at some point, there is no question, as sure as you're sitting here, unless something else happens first, like somebody wanting to get elected and the only way he will do it is to start a war with iran -- i will tell you what, if iran is negotiating now, they have to be crazy. i said this the other day. they are sitting on hot timber. they are really crazy if they are not negotiating. and, by the way, do, in my opinion, want to negotiate. if you have someone who wants

to have war because he does not want to excepting negotiation that could turn out to be much stronger than war and you could make a much better deal than war. but it could be better politics. i love this twitteromh smf -- the twittering and tweeting. it is the new-age. "the new yorkwn th times." i always wanted to own a newspaper. now i own a newspaper and it did not cost me anything. it is unbelievable. [laughter] i predict there is a very good chance we will end up in a war with iran because i think it is politically possible we have a positive for obama, even though it is not a good thing for our country. and we're also talking about -- hey, look, i am the most militaristic person in this room and we got a lot of them,

especially the sheriff who picked me up at the plant. tough guy. that is why your crime is down. i love people like that. but i am the most militaristic person in this room. but you have to know where and when to go with it. i think we can do anything we want with iran. we don't even talk to them. the leader comes to new york city and nobody talked to him. he gets up at columbia university and a disgrace him with the worst statement. and you know what, i am only interested in the deal that is good for the country. let's see what happens with iran could but assuming it goes on or less the way it is going right now, iran will walk in and takeover rack like nothing to -- and take over iraq like nothing take over direct like

nothing. and they will take over the second largest oilfield and reserves in the world. and we will have made that possible with their $1.50 trillion dollars and -- on their $1.5 trillion and the thousands of lives that are wounded and dead. people in washington don't know what they're doing. it is a very sad thing. [applause] during my lifetime, i have always been told that a person of great accomplishment, somebody that is really, really successful cannot get elected president could cannot even run for office. and i am starting to see that. as an example, i have great, great respect and have learned a lot about him -- i know him well. he is a fantastic man, a fantastic guy, mitt romney. he really is. [applause] he has had great success.

in fact, president bill clinton, who i also like -- he said really nice things about me last night which shocked the hell out of everyone could he is a great guy. he is an honest guy in his own way. [laughter] but he said -- he is. but he was very, very, very positive on the business career of mitt romney. us night, magic last night, -- last night, piers morgan interviewed last night. piers won celebrity "apprentice." it has become the biggest story. he interviewed president clinton, which was a great interview. the president was correct, although i don't think barack obama think so. they talk about the business career of mitt romney. and the president, among other things, said it was sterling.

the word "sterling" is powerful. that is a great word, especially nowadays with the dollar having problems with everything. [laughter] but the word "sterling" is a great word, a powerful word. i can imagine the white house must be going nuts. but he was honest. and the man has had a great business career. over the years, have seen him. i have always heard that, if you have accomplished something, if you have done something that is terrific, if you are a great businessman, which this country really, really needs. as i said, we're just being ripped left -- we don't know what we're doing. and it is just so important. but when president clinton made that statement, the word is today that the white house is livid. if you know and if you have been watching -- and most of u.s. republicans have been

watching the way i have been watching -- the original cell of -- the original salvo in the obama campaign was the romney business acumen. the man has done an amazing job. but it was an attack. now you have cory booker, the mayor of newark, who came out and said you should not do that. and then must not, you had -- and then last night, you had president clinton really, really giving positive kudos and just fantastic words of praise to mitt romney. and he did that because it was the right thing to do. and i assume that ends that

particular attack because it will be very hard to continue to attack mitt romney from a business standpoint. i'm sure there will find something else for the will try like hell. but it does tell you, when a man who has done so many wonderful things and can be attacked so viciously, it really is a tough life being a politician. i know we have plenty of politicians in the room. it is not easy. one of the reasons that i decided that i would not run -- as you know, was doing very well in the polls and i loved doing it -- i had to make a decision because i had so many things going. i don't want to bring up a very successful show called "the apprentice." i assume you all watch "the apprentice." summary said, because i brought up the birth certificate, i am -- somebody said, because a product the birth certificate, i am a racist. -- somebody said, because i brought up the birth certificate, i'm a racist.

i have arsenio hall. because i asked to see his college records, i would love to see them. there is one line called place of birth. i would like to see what he said. it would be very interesting. i don't care what his marks were could i just would like to see place of birth. perhaps it will save hawaii. -- say hawaii. perhaps it will say kenya appeared i would like to see place of birth. and they said racist. what does this have to do with racism? people are writing stories about what does it have to do. all other presidents have given their records. so this is really the reverse. as you know, last week, i just happened to have been -- and just happen to have it in my pocket.

this was from barack's publisher. it said, this is a book, printed -- this is printed. and it said barack obama was born in kenya and raised in indonesia and hawaii. ok, that is what it says, 1991. in trouble.'s and the press doesn't want to hear it. he is very protective. it is hard to believe. bill clinton last night actually said on television that it is pretty well the tournament -- he used "pretty" and not the word "determined." he said it is pretty well

determined that he was born in hawaii. i am not a believer. we will see what happens. but i am about jobs. i am about economic development. i don't really talking about the place of birth because, every time i get on a television show, i want to talk about jobs and what we can do and how we have all the cards. and they say, mr. trump -- i want to show how many jobs we create and we don't need saudi arabia and these other countries. [cheers and applause] frankly, we don't even need the canadian pipeline. i think it is great to have it. we don't need it could we have the soil right under our feet. by the way, i love canada. but we don't need it. technology has become so incredible today in terms of getting things come in terms of getting what is under our feet give it has become so

incredible that, 10 years ago, five years ago, nobody realized what we had. we are a tremendous power. you know, we should be a tremendous amount -- have number one customer of our coal -- to china. they use our coal, but we cannot use it. we have something called clean coal. let's assume it is "pretty clean," ok? [laughter] but we have coal. we are the saudi arabia of natural gas. it is hard to get it because of the regulations. we are beyond saudi arabia for cole. -- for coal. we're the best, the biggest. and it goes to china. by the way, china talks about carbon content -- believe me, they talk. it is all talk. you know what it is? it is all laudable -- it is all a lot of bull. china is spewing more crack into the ear than ever before.

-- china is spewing more crap into the air than ever before. i know more about it than barack obama will ever know. and green energy is fine. the problem is the great cost prevent me give you a great example. when bills are a great disaster. when you need the energy, -- windmills are a great disaster. when you need the energy, the wind is not blowing. when the wind blows, the sucker's explode. did you see it? the suckers blowup. they'll want windmills' until- -- the environmentalists all want windmills until they say to

put them in their backyard. go to cape cod and see how the environmentalists feel about windmills. there was the consummate else's neighborhood, but not in there's a good look at what happened to palm springs, california. you feel like you're in a bad version of disneyland. what it does to the environment, windmills are a disaster for the environment. you put them near plants and factories, that is one thing. but when you put them all over your countryside and the sort -- and destroy your countryside and it is a lousy form of energy -- you never heard of cylinder, i'm sure -- solyndra, i'm sure. i could see it going bed. -- he got a guarantee for $530 million. i could see it going bad. but let it go back in three or four years, not like a couple of months later. [laughter] we'll run businesses.

many of us have businesses big and you make good deals and you make bad deals, but they take years to go bad. it is not 15 seconds after the loan is approved. it is unbelievable. so i think that this country has enormous potential. we have horrible leadership. [cheers and applause] if we had, as an example, the right people negotiating with some of the country's that are all laughing at our stupidity and who are all over the lot and everyone has a different deal and that is fine -- to me, it is very simple. i know people who are so horrible, that are so vicious -- in some cases, they're nice, but they're great business people. some of them are nice, some are not. most are happy, some are not

good but business is all they think about. they have no life. their names that you would have heard of. they went in lot. -- they win a lot. i win a lot. if i take some of those people -- i don't like to call them friends. they almost cannot be friends. but i want the negotiating against the chinese, not a diplomat who has to be nice. you know what a double mass -- you noted diplomat does? they go to school and study how to be nice. you ever had dinner with a diplomat? you go home to your wife and say he was a nice person. china uses their best. they have a school system where, you are not good, boom, boom, boom, and they end up with their best people.

and then their smart people take people.r stupid they have a system. i am not saying we should have a system, but we do have a system in our own way. you have people who have made a lot of money and have been really good and know what they're doing. why are we not using those people to do our negotiations against other countries? look at brazil. a friend of mine is buying an airplane. i said, a great, great. where are you buying it? brazil. i said, brazil? why are you buying it in brazil? i get a great tax credit. where do you get that tax credit? here. if i by the airplane, i can get a great tax credit. you mean, if they build their plan in brazil, you get a tax -- you mean, if they build the

airplane and you buy it in brazil, you get a tax credit here? yes. it is like the bay bridge. it is like so many other things. and he didn't even think about it, but i thought about it. isn't that crazy? that is what is happening to our country. that is really what is happening to our country. what has happened is i was having a great time running. i really liked it. i went up to new hampshire. great people. we had an amazing time. i was doing, as you all know, really well in the polls. i went to the white house correspondents' dinner. the press is so dishonest. the president of united states spent a lot of time talking about donald trump. i made -- i was in this room where i made this ballroom. and the president of the united states was telling, very respectfully, dol trump jokes. it is funny could -- donald trump jokes. it is funny.

when i walked in, they said, do you think they will talk about you, mr. trump? i don't know. i sat down and the president is talking with joke after joke about donald trump. he was very respectful, actually, and i had a great time. as some of the men and women in the room will do, i kept my wife on her knee. -- i tapped my whife on her knee.i was trying to act stonefaced. am i supposed to laugh? what am i supposed to do? i am neutral. i tap my wife on the knee. do you believe it? the president is devoting most of his speech to me. this is unbelievable. just so you know, i am a presbyterian. i swear to god that happened. do you believe this?

i have 6000 people in that room, the biggest ball room in washington by far. i think it holds 5000 or 6000. and everybody is there and all he's talking about is me. i said, "do you believe this?" he is talking about me. i had a great time. unbelievable. the next day, i wake up and i read, "donald trump had a miserable evening. i could see it all over his face. he felt humiliated." humiliated? it was the greatest. the press is really dishonest. the biggest thing mitt romney has to fear is that press. they don't tell the truth. i am not saying all of them. i know some great reporters. and it is a great profession. there are many dishonest reporters. they have done stories where

they told me they were wrong, but they had to go with it. the story is more exciting. these are some of the most dishonest people ever. there are really good ones, really talented ones. but there are really bad ones. i think it is the biggest fear that the republicans and mitt romney will have, because the level of protection of barack obama -- as an example, mitt romney has done many deals. they have been, generally speaking, fantastic. obama never did a deal, except for one -- his house. ok? his house. he got away with that, but that whole house thing is a very, very bad situation, and he got away with it. i guarantee you, if he was a conservative republican, or if he was somebody else, he would be in deep, deep trouble, to put it mildly.

we have had somebody in the white house who had no experience, who had no track record. honestly, he has made bad deals. they talk about osama bin laden. pakistan is getting billions of dollars from the united states, and yet they are supporting osama bin laden. i do not think it was much of a mansion, but they call it in mansion. i would not want to live in it personally. but it was big. it was the biggest house in the area by far, and it was right next to their military academy, where all their best soldiers are. that are very good militarily. they know what is going on. do you think they do not know what is living in that house? how stupid are we? we are giving him billions of dollars.

a caucus made to the president. -- now a call gets made to the president. the call says the following. we think we have osama bin laden. let us assume anybody in this room is president. i give the military tremendous kudos. there are three things we can do. leave him alone? we do not want to touch him. you can do three things. leave him alone. we do not want to touch him. we can go in and get him, or a drop a missile on him. i would have said that, i think. it would have been so nice, right? he said go in and get them. that was good. but who would not have made that decision? is there anybody that would not

have made that decision? instead of sitting back and relaxing, he is bragging, because that is one of the things he did. give him some credit, but i think anybody else would have done the same thing. look at polls of the military, and mitt romney is way higher. they did not like him grandstanding with osama bin laden. they did not like it. anyway, i am sure i will get in a lot of trouble for some of these things, but i do not care. [laughter] [applause] we actually have a lot of national press back there, and they are celebrating. -- they are salivating.

we are going to get drama. who cares? but we really have to do something. we have to do something soon. north carolina is one of the most, if not the most important state, in terms of who is going to become the next president. [applause] we need a president who is smart and tough, and gets it. we need a president who has business acumen. we need a president who has business ability. we also need a president who has heart. mitt romney has a lot of heart. the reason i decided not to run is i got to know him. i heard him in the debate about china, that china will not continue to manipulate their currency. they will not continue to destroy this country. and if they do, we are going to

the world court. and if they do, we are going to do other things like tax your product 25%. and they will come to the table because -- [applause] they will have a depression in china the likes of which you have never seen. it is not only us. europe is doing unbelievably badly, unbelievably bad light. china -- he is doing a number on them also. their manipulation of currency is sapping the europeans. one thing about europe -- they created the euro. they got together and they created a currency. do you know why? because they wanted to do harm to the united states. they wanted to compete against the united states. now it's coming back to hurt

them. i have a lot of friends in europe. i came from europe, i guess, a long time ago, meaning my mommy and my daddy. but they did want to inflict harm on us, economic harm. and boy have they gotten screwed. what a mess. they were not counting on greece, spain, italy, and everybody collapsing. what people say about europe -- i am not sure. it could be the reverse. every economist disagrees with me. but i went to the wharton school of finance, best business school in the world, and i was very good at economics. the bureau was created to be euro was created to eat with united states in business. germany is trying to take over the world. the credit militarily. when greece looks at who is

buying out all their debt, germany is doing very nicely. but you may only end up with germany. i really feel that it is very possible that with respect to europe, if it gets weaker and weaker, which is probably happening, that is a positive thing for the united states. the only one that said that. in a statement about europe, they talked about other countries that were taken advantage of. i am here because i love this country. i would much prefer, as much as i love north carolina -- i would not mind being home, playing with baron trump. but this is so important to me. these are political pundits, but i tend to agree with them. i have heard numerous times by a very smart people, some of

whom i can respect, most of whom i do not respect, is who wins north carolina wins the election. have we heard that? [cheers and applause] in other words in other words, you are in a very important position, and you can bring it home. i hear the polls are very uncertain. -- i hear the polls are very even. most people do not like barack obama. but he is a great campaigner. that you have to give him credit for. and you are going to have to fight like hell. probably, it is true. you might add florida. you might add ohio. the fact is every time i am listening to some of the most respected people, they are

talking about the people in this room. with that, i leave you. i wish you luck. i have enjoyed being here. you are great people, amazing people. i really am honored to be with you tonight. have a great evening. thank you very much. thank you. thank you. thank you. [applause] >> i want to see everybody playing on the trump national golf course in north carolina. thank you, sir. >> sunday -- >> this to walter cronkite as the lone killer family man, but

there was another side of him that wanted to be the best that ratings. he is probably the fiercest competitor i have ever written about. and i have written about presidents and generals. cronkite's desire to be the best was very pronounced. >> duh was briefly on his new -- douglas brinkley on his new book. >> martin o'malley, chair of the democratic house association was the keynote speaker at the democratic convention today. you talk about the important new hampshire makes in the presidential election hand discusses mitt romney's record. this is about 20 minutes.

>> you will seem pretty fired up here in new hampshire. maybe cloudy and rainy outside, but it is warm and fired up inside. it is agreed to be in new hampshire. [applause] senator, thank you very much for your introduction. i want to say thank you also to my friends, the chairman ray buckley. thank you for doing this important job. new hampshire is critically important to our country this year. [applause] i also want to thank first alleged cheer clark and second vice chair solomon -- first vice chair clark and second vice

chair solomon. and jeane j. keen -- gene shaheen is doing a nice job. don't you all think you have had a nice governor? [applause] john lynch, you know what a great governor he has been for new hampshire. john lynch has been that person stepping up. he brings people together to get important things done, to create jobs, to improve education, to reduce the cost of health care, to keep new hampshire is streets and neighborhoods safe, to protect the environment of this beautiful, beautiful state. you will, too, have a beautiful

state. i'm glad to say that i have had the pleasure of going door-to- door in some very picturesque places here in new hampshire. you know, from mount washington to lake winnipesaukee, from the waters of portsmouth to the great north woods, one can just picture mitt romney driving his family -- [laughter] up here to one of his many homes. [laughter] children in the back of the station reagan. [laughter] -- station wagon. [laughter] dog tied for lee to the roof of the car. -- dog tied firmly to the roof of the car. [laughter]

and the dog would admit that mitt happens. [laughter] [applause]

>> you'll notice that we've configured this to discuss the

variety ofarts of the health care world. and every organization represented there has been extremely helpful not just in financially supporting t series but helping us to plan it out and make sure we had the right folks around the table. and finally, let me just reiterate o thanks to informal advisory board from the national commission coalition on health care, who is also a member off board. there is a sheet describing those folks ifhose materials.

we'll make this whole thing a very productive exercise. we're pleased and actually quite fortunate to have guiding us through this entire series susan denser of health affairs, who i will not say anything nice about because you know all the good things about her. we'rjust very happy that she's here to make sure everybody gets a chance to make the contribution that they're doing. susan we'll turn over to you. >> we tried valiantly in the

first session and failed, we will probably do that again today, just because of course as we all know there are multiple determinants of higher heal care spending and these don't stend to exist in d-- tend to e discrete silos. and as you know, as ed said today, we're going to be talking about technology and chronic conditions as drivers of health care spending and health care costs. we of course are attempting to understand not just the role that these play in contributing to the health care costs and ending issu but also in particular to start to discuss what is actionable, what can we actually do about these things, are there policy initiatives that would address them that would not contravene some of our

own goals in having a robust health care environment that does address our needs. so what we will hear this tension throughout the conversation today as we discuss some of the actionable -- potentially actionable policy solutions but recognizthat there are trade-offs involved in embracing them all. to get us started, we're delighted to have two speakers, joe antos from american enterprise institute and ken thorp from emory expect about the roles of technology and chronic conditions. and joe, we're very happy to have joe here with us today. he decided to have an authentic heal care experience over the weekend in order to have a legitimate grip on his subject, but joe managed to come back om a case of sciatica and be with us today. joe, thank you so much for being here. we know it was only with considerable effort that you were able to join us and we

appreciate that. so, jo, we're going to start with you. joe has a presentation and then we'll move directly in to ken's presentation. joe, all yours. >> thank you. what do we aim at? okay. all right. there we are. so i promise to stay on the subject for whole minutes at a time, technology, and of course you saw the picture of marcus welby. you know, if you got up this morning and took a pill, you used medical technology. that's probably what almost everybody in this room did. i took quite a few pills. they didn't do much good. ck, get to work. but virtually everybody -- what's that? i'll be getting to that in just a second.

so rick has already taken me off of technology and out of my favorite topic. marcus welby, that instrument that he's using, that was probably the best one that he had in those days. the reason he went to your home to visit you, he ok that black bag, what was in it? a stethoscope, something that had been available sense the greeks. they had a thermometer, too, good deal. health care is not practiced that way anymore. and i think mostly we can say that's a good thing. so there's the contrast to marcus welby. that is is proton beam therapy chamber. it's somewhat controversial but one thing you can be sure about it is it's expensive. it's always interesting to know how these things work. here's a nice schematic. you can see there are these

various ways to treat people. the real power source of course is money. if we didn't have big demand r this kind of technology, we wouldn't spend the money. it's the money at that drives the system. so i'm glad i got past technology so i can now talk about economics. no, seriously, i'll go back to technology in a minute. so that's the point. as susan said, the various sources of health care cost growth that people have attributed over the years are not separable and in particular they all have their root in either the supply of something or the demand for something and since it's a market economy, it means money. and in this particular case it's both supply and demand. so anyway, here's something that

i found in someone else's presentation, i thought it was very interesting. this does reflect the march of cost of technology and of course the march of progress. you know, the traditional technology, which it's not clear that that's really traditional. the real traditional technology of course is something the cave man did so this is really kind of advanced stuff since about 1910 or so. but, you know, we'll take it. and you can see that over time we've gone to more and more sophisticated equipment and every time there's a new generation of equipment, it seems as if the cost is higher. what i can't tell you for sure is whether this is in price adjusted terms but it probably doesn't matter. i think the impression is

undoubtedly correct. when pple talk about technology, they usually think about pieces of equipment. it's not just pieces of equipment. it's essentially everything that a doctor does. i mentioned drugs. that's part of technology. equipment is part of technology. not just the equipment that is in the hospital up against the wall of some big thing but also the little things. the stethoscopes work a lot better these days, to pick on the thing that i mentioned marcus welby had. but also it's medical technique. that's part of technology, to. even if the basic tears are the same as they were 20 years ago but you now know how to do it, that is an advantage in technology and all of that adds to both the supply of services that are available to treat disease and diagnose disease and also the demand for such

diagnoses and treatments. now, one of the things that you'll see in the literature, which i've never particularly und useful, i'm an old labor economist at heart, but technology, you'll see the studies that try to parse out how much of cost growth is accountable for -- by various kinds of factors, including technology and technology is that -- is that one thing that can't be directl measured, although i'd argue that the other factors that people usually point to aren't that measurable either. everybody admit that technology isn't that measurable. so it's not technology, it the i don't know factor. so if you see somebody say technology is responsible for 60% of cost owth over some period of time, maybe. maybe not.

it's just not at all clear. and technology alone -- as su s suess -- susan said, technology alone isn't th culprit. if people didn't want it and the money wasn't there to buy it and doctors wouldn't do it, then that technology wouldn't be used. so when you have better technology, you generally have beer care. not uniformly but overs vast span of time we see this to be the case. and my example is cataract surgery. there's evidence that a crude form of cataract srgery that was literally someone putting a stick in your eye, was practiced sometime in the babylonian era

but more concrete evidence, there's evidence of something in the 16th century of sticking a fancy stick in your eye. that didn't work too well, probably wasn't used too often and there wasn't anesthesia at that time so you had to really want to do it. in the 60s, vast improvement in enpatient operation, we've learned something about infection so in the 60s we're far more capable of dealing with infection, that was a technological improvement. but it was risky. this is the kind of thing you used a sharp knife, probably sharper than something you're likely to see on the streets of washington in the evening but it's the same basic principle. essentially because it was so risky, very few patients ever got it, it was alwayseserved

for those patients who literally couldn't see out that eye, often only had one operation and the idea was to extract the lz and after the operation, which was highly risky, they sewed things up and then the patient was held in the hospital room with at least two weeks with sandbags so they wouldn't move. very uncomfortable. not so much patients were willing to try it and those who were willing to try it were absolutely at the end of their ropes. that wasn't too long ago. then we move to today, sometimes within the last 15, 10 year20 ye have a much more sophisticated procedure, doctors are liking through microscopes to make sure they're cutting exactly in the right place, uing a more sophisticated procedure to replace the lens theshs replace the lens with something that

makes you see better than you ever saw in your life. and even better only the unfortunate few don't make it to dicare before this happens. if you're medicare patient, they pick you up, give you lunch, zap out an eye and two weeks later they do the same thing. so it's the food program. the fact is that better technology is generally consistent with re successful results. and you have mething tha works better, you generate better demand. those the price might be lower on a per-patient case, the price is generally lower. there's no guaraee that the price will be lower. overuse, underuse, misuse. these are the terms that everybody hears and a great example has to do with treating coronary disease.

this is from a paper done by skinner and they classified using another study from somebody else, they claified different kinds of treatment according to their cost effectiveness and their cost. and you can see the way they did the classification, and i'm sure anybody could have ample reasons to argue one way or another on any specific intervention but i think the overall sort of pattern here is interesting, that effective low-cost treatmen were, according to them, accountable for more than half of the mortaty decline due to ronary disease between 1980 and 2000. of course they didn't have the guts to sayhat anything was actually not cost effective but less cost effective and probably there wasn't anything that wasn't effective in a sense and the word "cost" i think is probably an issue here. you can see that according to their categorization, the more

aggressive treatments, constituents, cardiac rehab, they're much more expensive than aspirin, for example, that they account for maybe 19% of the mortality decline. you want to be a little careful about this kind of display because you have to ask yourself something they didn't ask themselves in the paper, which was what was the condition of the patient? mebody who really needed a cabbage, you could shove an awful lot of aspirin into their mouth on their way to the morgue. so it's not at all clear -- this is in fact a kind of a resit you'll study. it's not very reliable either, but it does say something about our use of services and it does imply something about economic incentives associated with the complicated things. aspirin, who makes money off

that? not even the drug companies. cabbages, who makes money off of that? you know who they are. that's something to think about. nonetheless, would you turn this down? would you go back to marcus welby's day where they had heard about infection but basically couldn't do much? no, of course not. the thing is they want all those things. i'm still sore at rick because he hasn't given me the drug that's really going to help me. but i'll give you till 2:00. what about evidence? can we find out about evidence? here's a study by elliott fisher looking at regional variations in medical spending. and this is an index called the end of life expenditure index. so these are medicare patients at the end of their life, i didn't read the article close enough to know how close to the end of their life they were but you knew they were. so pretty close.

and look at the distribution of tests and procedures that were done on people close to the end of their life. and lo and behold what do you see? very few major procedures, quite a few more minor procedures but a lot of imaging, tests, evaluation and management. that's where the money is for the very sick people and obviously that's where the money is for the not very sick people. it's not in that -- i mean, there's plenty of money in those fancy machines, don't get me wrong. but where is the real through-put? it's in the seemingly ordinary interventions that we're all used to and expect. that's where the money is. okay. so, well, everybody says, well, let's do some effectiveness research and figure out what we really should be doing and don't do the this evenings we shouldn't be doing. the only problem is that there

are an awful lot of things that we do and there are very few studies looking at what we should be doing and i don't care whether you look at the stimulus funding and you look at the billions of dollars that are going into other places. the research can't move fast engh. you can't spend enough money. you'll never get ahead of it because things that we accept for granted we do without question. and occasionally when we question it, such as the on and off again discussion about the blood test for prostate disease, we get a lot of resistance because that's not the way we do it. the reason is that it's probably more than 90% that we're never going to look at, that 10% or whatever the percentage is the small part, the glamorous part.

it's heavily regulated, it tends to be drugs first and that doesn't strike me as being the intelligent way to allocate resources if you're going to look at effectiveness research. this wasn't meant to be a diatribe against skeptical research but i've always been skeptical. these are always highly refined. it's not clear they would tell you what would happen to the average patient in the average setting and that's a problem. that's what you want to know the answer to. is it going to work most of the time rather than under ideal conditions or is it not going to rk? things that would work under ideal conditions might well not work under normal conditions. of course let's not forget about the patient because the patient might not be adherent either. and professional judgment

changes all the time. why is that? because there are changes in the way you do things and partly because our experience grows. we see more patients. that experience is accumulated not necessarily systematically but it is and our views, professional views about what to do changes all the time. effectiveness is interesting, it's going to make a lot of people a lot of money, i don't think it going to have any substantial impact on how we spend the money. can we spend or money better? i think there are some things we can do. part of the problem is that hardly anybody in this country actually pays for what they get. theyay for it, they pay 100% for it but they don't know it. they pay through indirect means. when they go to their doctor, the doctor can't tell them how much it's going to cost them because the doctor doesn't know what he's going to get paid. that's where we have to focus our attention and we also focus our attention, of course, on better information. but if you have don'tnow the

price, you are don't know much of anything. knowing clinical effectiveness doesn't get you halfway to knowing whether that's something i want. because what you want know is value. so there are lots of things we can do. theedicare problem has tried lots o things. they haven't been very successful because it is not a health program, it is a political program and political programs cannot make decisions. they try but they can't. i was tied up with the centers of excellence project, it was a great project, it worked spurtly and it was shelved. another program, the hard part was not setting it up to phase in something that might not work, the hard part is phasing it out. what can do you?

conservatives talk a lot about financial incentives. i think this is a case where we do need to apply financial incentives the whole system. private insurance i think is the more likely place where you're going to see action along these lines. along any of these lines. why? because although they do ultimately report to congress, they don't report directly to congress. so there's a possibility of some progress in making hard decisions and trying to make them stick. i've got to say i haven't seen much evidence of that but a conditions -- economic conditions tighten, as business conditions tighten, as the resistance of employers to higher premiums thereby necessary stating to keep premiums not so high, necessary stating higher and higher ded t deductibles and co-payments, i

think we'll begin to see that turn around. one theory that chandra advances is why don't we attach differential co-payments to measures of effectiveness and that sounds like a great idea until you ask ask can you really trust those measures of effectiveness? my answer is it's to variable. new business structures that provide real financial incentives for physicians to rethink thr style of practice that, makes a lot of sense if we could find the right kinds of

structures. i don't think we've found them yet. what about consumers? in the end what's a consumer? it's a patient. i'm a consumer and if i could find the right thing for me today, i'd g out there and buy it and i'd be paying for it with my own money chances are and i'd be delighted to do it. so what i'd like to know wanted to know and what consumers would like to know is not only whoo what is it going to cost me but how is it going toffect me and that's really hard to get an answer to and that is really the y to understanding how technology works. finally what about expectations? i left that here for consumers because in the end we don't change our views about what we demand as an absolute minimum and, rick, i wanted to assure you it's a complete cure immediately but until we get reassurance about those things,

we will not get control over cost. thank you. >> thank you very much, e. as joe said, technology adds both supply and demand and one of of the things we know we have an unending supply of right now are patients with chronic disease. so, ken, over to you to talk about that. >> okay. first of all, thanks, ed and others, for inviting me. it's a pleasure to be here on this panel. great to see everybody that you often don't see all the time so welcome ba to work. i'm having a tough time making the transition myself so i'm delaying this a little t. susan mentioned i'm going to talk a little bit about another angle of this but it's really not unrelated to at joe talked about, as you'll see in a minute. it always fascinated me in health care some of the most fundamental big questions get the least amount of attention in

study. six years ago i went and looked at the literature of what do we know about public data about what's driving the growth in health care spending. one of the last few pieces i saw was a piece that joedid, i guess it was '92, '93, looking at the time period between 1940 to 1990. and if you think about it, that was a very different time period than the most recent experience that we've had. the number off uninsured over that time period went from 19% to 15%. so the amount of induced spending as our whole system changed overtime was roughly rerelated to insurance and demand and innovation. we brought dicare, medicaid on and we had new innovations that

fundamentally changed hough we treat patients, neonatal intensive care units, treatment of low weight babies, treatment for cardiovascular disease and so on. it was a different time period. i'm going to spend my time looking at the time period between the early 1990s and today. i think the point i'll make is that even during that time peefrd the year-to-year changes in whas driving the growth in spending isomewhat fferent. i want to look at the long-term drivers here that are more recent. i've sort of taken -- you can decompose this into a lot of different ways. i've looked at this and tried to sort the data into three buckets, looking at the change in spending linked to the chang in the prevalence of treated disease, looking at the the change in spending linked to how much we spend to treat a case and obviously the interactions

between the two of those. and if you look it-from-the late 80s to today, about 60% of the growth is linked to rising prevalence of treated disease. we'll go into what accounts for that. some of that is going to be good, i'll argue, some of that is going to be bad that we can go in and potentially do something about. so just to give you a sense of some of these -- the magnitude of the changes here u, you can down by medical condition and see the prevalence increases and in each of these condition, the factor driving the growth are somewhat different. if you look at the treatment of cholesterol, mental disorders, those have obviously increased ve dramatically. much of that is technology related. we have new approaches for treat, patients with cholesterol, we have new medical innovations to treat people with

mental disards that we didn't have 30, 40 years ago. diabetes, i'll come back and talk about that, that's almost all incidence increase. it's not anything to do with detection, largely more patients we're seeing with diabetics, one of the key drivers of rising spending and medicare is rising incidents of diabetes and other cardiovascular related incidences. there are enormous increases in prevalence of treated disease. if you take a step back and say what's driving this growth? some of it as i mentioned is going to be things that we should be happy about, some of them are going to be things we shouldn't be happy about. so the first one, diabetes, our detection rates of diabetes really haven't changed much in

the last 20 or 30 years. we're today detecting about 72% of total cases of diabetes. that's gone up from the upper 60s 10, 15, 20 years ago but we're not doing a whole lot better in detecting diabetes so the prevalence -- treated prevalence numbers we see for th are really just incidence increases, not detection increases. the second oneis debatable and controversial but there's no question that over time we've changed the definition of disease. particularly cardiovascular disease. most of the studies i've seen that have looked at that think that's a good thing that, a more aggressive treatment of cardiovascular risk factors has been a leading cause of declining rates of card your vascular mortality over the last

20 years. new medical technologies, the treatment of mental disorders and joe went through that, provide more fools for to us treat pishs that we didn't have and changes of disease. if you look at something as simple as diabetes, that's changed a little overtime in terms of t clinical blood sugar levels that kick off a dying of diabetes versus prediabetes. one of the things that's very different in this time period that we're looking at is increases in obesity. if you look at the 1960s, 1970s, 1980s, that whole time period the share of adults considered obese was about 17%. really didn't change for about 30 years so clearly not a corrector over the time period

that joe was looking at to rising health care costs. it was just not changed. it was a consnt. that's not the case most recently. if you look at the long-term tren here andopefully we're stabilizing it a little bit, it's doubled since the mid 1980s and if you look at some of the calculations that are just linking or looking at hope of the growth in spending is due solely to obesity holding technology constant, holding treatment intensity constant, depending on the time period you want to look at, it accounts for about 7% to 10% of the rise in spending. cbos did an estimate of it and came up with 8 %. of all t things that we can actually quantify, to joe's point, of the things that we can try to quantify, it is an important contributors.

about a third of the growth of medicare spending is linked to cardiovascular conditions that are lifestyle related, diabetes, arthritis, kidney disease, hypertension and mental disorders. the things that are interesting about those conditions in the medicare program is those are largely conditions that are ambulatory treated with appropriate medication. unless you botch it up somehow, with the exception of kidney disease, you really have nothing do with inpatient hospitals here. this is dealing with am latory care, primary car medication management. the ultimate irony of that is traditional fee for servi medicare is really the only major payor, unless you're home bound, that has no care coordination. so it just doesn't do it. we'll tell you you've got a problem in your personalized care plan but we don't have

anything available to engage people in medicare to help them deal with these conditions. as i've entioned, the she of spending increase leaninged to disease prevalence does differ over e period period you're looking at. over the last couple of years, spending per treated case is a more important place but if you go back and look at the long-term trends, it's disease prevalence increases that are driving it. if you try to drill down a little bit more and say, well, we f we can look at treatment intensity, meaning how much are we spending to treat a particular case of diabetes or heart disease over time and how

much of it is just due to increases in obesity, again, holding technology constant, as i mentioned about 7% to 9% is due to obesity alone and if you look at the 1987 to 2001 time period, about a quarter of the growth in spending is due to increases in the intensity of treatment. of how we're engaging and working with patients. now, some of that is due to changes in chnology, clinic threshol thresholds for treatment, inical judgment of how aggressive we should be on treatment. if you look at obesity and treatment intensity, anywhere from 20% to 30% of the growth is linked to both of those two coined. so what are sot of the challenges here? that we face? we know that any given year that

obese adults spend about 40% more in health care and depending on there's a whole range of different estimate of how much is in the base of spending linked to obesity. the last piece i saw was certainly around 20s are 21% is due to obesity alone in the base of health care spending. as a productivity component we spend a lot of time focusing on the health care piece but if you look athe total kors every dollar we spend on the dollar side, we're losing productivity. >> let me go back to my medicare alcohol ng and look at life time health care expenditures and if you compare the lifetime spending of an obese adult

versus a normal weight adult, anywhere from 20% to 40% more spenng over the course of a lifetime at age 65 on medicare. so the point is is that this is a very different story than smoking. smoking is a mortality discussion, this is a morbidity discussion,hat there's not really the huge differential mortality rates linked to obesity. steems to me if you think about medicare, there's two opportunities that i think are important. one is to find ways to change the incoming health profile of people coming into the program because there are long-term potential savings with a healthier population coming in at the age of 65. i'm sure melanie with l talk about this, they're doing a great job of trying to build in

more coordinaon, think about the opportunities of putting into place care coordination inventions. i think in programs like medicare, they enorm as you. mecare is going to spend roughly $ billions on and the frustration is that we actually have interventions that are effective. we have a program that eric holman has developed out of university of colorado denver that has several randomized trials tt shows we can cut readmission rates by 50% to 60%, we have a more advanced nurse practitioner model that comes up with similar results. that should be a major component

that is -- i think there's opportunities here but we have to focus on it would have the problems we can actually do sothing about. one is preventing and alerts disease in the first planned lot to have a discuss and, second ssh to really build into programs look medicare evidence-bas components and care coordination that we basicallhave decades worth of randomized trials that show that they work. things like transitional care, medication management therapy management, health coaching. so we know the elemen that are effective. i think we just need to find ways to integrate them and build them into medicare. so with that i'll keep this short and i really look forward to the discussion. >> great. well, thanks to both of you.

so we now have some time for clarifying questions if people want to ask questions specifically of ken or joe to draw them out on points they made. we don't want to get into a lot of deep analysis of what they said at this point or debate, but just again clarifying questions. if you do have a question, please introduce yourself briefly by name and affiliation and be sure to switch on your mic. let my me take a quick look around. i'll take the moderator's prerogative to ask one to you, joe. if i look or at your slide "high cost of technology" and i look at current technology, i see surgery robot and treated constituent, both of which recent studies have shown do not materially produce better outcomes for patients.

and, in fact, with respect to the treated accident constituenconstituent johnson&johnson stopped making them. that underscores that we have technology that does not produce better results but costs more or could be harmful. the institutes of medical tell us about half of the efforts w engage in, there's no proof that they work at all. i was curious why you didn't put more emphasis as some -- iant to make the somewhat counter point that what we're going to focus on is in fact the treated stent and actually less so the surmgry robot, since that's sch

a great marketing tool for big hospitals and people want to believe that somehow putting a machine between the surgeon and their body is necessarily an improvement. they really would like an improvement there becae they think they could be seriously harmed or killed. but, you know, the fact is that we do have a tendency especially on stents, for example, smaller things, we do have a tendency to look at them. for one reason it's easier to examine the effect of the stent because it is a purpose. it doesn't have multiple purposes. it is less dependent on the skill of the physician to place it for example. there's some skill involved but it's somewhat more singular product that is more amenable to testing. that i think is maybe the point i'm trying to make, that we have a tendency to examine the things

that are easy to examine and not the things that are really hard to figure out. and the hardest thing to figure out are the things that are standard practice. so there's some hope for technology assessment. there's -- in my view there isn't much hope in going from assessment to sound medicare policy, but there could be plenty of hope going from good technology assessment to good professional standards. >> kent, quick question for you. you have used the phrase "treated prevalence" here a lot, suggesting that you're distinguishing between just prevalence and treated prevalence, obviously, we treat people. can you dissegregate those two pieces? for example, potentially possible, we're giving statins

to a lot of people for high cholesterol and there's debate whether that is the correct set of interventions. how much of this is treatment independent of actual prevalence versus treated prevalence? >> i'm confused. >> i'm getting hammered. >> it's not even happy hour. >> are you sensitive about these hard issues? >> well, the phrase for me, treated prevalence is to distinguish the fact that we really are only engagi a fraction of patients that have different conditions. go back to my diabetes example, 28% of people that live with diabetes have not been diagnosed and don't have a medical inrvention. so at some point hopefully they will. but at any pot in time, they're not. so that's the distinction.

the other part of is it, you know, is an important issue. i tried to distinguish in this discussion that there are components of prevalence that we could intervene and do something abouaand we want to, issues around obesity, diabetes and lifestyle, things like diabetes we can reverse the curve on. other components, go back to my slide, look at treatment of cholesterol are hypertension, that are you know a medical call that says, if we are more aggressive at treating those diseases, plus we have the new technologies to do it, that it does produce better value, that we're reducing cardiovascular mortality, improving the quality of life and so on. i think some of the stuff that david cutler and others have done looking at the impact,

hyper tensives and cholesterol are good investments. but those are part of the discussion here, is that we have changed and made a medical decisions and treatment decisions that say if we're more aggressive at treating certain types of cardiovascular risk factors, that they do pay off. >> yes, brad. >> brad stewart, we're building systems of care coordination for seniors. my question to you is, i'm a primary care doc for a third of a century and research as well, all of our discussion -- and i'm coming from a provider place -- is focused on the providers. what about preference of patients, particularly seniors who are in this near-end of life

population where our data is showing now that ty would prefer not to be patients they would like to be comfortable and stable and safe at home, and i think we have systems to begin to do that. but my question around the data is, we have a lot of studies now on effectiveness, in other words, is the treatment necessary and valuable? what kind of data do we have on preference where we know -- we begin to know whether these treatments are actually wanted or unwanted which, to me, is much less controversial than trying to decide what's necessary. you often can't know what's necessary until after you do it and it hasn't worked. it's not controversial to know that people really don't want this stuff and as it turns out, many of them don't. >> that's a -- that's a great question. you know, as i think about these different models of primary care and care coordination, and to

your point about take palliative care and giving people options and decisions about the type of care, how aggressive they wt care to be toward the end of their life, lord knows i don't want to bring up death panels, but yo know, that's a legitimate discussion that needs to be built into thecoding of medicare, needs to be part and parcel of how families and patients and health care providers talk about options. and you know, i think that's a classic example of working with patients to give them options and give them information and have the time to be able to have the time to from a physician's standpoint to ta about that, is important. and we're -- you know i've seen more and more interesting palliative care models k s comeo place. hospice, again, another important component of that. but having the time to have that

discussion in a fee for service systems a real problem. i mean it's just not built into the coding. it's not built into the amount of time physicians spend on counseling with patients on important decisions like that and it should be built into how we think about doing care coordination and primary care with patients to give them options, and then have options out there available. another example on the other side of this, if you think about to me the incompleteness of the medicare wellness benefit, we built in a welcome to medicare physical, we're going to do app personal care plan that says you're overweight and diabetic but we don't cover anything to do anything about it there are programs like the diabetes prevention program that the ys and united health group have put into place that we shown in randomized trials, including community-based randomized trials they generate

a 5% to 7:00% weight loss. that should be an option, built-in to the medicare program that would give people a choice of, geez, if i want to make a difference in terms of changing you know lifestyle or improving my blood sugar levels, that should be a component of what medicare covers. on both extremes we don't give people a whole lot of options because of the way that medicare coverage policy works. >> rick smith. >> hi, rick smith. ken you have references several initiatives around the cluster of chronic conditions that you identified as significant cost drivers. can you speak a little bit to what happens to utization and outcomes as these interventions take place and, you know, how does care change and what is that ultimate will add up to?

>> it's a good question. you can look at the -- look at the prevalence data in terms of how we're treating patients with cardiovascular risk factors and the important questions, what are we getting from it? is it worth it? i referenced david's work on in this and others, i think on balance the more aggressive of treatment of patients with cardiovascular disease is worth it. we're getting improvement in longevity, improvements in the quality of life, that those are investments that not only are clinically driven but generating better outcomes, so that those are sort of parsing my prevalence increases into two components, things that are good increases, things that we want, you know, make investments in, should be happy about, that would be a series of them that we've done on statins and cholesterol and there's a series of prevalence increases that are

bad that we should try to do something to reduce our incident increases linked to lifestyle and diet and exercise and smoking like, diabetes. there are different -- there are different issues how we think about them i think are very different. >> let's see, tom miller. is your head up there? we'll come back to mary ellen. tom miller, a.i. we've gotten good and clev coming up with new names to call chronic conditions, got a code, we can find a technology and bill to throw at it. you have a list of the ones that have had greater treated prefb lens. when you do your time series, what have we had any reduction in, in term of treated prevalence? what's gone off the list. great savings in smallpox. is it an added key to the keyboard? >> that's a good question. we've probroken these into i gu we have 260 that we've looked

at, and i'd say most of them are fairly nstant. i mean, obviously big ones like heart disease and cancer are getting improvements in. the one that has been the biggest decline which actually adds to, you know, actually adds to a lot of the cost is trauma. the prevalence of trauma cases has gone done fairly substantially. that's a big redux. but most of the have seen, you know, fairly substantial increases over time. a lot as i mentioned have been owe decemberty related and a lottery lated to cardiovascular risk factors. i think kind of the interesting thing is, is that if you look e spending growth of the united states, going back to '40s for '50s, not that it's a whole lot difference. it's 2, 2.5 percentage points

above gdp, you're not o of whack internationally either, we have seen differences in what's generating that delta. so if you look at a medicare patient in 1965 versus today, they're very different. i mean the clinical profile's different of the patients. the typical patnt, driving in spending medicare today is overweight 70-year-old hyper tensive diabetic with bad cholesterol, yas asthma, back problems, pulmonary disease and is depressed. those are all conditions that really require behavior change engagement, appropriate ambulatory care, nothing that medicare does. >> let me add something, though. this is a pitch for a technology. one of the reasons we have more treated prevalence on nearly everything is, i's easier to treat. also there's the push for

so-called prevention, which means earlier diagnosis, so it's hard to know where all of these fit in. i do think that the march of medical progress is contributed considerably to this trend. >> so mary ella payne and i think dan callahan has a hand up, as well. >> should we be thinking more about targeting hot spots or targeting populations or targeting industries? a lot of what we generally talk about is broad policy changes in medicare and other areas. but certainly the obesity and other risk factors seem to be located in certain parts of the u.s., i would argue. should we start to focus on those areas and maybe not have across the board sort of improvements but in order to get you know given limited resources to think about that a little bit more? >> that's a good question. i'll give you my pitch on the diabetes prevention program. so here -- we have a population of 80 million people nationally

that are predebettic. we have a program that we know through ten years of clinical trial follow-ups that has accumulative reduction in incidence of diabetes of 34%. it works at a point in time, a ten-year follow-up study that shows over time we can reduce it. united health group and ymcas have put these into place in 25 states. we can reduce weight by 5%to 7%. we can reduce incidents of diabetes in a short period of time by 58. for older populations 71%. that program could be scaled nationally in the next 12 to 18 months for $80 million. not "b," "m." why in the world don't we do that out of the public health fund? that's something that is an investment that we should do,

build that one simple program in nationally, have it available so that small employers could use it medicare patients could be referred to it, and exchanges, plans exchange could refer patients to this. now that's a simple example of something we should be doing because we know it works. i guess my point of saying that is that, we have a whole variety of interventions that would target these programs that i've talk about that we have years of data to show that they work, transitional care models, diabetes prevention program. we need to fliphe switch here and get into implementation mode, not pilot project mode. we're not going to pilot project ourselves into a solution here. i mean, we need to sort of take things that we know that work, target them, to at-risk populations, and we could make an enormous difference. >> that was my point, it's not

doing pa moo more pilots it's a getting package of services that works to people at highest risk and certain parts of the country. >> that would be great. i live in the obesity triangle. if you take the cdc, cdc data on obesity rates over time, looking at changes and diabetes preferen preference, they're the same charts. we have things that we can do right now that would make a difference. you know we just need, as i said, flip the switch and focus on implementation and you can tell from what i'm saying i have pilot fatigue. sure, we need more information and we need to pilot oher different projects but we have so much data on programs that we already know that work, that we should just implement and bill into how we do biness in the exchanges. if you think about on the exchange side something that we're not talking about is that, in the definition of essenal

health benefits, we have in-patient, outpatient usual services but a component of certification for plans to be and exchanges prevention and care coordination. what do we mean by that? what are we certifying and asking plans to do in exchanges on prevention and care coordination? geez, there's really simple things that uld make a lot of sense that we would hope plans would do, like transitional care models and lifestyle programs like the dpp. >> dan cal lanlahan then the rer panel. >> one issue not touched on, how do we -- i'll take ken's example of the 70-year-old withall of the things wrong. talk about coordinating care. how do you assess care with multiorgan failure or multidiseases at same time? we're very good at individual cases but a team of physicians together and trying to

coordinate them,how do they assess the overall work and interaction? >> i'll put my m.d. hat on for a minute. ken, i think this is a great example of why having team-based compare, and if you look at some of the health systems that do, i think, a pretty good job of that, whether it's marshfield clinic or guisinger, where you are building teams to deal with multiple multiple problems and eating patients holestically, is probably the best way to go with this. think about, take medicaid, a good exale, even a medicare when we do care coordination a lot of care coordination segments off of care coordination into different buckets. you'll have behavioral health care contracted out, pharmacy contracted out, acute care. you know dealing with a patient that has all of tho problems.

so even coordinated care sometimes and medicaid is not coordinated at all, fractured. to the extent that you continue to drive this towards payment reforms that really move us towards team-based care, that really engage patients for the whole range of medical problems is probably i think our best bet. it's not fee for service medicare, that's not how that program works at all. >> thank you. we're now going to move on to a series of a short presentations from our reactor panel. these are nonnuclear reactors but nonethess very energized and we'll get through their presentatis i know energetically so we have time for a break and then a beefy amount of time for a discussion. we're going to to start with melanie bela who is leading those efforts at care coordination for the dual eligible population.

melanie? >> good morning, thank you. ed and others for inviting me to be here today. i was trying to figure out why i was invited and i sort of hit me in the face in an obvious way, dual eligibles are the poster children for high users of technology and high cost. and bruce and diane and others i think will get into the statistics around the prevalence of chronic disease. but the fragmentation between the two programs just as ser baits the use of technology and high costs driving the system. so i want to spend a couple of minutes on that theme of what is actionable and talk about a couple of actionable things that we're trying to do at cms to try to get a handle of the opportunity to improve quality and costs for this population. and the first is all about data. and until we understand better this population, the subsets of the population, what's driving their care needs, what the utilization patterns are, by

very discrete subpopulations, we're not going to be as effe effective as we can be in developing new models to improve care coordination, to impro transitions, to improve the use of long-term care services. so there's a few things we're doing in that regard. one is, i'm pleased to say that cms now has an integrated data set, so medicare and medicaid. it's not 2011 unfortunately but we're getting there over time and it's really going to help drive i think our analysis as well as those of others in the room and other interested stakeholders. the second is, we'll soon be releasing state profiles, so it will be a state by state look at the demographics, utilization, the costs, again, for from an integrated data set perspective of the individual whose are duly eligible in the state. it's not meant to compare state-to-state, because we're not controlling for the differences in the medicaid program but again it will be a

useful tool to get out there. another thing we're doing that i think is very relevant to this discussion is looking at the simplest way to call it is a pathway analysis. it's very different if you start on medicaid and age into medicare versus start medicare and have some financial decline that makes you medicaid eligible. types of care coordination models whether someone's care improved by care transitions. all of those things highly dependent on what drove a person to be in the program, what their care needs are, who they trust to get information about those care needs, all very different, depending on which "m" you start with. we're doing a lot of work in that area. la lastly, those who researchers, enhancements to the chronic condition warehouse, we have conditions for diagnoses fo serious mental illness, alcohol use, for intellectual and development disabilities and if we again are going to truly

understand prevalence of chronic disease by subpopulations we have tonight add to diagnoseses in the ccw, particularly those that are going to reflect things that medicare maybe hasn't looked at as medicaid has in the past. so that's a critical part of the effort. as part of our efforts to work with states in the arena, we have been focuses making sure states have access to medicare data for care coordination purposes and tried to streamline a process abiding by confidential rules allows states to access to data. we have 22 state as that have received or in the process of receiving parts a and b, 20 states in the process of receiving part d. when i talk about demonstrations from our perspective, it's crit couple that states are requesting these data to show us that they have an understanding of their population and they can tail their interventions and demonstrations to the needs of those populations and they're

heterogenius care pathways. next thing i mention quickly, along again the theme of actionable, are demonstrations. and i appreciate ken's comments about i think pilot fatigue. we're getting all sorts of feedback on our demonstrations. one is, they're too big,e're move too fast and others telling us, boy, it's about time, can't you go quicker. i would say that certainly i understand the pilot fatigue. for this population we have not tested, there is noest paid for integrated improved coordinated care particularly that that bridges the behavioral health, long-tm services and supports acute and primary. however, there are important components, diabetes prevention, we expect to those things where they are relevant for those populations in the demonstrations. we have a state-based demonstration opportunity right now and that involves two

models, one a capitated model, one is a managed fee for model. we had 26 states interested in pursuing one or both models at this point. some states targeting 2013 implementation date and others targeting 2014 date. i wanto emphasize we expect to see care models and careeams and care ans tailored to the differt needs of the populations and we've not done as good a job of that in the past as we need to. the needs of someone who is going -- the prototypical 80-year-old medicare patient is very different than someone under 65 whose needs are long-term care driven or someone who is inan institution. and so understanding again all of these varieties is a great opportunity for us to test in this -- in these new situations. and then i'm very excited the other demonstration that we're doing is for dual eligible beneficiaries in nursing facilities there arebout a million of them at any given time, avoidable hospitalizations is a critical opportunity for

improvement here. the churn between hospital and nursing home largely driven by the misaligned financing of the two programs is actionable improvement in both quality and cost. cms study showed that 26% of hospitalsization for duals were potentially avoidable and today's dollar that's about $8 billion and it's very poor care for patientsobviously. we have a demonstration going on targeted at bisht yeeneficiarie nursing homes. in closing, i couldn't be a bigger fan of trying to develop evidence based models of care coordination and look agent prevention an area we have not been ablto focus on are the preduals. so the folks 45 to 64 before they're coming on to medicare, there's a huge opportunity for us to do care coordination or medical homes or care management to improve utilization andhe prefb lens and intensity of the disease when they get on

medicare and those on medicare there's a lot to be doing to prevent decline on to medicaid. so far the financing and the incentives betweenworograms haven't supported that work and i'm hopeful that once we kind of get through dealing with the 9 million folks on the program we can shift attention to preduals and doing a much better job of managing d say the progression of folks to duel eligibility status. with that, i will close and say thank you again for being part of the panel. >> thanks very much, melanie. we're going to turn to joe new house. it's often asserted that the u.s. is an outlier in outspending. how big of an outlier are we really if we are? >> thanks, susan. this discussion somewhat reminds me of -- russia mount home. how many have seen it? it's a classic japanese movie

and basically presents four different views of the same reality. i think that's some of what we're hearing here. i noticed in the green book that you were handed when you walked in, there's the usual slide which i'm notoing to show you on page 7 of the u.s. spends a lot more than everybody else which susan alluded to. what's less well appreciated, though ken mentioned it in passing, first slide, is that -- how do i advance the slides? >> right hand. >> the -- what i've done here is look at annual growth rates per person in real health care spending over time. so this is almost 50 years. and the asterisks -- the g-7 --

by germany, italy, japan, because there's strange things about their numbers, not just that they're different. germany had reunification, italy doesn't start until 1988 and most of the japanese bulge is in 1960s, when their economy was growing 11% a year. if i look at the other four, the u.s. actually is the highest but not by a lot. certainly not by nothing like the levels. and then i'd like to go on to say when we participated in the medicare trustees 75-year review, which you may think is a waste of time, but we were doing our civic duty and in projecting 75 years or even 10, for that mat, it's the growth rates that matter. it's the growth rates that are

doing it to federal, state, and personal budgets. i just did some calculation over the weekend of the kaiser data on average family premium against median income, 2009-2010, that went from 22% to 28%. so the average family premium, not out of pocket, so the family premium is now for on the average family insurance policy 28% of median income, which is, i fine, somewhat staggering numb. so the inference i draw from that the rate of cost growth is going to slow down. i can't tell you how, but it is. nothing grows to the sky, is the saying in financial markets, and it's true here. so the u.s. and other countrs -- the other countries are also not so different, at least the k, france, canada.

here the data by time, ken alluded to these two, i've broken things into decades since the '40s. and what you see is you see some variation around that average, but there's usually something happened in those decades that departed a lot from the average. medicare, med cade, managed care introduction in the '90s, the recession in the last decade, but what's remarkable, to me, and the reason i put this up is to give some rspective, that this issue of cost growth is a common across countries and, b, has been going on for a very long time. so what i take from that is that

while the u.s. certainly spends a lot more than everybody else, that must be something that u.s. specific. but the growth issue must be something that's common to countries and to decades. i take ken's point that, what's -- things may have changed over time in terms of what's driving this, but i still think it's important to keep in mind that this is not -- whatever is happening here is not necessarily a result of things that are specific to the u.s., which we naturally tend to get wrapped up in. the second point i wanted to make, which also has been alluded to, wee actually gottenomething out of all of this growth in spending, you know, again the usual line is, we spend a lot more than everybody else and we trail in

life expectancy. but if i look at the change in spending against the change in li expectancy, never mind moth morbidity, things like cataracts and hip relacement, it's a remarkable change since 1970, which looking around the room most of us are old enough to remember, you know my students can't tell the difference between 1970 and 1870 but i can certainly. so what's quite remarkable is that life expectancy is like a lot of other things, subject to diminishing returns, that is, it gets harder and harder to get an increment. and we grew seven years, which is a major achievement, in my

mind, as did other countries. again, this is going on everywhere. no one can say how much is attributable to medical care. well, this is kind of a busy slide, as projected up there. this is a gaph from a study of several trials. it's in your handout. and in -- about what accounted for the change in coronary heart disease. and the darker bar on the left is what these authors attributed to treatment. these e in various countries, not just the u.s. and the lighter bar is h much they've attributed to risk factors but the risk factor part includes the better control of

hypertension and better control of cholesterol, as well as the fall in smoking, which are the three big things in light part there. but the dark part is the higher tech treatments. so the -- and the -- it's the decline according to heart disease, it's almost all of the decline -- the gain in life expectancy in these years. we actually did get something for all of this. now that said, i think you know, what joe and ken have put forward about what to do makes a great deal of sense. and what melanie has said makes a great deal of sense. but i would leave you with the notion that this is a rather -- a pervasive and long standing issue about cost. something is going to make it

slow down, because it cannot continue at historical rates. but how that will happen i am t wise enough to know. >> okay. great. thanks so much, joe. we're going to move now to jim fasules of the american college of cardiology. jim, your chance to explain to us why all of this spending on cardiovascular disease inventions has been entirely worth it. >> i hope so. i want to thank ed and i want to thank mary ella, you're probably as much responsible for me being here as anybody else. i'm not sure that's good until after the comments, okay? i guess we picked cardiovascular disease as the example or the model of chronic disease here. let's me gijust say that i'll g into that but go into the data and take the opportunity to say

what a disease-specific association can do that's actionable in what we've been talking. right off the bat, one thing we haven't talked about cardiovascular disease also has an effect on the economy. a net loss to productivity of anywhere from $300 billion to $400 billion a year in lost productivity. also, though, what dr dr. newhouse's slide the last decade a 30% reduction in rtality from cardiovascular disease, probably from the treatment. i'm going to just say, inhe data aspect, we have to kind of be careful what wepick what population we looked at, one slide looked at stentingversus medical maximum management and that really is in elective case, we're not taing about doing stents in the acute m.i. case, that's proven to be effective. a little bit also about the stents, whether the drug

alluding or bare metal if you look at outcome as mortality, there's probably not a big difference. if you want to look at outcome as whether you need to have another procedure, then there is a difference. so what i'm gettingt the data, and getting the data also to the physicians is very important. one of the things we've done over the last 35 years is develop guidelines that look at the science and try to translate science into what you should be doing. recently actually taking guidelines and develop what's called appropriate use criteria, and we use those appropriate use criteria in five recommendations in choosing wisely which has been mentioned. you can actually set up some continuous quality improvement aspects with the physician. and by giving the physician their data on what they're actually doing and what they see how they're doing against the norms, and whether they're using the procedures, the

investigations, the imaging appropriately, and you can actually get them to improve their care. we found that just giving a dashboard of how the physician ranks against their fellows in their practice in the community and the region and nationally as far as where they score, for instance, on nuclear studies for their appropriate use criteria will decrease their use 15% to 20%. getting down into the range that we think should be aut 8% of what we would label as inappropriate use. now, of course, you can't tell a physician not to do something because it still, i think it's been mentioned, medicine's still an art as much as it is science. but practicing the best science that you can getting e data to the physician so they can make a better decision. part of that also with the appropriate use criteria and chsing wisely is also interaction with the patient. getting them to understand and if it's been mentioned the

shared decision making where you're discussing with them aheaof time options. so take coronary artery disease an elective situation you can mamum medical management, you can have cabbage or coronary booip bypass or a stnts placed. giving them a tool for the physician to see what fits in and what the patient wants as well and helping make that decision. i think that's how we've been looking at how do we decrease the curve. now i would say that, actually we've discussed the cholesterol and management of coronary artery risk disease, disease risk factors, and mentioned california. we've looks at the data on both coronary artery bypass and the stenting for coronary artery disease and gone down all the last five years in california. if you look at cms data, there's

a 10% reduction from last year -- actually the year before to last year for both cabbages and stenting and reduction also in imaging of cardiac imaging and i think that speaks towards the addressing of the risk factors. i'm glad everyone's looking at obesitand mary ellen knows that i've worked on obesity when i was in practice in arkansas. it gets to be quite hard. we were fuelly ll actually on commission that set up bmi on kids in school. imagine when you -- how do it, no one elseknew the bmit home, but we had 33% obesity in school-aged kids and doing measurements, taking vending machines out of school, et cetera wlevelled that. now we didn't impact the 48% smoking prevalence or tobacco use, i guess it was dipping as it was smoking. the other thing is, when you do

action on data and one program i'll mention is the door to balloon, which means from when a patient with acute m.i. hits the e.r., the door to the e.r. until they're blowing up the balloon in the artery to open up the vessel, we know that if you do that under 90 minutes you save heart muscle and as a result you don't have as much congestive heart failure, so you reduce the morbidity. now weent from about a 50%, 60% in the e.r. to 90% of all e.r.s hitting that and hospitals hitting that number, and that probab probably saves two to three days of hospitalization and also puts the patient back to work after three to five days as opposed to what we mentioned when eisenhower had his heart attack and admitted to fitzsimmons army hospital he sat in the hospital

with little heparin and prayer. they have a little room for where he was at t hospital there now. but where do the savings go? the cardiologists didn't get paid anymore. here's program that actually had savings and we still haven't figured out whether they were -- the hospital got them through drg or the insurer got them. whatever we do with the models we have to look at wt joe said, there has to be some incentives built in so that if you are doing this extra stuff or paying for this data, and finally the other thing we have the registries that we can actually track outcomes. maybe when the electronic health record gets to where it should be, we can do it that way. but data, disease specific, procedure specific outcomes over longitudinal time and that really tells us, someone

mentioned in the trials, they tend tobe like most of us up here, middle aged, bald, white males. not all of us. but we are the- obviously the trial, the pple in the trial. and we don't reflect the makeup of societyut with a registry you see actually what we're doing and how we're treating. data, data-specific, give gate da data to physician so physician can act on it and greater physician and patient interaction and shared decision making. thank you. >> great. thank you, jim. diane rowland, in our capacity, both at kaiser family foundation and mack pack, you've been thinking about high-cost patients and challenges to delivering coordinated care, improving health outcomes and lowering the costs. so tell us about that thinking. >> thank you, susan. i think i can just do it with

this. this arrow? >> well, i always come to these forums and we talk a lot about the medicare program and sometimes we talk about private insurance and we don't always when we talk about health care costs bring the medicaid program into perspective. i just wanted to remind us about why medicaid takes care of lot of people with chronic illness and why it spends a lot of its resources on that population. and of course, this is our most classic slide, showing that one in four beneficiaries on the medicaid program are disabled and elderly but accnt for two-thirds of the spending. and a large reason for that, of course, is that there is a lot of long-term care expenditure on behalf of the populations. but let's focus for just one minute on that under 65 disabilty population for medicaid and we like to talk these days a lot as melanie mentioned about the duel

eligible population. there are 9 million people with disabilities on medicaid not elderly and mote of those people are actually not dual eligibles, only 2 miion of them aredual eligibles. one of the challenges in the program, and ken alluded to it to get better coordinated care, better services to the disability population for which m medicaid has whole responseabilty and where it has a range of services, care coordination, case management or part of the medicaid benefit package, and could be much more effectively used on t pop population with disabilitiedisa. this is a slide,er we're used to seeing in every part of our health care system. there's only a few people who account for the majority of any spending. and in medicaid the top 5% really account for a substantial share of that spending and the few people there that are

children and adults are relatively small but high cost. really there is largely driven by the disability population. when we think about the disabled on medicaid we haveo remember they include substantial share of the population with severe mental illness and it's often when you look at who is a high cost beneficiary, it's the combination of one or another of the disabling conditions combined with mental ilness. and so a diabetic, i think ken looked at this, someone with diabetes is being treated with a mental illness is at a higher cost and less likely to follow treatment protocols than someone who is just a diabetic. so that is a real challenge and especially as ken even alluded to, much of the medicaid care coordination through managed care carves out mental health and manages it totally

separately, and now much of the drug costs is also carved out in many places, so that you don't have the integration for that disability population that could help. but we are focused increasingly -- i have to make sure i get the right arrow -- increasing today on the share of medicaid spending that goes for the dual eligible population. and as you see from this slide, there are about 15% of total medicaid enrollment are people who have both medicaid and medicare coverage, but the -- and they account for 38% of overall spending. and a huge part of that is long-term care services. but i'd like to point out really if you're trying to manage that low income, disabled population there's another 10% of the medicaid population that are disabled and a few nonmedicare eligibleaged that account for another 28% spending.

so i would say within the medicaid program we really need to look at how to really better manage and actually there's a -- an ability in medicaid to do more on the preventive side, more on preventive services, more sending people to treatment programs like the diabetes management program there's. so the opportunity within medicaid is broader. and finally, though, if we look at the people who are dual eligibles, they really have a substantial share of chronic illnesses, 55% of three or more. i also think that a lot of medicare beneficiaries have very similar levels of functional impairment. i mean, it's different but it's not so substantially different on chronic illness. it really involves really thinking about how you manage the cognitively or mentally impaired pause that's where the biggest difference between the dual eligible population and

other medicare beneficiaries occurs. so in conclusion, we're really now looking at -- and melanie's alluded to being able to put together medicare and medicaid spending. in this analysis with the urban institute, within the dual eligible population are there some higher spenders and some who are lower. and we found if you lookat top 10% of medicare spenders and 10% of medicaid spender there's are somewhat different people though both dual eligibles and only 100,000 people fall into the category of being a high spender in both medicare and medicaid. and that's largely because, as we need to look forward at diffent ways to look at these populations, the subgroup analysis which melanie alluded to is so critical. you see that the top spenders in medicare are really top spenders

because of their acute care utilization and those are services that medicare can and should be ableto better control whereas the top spenders that end up on medicaid are often in nursing facilities and are also people who are using long-term care services in the community. and they actually spent a little less on acute care because their big spending is on long-term care. in conclusion, i think as we look at and try to figure out how to better manage both technology, where there's not a lot of it unfortunately on the long-term care side, so most of the technologcare would come in looking at acute care services we need to also think about how to manage different types of chronically ill patients and how the two programs can either work together better or work better within each program for the chronically ill. and i think that's where we will see betr outcos and lower costs if we can really zoom in on the disability populations and the differences by subgroup.

thanks. >> thanks so much, diane. well, bruce chernof of s.c.a.n. foundation, wuf been thinking a lot about the same group that we've been discuss, those with rising preference of chronic disease and the age. what else do we need to know about this population? >> thank you, susan. i want to pick up on where diane left off. i think the last couple of slides are incredibly important in our thinking here. and as we wait for the slides to come up, we're almost there, folks, that looks good. terrific. so as i zbbegin my presentation wanted to start in a similar place, which is that you have to really look at the folks who are getting care and what their needs are, and that really helps

us think about targeting and building better programs. and i think building off this notion that the medicare and medicaid high spenders are different is a critically important thing for everybody to take away today. and my first slide sort of picks up on that point which is, those with chronic conditions, that's only hal of the battle. those with chronic conditions and functional limitations together drive a lot more of the high cost medicare spending, and will it come to why that is in a second. we spent a lot of time talking about people and their diseases, being defined by your disease. well the reality is that, function is an incredibly important piece this, your ability not only to care for yourself in a medical context but care for yourself in a personal context. and when you start to factor in this notion of function, function in the way you live your life, not the way you live your medical life, i want to pick up on something joe said at the very beginning and turn it on its head.

consumers aren't patients in waiting. patients are people in waiting. trying to get back to the pla where most people, even those ce chronically ill, those who have cognitive impairments or serious mental illness, they're people most of the time they spend their time out and about in the world and that world is not confined by hospital beds or doctors offices or triage centers. thinking of the role that function plays in disease and thway that function plays a role in people's lives is incredibly important if we're going to look how we build effective programs and target appropriately. and this chart simply goes on to say that when you add in functional impairments, regardless of the number of chronic conditions, functional impairments is a really important cost driver in the lives of with chronic illnesses regardless of the chronic conditions that they have. again, echoing off of diane's

point which is how do medicare and medicaid hold hands? i know why you're here, it's this slide, who are theuals who are the preduals and what this slide start to raise is this issue of preduals what is a good dual program look like? when you look at individual whose have chronic illnesses and substantial functional limitations, half of them are duals but roughly half of them are not. these are folks who run the risk of spending down, because their medical problems get them by the tale and becoming duals. in an environment as we watch boomers start their retirement, we see folks with fewer financial resources and they might have had earlier on, this becomes a critical problem sway cost driver over the next 10 or 15 years for us. so when we in the s.c.a.n.

foundation talk with folks about what they really want we deced that we would do almost 20 focus groups across the country last year and a series of polls, and what we did was to choose to talk with individuals who are 45 to 65 and really in a care giving role and throws 65 plus who are either care giving or care receiving. and this represents a word cloud that sort of looks at the most important language that folks used. and i think it's really important that we look at this because these are all individuals who could exquisitely describe either the care giving or the care receiving processes. and you know i'm a general internist by training, i love the medical system as much as the next guy but i offer there's little medical stuff on this slide. with all due respect to a lot of the great programs we've built, you don't see this riddled with disease managemen pal laive care, hospice, it kind of go backs to my earlier point which is function is incredibly

important and individuals define themselves by the function they retain. if you look at the words that are up there, like community and independent, i mean that's how people think of themselves and so as we start to think about the kinds of solutions that we want, where does technology fi why is this a technology talk, i want -- i want to leave you with a few points. i think the points really are that you have to ask, what's the problem that we're trying to solve here? so there's very little evidence de -- picking up on a point -- surgical robots add much value. the reality that is surgical robots, at least at this point in the time for the data available serve a marketing problem for hospitals. it's good to say your a robot and surgeons love them. it actually is kind of keeping your medical staff intact. that's a different problem. solving a marketing problem is

way different than solving a clinical care or care coordination problem. when we start to lookat population that has substantial medical problems but substantial functional limitations, thinking carefully then about the problem you're trying to solve is key and it really may be that it's more of a low tech solver. so what's the role of the telephone and the pieces of technology that do work where there is evidence? remote patient monitoring, places where a little bit of technology, a small investment can go a long way. if we're going to introduce ex-technology, what is the problem we're trying to solve with it? the second thing about technology in this environment, in the environment that diane described and i'm trying to build on, technology is not an end-to-end solution. technology rarely solves any problems in the seriously chronically ill functionally limited person's life. it is a tactic, not a strategy.

so at the end the day, to just introduce a piece of technology is gog to get you nothing but costs, and actually may be more risks than benefits. most older individualshen they get sent home from a complicated hospital stay get technology, the dme comes out and drops something off. if there isn't a substantial and robust plan, that piece of technology may bring more risk than benefit. and so i -- it kind of gets to the point that technology without a good care coordination plan is of questionable value. i think that as we build systems, and really melanie, as we thinkbo the work that you're doing in the care coordination office, it's not just about the medicare model of care in that sort of nice model of care way we like to think about it. it is the model of care coordination and person centered care coordination that is going be at issue here. as you look at the states who

are proposing, you know we would encourage you to look hard at not just is there a planor the pills and the this is and that that thes and ins and out of the nursing homes but what is the land that supports people'goal of retaining the function that they even if they have serious illness or functional loss. my last point,icking up on one of the comments in the aud yent is this issue of targeting. targeting is really, really, really important. and you're not going to solve again, i think diane's slides hint at this, for the high spending medicare population, you know, medically oriented solves are going to take you a long way. and so the nice article publisd in health affairs that cover the datamake the observation that's a place where a medical home may make a lot of sense. you folks with lots ofoctors and nurses and pharmacists and others and coordinating the medical cats is half the battle. that's a good place to start but

for the medicaid population where the needs may be more functional and community based, theodel of care may look very different and the medical home may not be the solution because the problem with the medical home is, you know, we're glad to talk to you in a medical context or come right in, we have the same-day appointment but for somebody's needs socially related being drawn into the mee solution. so we really encourage that technology to be used in a targeted fashion. and that, you know, what is the problem you're trying to solve, are we really looking to solve a medical problem or a funional problem? thanks. >> thanks very much, bruce. and now to susan reinhart, now that susan that we know who the chronically ill are, that their needs are not all the same, and we talked about consumer engagement or patient engagement or person engagement, and shared decision making, how do we bring all of those things together? >> thanks, susan.

i figured you left the best for last because you wanted the patient perspective, which i'm happy to try to bring to this discussion. can you hear? is this on? okay. so what i wanted to talk about is this idea that i know ken does such a great job in all of this work, talking about the need for better patient and family self-management, and the need for tools for that. so as we talk about who are the chronically ill, how they're spding their dollars, the technology that is certainly has to be used by the patient and family, what are the patients telling us in any model that we might develop and use? and so, couple of years ago, we at the public policy institute at aarp conducted a national survey of both patients and family caregivers, asking -- and these were people with multiple chronic conditions who had experienced transitions, so that's the focus this work. and we talked about what their

experience was, what their concerns were, and just to cut to the chase, many of these patients, and caregivers, talked about poor communication. so as we're talking about technology, and the use of patient self-management tools, many of them didn know that they even existed. so here's some of the data i just wanted to share with you, that i see as the challenges for what, at the end of the day, we have to confront. which is, you know, one in four lack confidence in the health care system. they may love their doctor, or their nurse practitioner, but the system is very overwhelming to them. we know from other litature that the average person on medicare has two primary care physicians, and five specialists across four different practice settings. so, that's a little -- a lot to take on, and to have some confiden that this is all going to work together. 30% said that when they went to visit their doctor -- usually their doctor, that there wasn't

enough information there to even have a conversation. family caegivers particularly felt that. 21% said that providers do not talk to each other. and this is where it really gets to be very tricky. so we talk about adherence. how important it is that patients adhere to their medical regimen but they get conflicting information. one in four are saying they get different information from two or more clinicians, and that they feel their own health is suffering because of that. now this is the one that really got me when i saw this. 27% said they admitted this, this is an admission on a survey, where you know, usually you don't want to admit thing that you're doing and these folks are saying they had not done something recommended by a health care professional like get a prescription. so in other words they why nodherent. most of them, 32% said they didn't agree with what was being told. now we need much more work. and maybe some in this room know that there's more work on this.

i certainly want to drill down into this. but it's a serious problem. we know, for example, adherence, that more than 30 years of research that i've seen on community dwelling elders and prescriptions for them, about 25% ofhose prescriptions are inappropriate to begin with. and we know the polypharmacy is a huge deal. so my argument for years has been maybe it's a good thing that many of these people are nonadherent. they may be saving their own lives. so i really think whatever we do, we've got to be talking about this in a way that makes sense to people. we also don't talk i didn't hear anybody talk about health literacy, for example. and a w years ago that was really hot. i think we've got to come back to the hot health literacy issue. i remember one of the cases that i think it was a pfizer study that looked at this, was a woman who, isn't necessarily a chronic care condition, but a woman who was taking care of her child who had an ear infection.

and kept coming back and the ear infection was getting worse and worse and was the liquid antibiotic, which she was putting in the ear. instead of the mouth. becae nobody showed her -- she figureear infection, you know put the medication in that. we also know from the work on hot spots, for example, in camden, that there was a gentleman there, many of you probably know this particular case, i think it's very telling, a person who -- a person with diabetes who kept coming back into the e.r., there was a certain pattern, and what's going on herein finally someone said well let me see you give your insulin. now why that wasn't done years before is beyond me. but, that's the nurse in me i suppose. but what he was doing was putting the syringe -- he had the bottle on the table, putting the syringe in and pulling up, instead of flipping the bottle, so in other words, in the beginning of the prescription he was probably getting the insulin he needed but as the insulin, you kno as he kept -- then he was just getting air and

injecting air. so there was like a big revelation. well now we know how to manage this person's condition. so this, to me, is getting into a health work force issue. as well asealth care delivery. are we getting participate tory guidance. which used to be fundamental to the art and science of health care. we keep talkinabout the technology. but there's an art here, very deeply involved in communication. and culture. and outside of hospitals what goes on. we used to do anticipatory, you're going to find this is what's going to happen and when this happens this is what you should be doing. and we also used to do what was known as teach-back. so let me tell you how to do it. now show me how you're going to be doing it. these are really basic interventions, ken, when you're talking about. these are basic skills that seem to have been lost. we did a focus group with caregivers about a year ago, these were diverse caregivers

and this is not uncommon, this is a gentleman, federal worker, pretty high level federa worker for a number of years, etired, went to take his mother home, he's the caregiver. went to take her home from the hospital and they said you're going to have to give these injections. nobody showed him how to give an injection. he thought okay, i'm just going to go home. they were abdominal. must have been like heparin or something, right? so he goes home and starts giving this, bruising the whole body, not knowing what he's doing, and wound up taking her back to the hospital, in which case the health care team in the emergency room said, what have you been doing to your father? this is the experience of family caregivers. well, it might have been good if you show me how to do this. there's a lot going on, i think, with trying to get to that point where we're talking about confident, knowledgeable, skilled people who can be engaged, but they've got to better understand what's happening to themselves so that they can do it.

>> well, with that, miraculously, we have ended this part of the program, almost exactly on time. so, let's take advantage of that and get started and go to our break, and then we'll come back for a very vigorous discussion where we try to knit all these perspectives together, and get to some more discussion about actionable solutions. so, enjoy the coffee break. see you back here in 15 minutes. 10! okay. ten minutes. >> he talks about what the sec is doing to police wall street including preventing