using at the company promoted it and sold it and induced others to buy it through kickback schemes and other inducements to treat the elderly who were suffering from alzheimer's or other forms of dementia, to treat children and to treat the disabled. when you promote drugs for purposes that they are not intended for and have not been approved by the fda, we don't believe that is a violation of the first amendment. >> isn't this off label marketing? that's exactly what it is, isn't it? >> what we are prosecuting is promoting drugs for purposes that have not been approved, that have not been shown to be safe or even effective. that's what this case is about. >> the statute requires that for intended uses, the labeling for the drug provide directions for use and reflect any restrictions.

what we are talking about in this case involves promotion for intended uses without the required instructions for use that the statute mandates. so that is the nature of the claim here. >> mr. attorney general, there are lots of questions about the shooting at lax on friday. what is the latest understanding of the investigation? do you think anything could have been done to stop this in the future? >> the investigation is underway and part of that investigation will be a review of the security measures that were in place not only at lax but also a review of arrangements that exist at other airports. the function of tsa is to ensure

that people can board planes safely, take flights safely, the responsibility for protecting airport security is not a tsa function but something we need to examine given what happened in los angeles. >> would you say there is a sort of anger at the government that was behind this? >> that is one thing we have to determine is part of the investigation. there have been some plumber larry things we have learned. -- there have been some pulmonary things we have learned. we have to get a full picture of the manning custody of understand what his motive might have been. it certainly does not justify the killing of a brave tsa injured or others who were injured. no feelings of the government could possibly justify these kinds of actions. >> you are scheduled to go to trial interior weeks over the the merger of american airlines and united. how will you settle this and what are the expectations?

>> this is a matter that we have been in touch with the industry, with the airlines that and express concerns about the potential reduction in competition that a merger would potentially impose. i'm not going into any detail of the discussions that we are engaging in but i will say that they are ongoing. what we have tried to focus on is to make sure that any resolution in this case necessarily includes divestitures of facilities at key constrained airports throughout the united states. that, for us, is something that has to be a part of any resolution. as i said the conversations are , ongoing and we hope we can resolve this shorter trial. short of trial, but if we don't meet those demands, we are fully prepared to take this case to trial. >> this involves more than 1000 routes.

are you willing to go for a settlement that potentially has a lower number of routes? >> our concern is making sure we look at, as we do in all cases, the that we bring benefits to consumers. we alleged in the complaint our concern is that we have had. a number of ways we can deal with those concerns. we will see what the conversations bring but we will not decide on something that does not fundamentally resolve the concerns expressing complaints and do not substantially bring relief to consumers.

>> is there a magic number of slots you made from different airports? >> yes, there is, but i won't tell you what it is. >> a real quick question on the surveillance issue -- there has been a lap over the last piece of week or two, u.s. surveillance practices. about 80% of the work agencies like nsa is outside the u.s. and is not governed by statutes. it is governed partially by guidelines that you or your predecessors put in place. are you looking at whether those guidelines provide any reduction any protection for foreign nationals? can you give any assurances abroad that the government is not doing this willy-nilly? >> as the president has indicated and he is right, we are in the process of conducting a review of the surveillance activities to make sure we are striking a balance to keeping the american people safe and their allies safe. and also guarding the civil liberties and privacy of those same people. we are in conversations with our partners in new york and other parts of the world to make sure in europe and other parts of

the world to make sure we strike that balance. simply because we can do certain things is not necessarily mean we should do these things. i think that is the chief question that has to be resolved. it is almost a cost-benefit. what is the benefit we are receiving and what are the protections we are generating against the privacy that we necessarily have to give up? that review is underway and it is thorough and the president is fully engaged in that review as are other members of the national security team. i would expect that in a

relatively short period of time, we will have announcements to make. let me emphasize one thing, the concerns we have here not only with american citizens. i hope the people in europe will hear this. people who are members of the eu nations are concerned. our concerns go to their privacy considerations as well. we are looking at this in a very holistic way. >> and you -- can you help the american citizens understand why a healthcare fraud case can take so many years? the complaint was back in 2002. can you help the average person understand why it takes so long to get here? >> my own experience has been that these are complex investigations that require huge amounts of research, lots of documents that have to be reviewed and great numbers of people who have to be interviewed. it frequently cross jurisdictions.

you want to make sure that you investigate these things as early as you can to make sure you understand in its totality, the harms or potential harms that have occurred or hold accountable corporations or the institutions and all of the individuals you possibly can. >> unless they go to jail, will this just be considered a cost of doing business for big corporations? >> given the magnitude of the settlements that we extracted and also the ongoing nature of the monitoring that is done is part typically of these resolutions. the conduct and cultures tend to change in these companies. we worked through these to make sure that which happened in the

past does not happen in the future. >> i think what you have seen in the last 4.5 years increasingly from this department of justice and for -- and from this attorney general is in settlements like this and resolutions like this with nonmonetary provisions which seek to change corporate behavior. you have some very specific provisions here. they talk about changing the compensation models for the sales force, changing some of those incentives, actually try to change behavior. the magnitude of the final -- of the fine and the penalty speaks for itself. in addition to accountability, i think we are looking or did terrance. -- did terrance. -- deterrance. in civil settlements, you will have an acknowledgment of fact. as we think about how best to resolve these types of cases, we are looking for ways that will change behavior as well as demand accountability. >> would you give us an up date on the discussions with jpmorgan chase? we were expecting a settlement

for have to come quickly but there seem to be sticking point. can you tell us what they are? >> what were you expecting? that's still an operative phrase. the associative attorney, tony west, has been meeting in connection with these conversations. they are ongoing. i think they have been productive but i don't want to get into the nature of what we have been talking about other than to say that i expect one way or the other, we will resolve this soon. we will either have an agreement or we will be having a lawsuit. do you want to elaborate? >> we are not in a position to

announce anything today. >> hold on -- are there other questions? >> i cannot help but note it was was almost four years ago to the day that -- do you think the prosecution would have been over by now? >> that's a good question to ask. what we have seen over these past four years, not to be egocentric but i was right. i had access to documents, files and recommendations by the military, u.s. attorneys offices and the eastern district of virginia and the southern district of new york. i think the decision that i announced on that day was right. i think the facts and events that have occurred demonstrate

that. i think had we gone along the path, we would not have closed down half of manhattan or caused $200 million per year. -- it would not have cost $200 million per year. the defendants would be on death row. we, unfortunately, did not go down that road for reasons other than those connected to the litigation, largely political. i think this is an example of what happens with politics and when it gets into matters that should be decided by lawyers and by national security experts. >> which brings me to libby who is being tried in the federal court.

how long do you expect that trial to last? what are your expectations for the cast -- for the case. >> that is a pending matters or want to be careful about any comments i make. charges have been filed, very serious charges. the defendant has been charged with participation in a worldwide conspiracy that has a number of separate acts including the bombing of our embassy. it is our intention to hold him totally accountable as we have others who were part of this conspiracy. i think the process we used, we were able to get intelligence from him and still have a viable street case and that's an indication that article 350 is an effective tool to hold people accountable and getting intelligence from people who

possess it. >> how long do you expect this process to last? >> it should be just as long as. if you look at the history of article three prosecutions, you'll see they don't take nearly as long as those that occur in the military system. which is not to say that some cases should not be brought into the military system. if you look at the hundreds of cases we have wrought in article three courts, we have shown we can be effective and they can be done relatively quickly and we can get results that are consistent with the facts. we hold people accountable. >> on the boston marathon case, is the justice department going to go for the death penalty in that case? >> we have a process we have to follow.

we have united states attorney from boston who is part of that ross says. a recommendation will come from the u.s. attorney. it will go through our capital case committee. it will go to the deputy attorney general and finally, it will come to me before i make the determination as to whether or not we would seek the death penalty. >> have you made a recommendation, mr. ortiz? >> the process is ongoing. >> mr. attorney general, why haven't charges been filed against george zimmerman yet? >> the case of george zimmerman and what happened there -- i think a substantial part was resolved in the case that was tried. the inquiry reviewed and we are still doing an investigation. i'm not sure how much longer that will take but and we get to a point where we are able to make a determination, we try to construct the case and i way that we can share as much information, not just make an announcement but share the information with regard to that determination. >> one more? >> ok, one more. [laughter]

>> there is a senate hearing on prison reform. what would you like to see congress pass to change the way the present system is? >> i talked about this in san francisco in august. i thought the system was broken. i did not mean to imply that i was only talking about the federal system. we have problems that go further. i think we need to come up with ways in which we hold people accountable. we also need to come up with ways in which we prevent people

from coming in -- becoming involved in the prison system. there are people who have deficits and are in the system so they can be made better and ultimately released and become productive citizens. that's why we need to focus on reentry. we need to have sentences that are, i think, consistent with the conduct the particular defendant is convicted of. i think there has been a tendency in the past two mete sentences that are frankly excessive. at this point, given the resource constraints we have, i look to the justice department and the amount of money federal prisons consume. we have to rethink our priorities. we never want to put states at risk without showing you can come up with substantial reform and keep the american people safe and do things in a way that is different. i would hope congress would look at the experience of states and look at the proposals and make those 21st century changes that i think we need.

>> thank you very much. >> thank you. >> coming up on c-span, a discussion on how him plummeting before double care act can change a hospital to business. and later a look at the 2008 financial crisis. >> on the next "washington to brian we would talk moulton about legislation that would ban work place discrimination. they look at the history and roles that third parties have in american politics. our guest is charlton college professor and author david gillespie.

>> as a pakistani, i am concerned about pakistan. i want good relations with but not just out of love and caring for the united states, but out of love for pakistan. pakistan has to understand and realize as a nation that nor the nation can stretch your and make your size bigger than your neighbor. , sizes and advantage to india. echostar music it over one thing and be happy with the security with india as long as there is no attack from india. has nuclear weapons and india has nuclear weapons and the security has been achieved. pakistan can address its economic dysfunction. 40% of children don't go to school. make sure that pakistan's

population does not continue to rise at a pace is much faster than the pace of its economic growth. and of those things can be addressed just by building relations between an american military personality and the >> hussein had ofnie on the painful history pakistani american relations. sunday night at 9:00 on afterwards. just part of book tv this weekend on c-span two. up, a conversation on hospitals and the new health care law. former senate majority leader bill frist, was is also a surgeon, and health secretary donna shalala. report"ws & world hosted this forum.

>> hello, everybody. for coming at the time i did. i was posted below bit earlier and the lesson wanted to do was to follow topi on the podium. i'm delighted to be here because this is such an important part of what u.s. news & world report does a more just to try and provide a lot of information of high intellectual content activities that is almost sovailable in the country obviously we hope this will be an exciting and provocative forum and we certainly couldn't have asked for more impressive and distinguished group of speakers and panelists. it is like looking at a who's who of hospitals. i rushed to get here and i want

to thank all the people who have taken time out from their busy schedules, which for many --ludes little league literally improving lives and saving lives. the hospital industry is undergoing momentous change in response to dramatic shifts in their patient populations, , a chaotic and often obsolete financial structure including a payment structure by the government and increasing demand for both peers and government regulators. all this is going to be complicated and compounded by the affordable care act, which will provide access to care for minds of people who were previously uninsured, not to mention that simultaneously demand lower costs and all of the above will have an immense effect on medicine and healthcare delivery. i have to confess a spent the entire weekend try to decipher all the things that are going on with what is now called

obamacare. it was not easy and i'm still not sure i got more than a couple of inches into this problem. i've been writing about it all weekend and have to say to you i am unbelievably nervous and uneasy about what is going to do to the world of healthcare. -- focus on the cost of health care, but i'm not sure in which direction. it is going to be on somebody's agenda as we go forward because of a demand of government on federal revenues. think of how much welfare and medical services consume. news more than half of the federal budget and it does no surprise to his audience at healthcare programs take the biggest chunk. in 1992, helped her programs constituted 14% of all domestic spending, according to the

bipartisan policy commission. laster the to 22%. in 2022 their projected to represent 32% of all domestic spending. quite simply, this is unsustainable. our outcomes are not terribly good. ourpend basically 18% of entire national income on health care. the rest of the world spends and suitably less than that. most of the comparable high income countries spend as much as one third two half of what we spend on a per capita basis and with outcomes not worse, in fact they are better according to statistics that i've seen. the longevity of people on the approach 70 and how many years , and the have after 70 health care for infants. we have the highest quality medical care, but it is not distributed in a way that i think at this stage of the game will remain acceptable to the american people.

one of the reasons, of course, is not why orsue how we got to this point but the fundamental fact is that the government has forever under mastered the cost of staying healthy. when lyndon johnson signed medicare into law in 1965, it was estimated to cost $12 billion per by 1990. -- ectual price chart price tag was much higher. i could go to different dimensions like medicare, medicare is an medicare part b. we're going to look at a level of cost that ultimately is going to create a huge backlash in the country. we're going to have to find ways of reducing the burden on the people by and on our insisting on payments from people with higher incomes or assets and perhaps by raising the medicare eligibility age in the population that is living longer and longer. if you saw the old account today, the petite --

particularly among the elderly. they're totally opposed to anything like this. given the nature of our political system is hard to see anybody today in national office is going to take the lead on this thing in an effective way and make changes we all know we need. there are many programs that seek to change how dark is an hospitals are paid to keep these costs under control. on the theory that there should be a way of rewarding them for quality and efficiency. has beenof change slow. according to a recent analysis by the nonprofit group catalyst for payment reforms, roughly 11% of healthcare spending last week by employer-sponsored plans was based on values as opposed to the volume of services performed. as the head of the group was quoted as saying, nine of every $10 that was paid into the healthcare system with no attention to whether or not the care was performed well or poorly or whether it was appropriate in the first place. there's a focus on the traditional fee for service model which accounts for the other 89%.

the argument is made that by paying a fixed price that ignores results. 156problem, too, is that million people in america are covered through employment-based health care programs. the healthcare benefits that they get are basically nontaxable, either in terms of personal taxes or and excise taxes there is therefore there is a comfort zone with that is going to be very difficult to penetrate. we don't know yet whether again, there's ever going to be a kind of resolution of this frankly until there is a crisis, some kind of fiscal crisis that may force are public leadership to react. many of you here in the world of hospitals know of our pioneers in healthcare and our focus on are moving the incentive for inappropriate treatment. this certainly is going to help move the system in the direction it needs to go. a natural results

and to the value-based approach for hospitals fear they will be paid less to deliver better care. sooner or later there's going to be a popular uprising over costs that will force change and probably force it in unacceptable ways. the hospital tomorrow is just going to have to adopt some of these ideas and others will copy the leadership of these hospitals, otherwise the prognosis in my judgment is grim. there will be a new order that will call for a major healthcareng of how delivery is organized, measured and reimbursed. this transformation is starting to take hold and is recognized by almost everybody, including and especially the cleveland clinic, where changes have already yielded gold improvements. around the country, mourn more hospitals are developing these disease has met programs for the chronically ill and implementing prevention efforts such as outpatient programs for asthma, diabetes and weight loss. simultaneously, high-powered computers are doubling up

billions and billions of pieces of data from healthcare records and insurance claims, from vital signs to medical images. you are breathtaking, some hospitals are using the data to identify those at risk for disease and offering personalized treatment options. one example of this is illustrated by the strides personalized medicine has made safari cancer. the overall potential here is a norma's. technology could he will help. the change may be certain, but the landscape ahead is unpredictable. in fact, i think we should all buckle up for a rocky ride, particularly if this becomes a political football. for a reform to be effective it needs to be planned, managed, scrutinized and fine tuned. not once, but continually. that is a big part of the reason we're all gathered here today,

to learn from each other and about how to adapt to what will surely be a new reality while maintaining the same high quality standards that propelled many of your institutions to the top of the best hospital rankings year after year. say is that i can since those of us who are basically amateurs about this who just look at it from the perspective of public policy is what worries me about the politics of our country today is that it is so easy to manipulate today,itics of our time was easier than it has been in decades in part because of the social media not transform messages virtually without editing, virtually without the ability to critique them and yet have an enormous impact on the growing audience of younger people, who sooner or later are going to be in a position to dominate our politics and our public policy. those of us who are in print journalism have had a certain amount of experience with the transformation from print to these new platforms of the

dissemination of knowledge and information. the fact is that the kind of responsibility we like to think that be imposed on what we published frankly is just not the same on those platforms. so you're in a position now where it is going to be a very different kind of political atmosphere and sooner or later is going to have a big effect and may be a negative effect on the way we form public policy. i urge you all as a group to really think about this and find some way as a group to come forth, if this is possible, with some kind of program that has a chance of developing widespread support. we needed, i think you needed and certainly the country needs it to thank you all very much for your time and attention. [applause] and thanks.nk you this is an amazing group of folks appear sometime to get right to it.

before i get to the topic at hand which is the hospital tomorrow, i did want to miss the opportunity, given the fact that i'm sitting next to some amazing people. i couldn't be better positioned. toonder if you might venture give a great to the implementation and how might that be improved? >> am glad i met with cardiologists. it is >> is been very tough. if we know anything in this country it is how to do software. look at the states that are doing it themselves. they are registering people and already have a platform for medicaid so they are registering hundreds of thousands of people for medicaid.

the problem is we don't have enough of them. those running their own exchanges are registering people on medicaid. i think we have enough time to get it right. we must get it right to get everyone enrolled. there is no way we can continue the way we have been going on. everybody has to have decent insurance. it has to work. justechnical problem's are that. their technical problems. i haven't heard anyone say they are design problems, fundamental design problems, we know we have large numbers of uninsured, we know we have to get them insurance. we know some of them need to be subsidized. at the end of the day, we're just going to have to get that done. i happen to think there's enough time to do it by march 1. >> of enough anyone else wants

to give a grade. i would just turn attention away from the hot topic of the day and get us to the hospital tomorrow. dr. evans, one start with you. "theteresting thing in post" this morning, it was about the whole affordable care act. who's about a letter that was sent to the administration early on after the law passed heard it was interesting to me that one of the things cited was that not -- none of attention was paid to the provider. you lead one of the largest provider organizations in this country and if you think about the transition. ahead and implementing this legislation and making the changes that will be needed, how do you think about those challenges? how will you manage to get from one side of the river to the other, from the volume-based worldview heard about to the value-based world in a way that allows us to continue to provide great care?

-- i do think we need to be patient. we will get everyone who needs covered signed up. we live in this 24 hour a day news cycle and instant gratification by everyone. we are all appear without our cell phones and our blackberries and we need instant gratification. think about when medicare was introduced. and so i no iphone think we all have to be patient with that. so this is a big question about engaging the providers. i think the kind of common theme is what do doctors to, the duo you pay them to do. this is going to be a change, as toby mentioned, and focusing on delivering the highest quality

care at the lowest cost while at the same time providing excellent customer service. as a different paradigm. i think it is going to be an educational process, changing of the culture. toby has a great system in that everybody at the cleveland clinic has one-year contracts and he can influence that. but the large hospitals that have multiple private practitioners. even inside the university system where even the universities don't take into account quality often times in the promotion and appointment process. i think it is going to be a big change and there are going to be some bumps in the road, but we must change to reward people based on quality outcomes and holding costs. we have never been charged with doing that. we just want to do as many big volume cases that are highly

,eimbursable cases like heart lung transplants, big surgeries. that is going to change. one of the things that i'm concerned about is when you use volume as a metric for reimbursement. fieldhave a level playing to define what the quality for amateurs to use. qualityed the parameters to use. public reporting data came out in new york, there is a lot of exporting of the difficult cases west to the cleveland clinic. i think that whether by design theret by circumstance, may be a de facto rationing built into this because we are not going to take on the tough cases and not offer the services. we know we need to get from one side of the road to the other. i think everybody is clear that are paying forwe

value. is not aware we need to go that is a problem, it is how we build the economic model. , as we heard earlier, a lot of my business is still in fee-for-service. how do you think about managing the transition economically? i'm going to escape to her think the puck is going to be as wayne gretzky said. we think about the implications of how to decrease readmissions as toby was saying and how to manage chronic care outside of the hospital. i think there has to be an incentive put in place that changes the behavior of providers. as we're speaking earlier, there has to be some shift also to taking away some of the things that physicians have done in

moving it down to extenders, whether it be nursed practitioners, nurses, pharmacists are working together as a team. but an incentive that drives behavior. paperis a recent payfying the surprise that for performance actually changes professional behavior. >> one of the things that here is that we have to get out of being in the hospital business and in the care continuing business. to think about the whole patient across all that sides of care. you have been a leader in your private business and in the policy world and thinking about how to rebuild out a more robust continuum of care in different settings and get patient involved. help us think about what that means for hospital. >> is your party touch on the big changes.

people ask me all the time with the biggest change that we are undergoing. metalico the change today. i think the biggest change that we are seeing that can be -- the shift in risk. flows, winners, losers, and waste.ency risk used to be in the purview of government of the big pay orders out there heard with , thecare big celebration risk is shifted to the providers, the hospitals, the doctors. that is what is new. hospitals don't know how to manage risk. it never had to do it.

now it is in the providers. so the hospitals are what we're are talking about for the next couple of days. the consumer is the new element. this consumer is going to be for you stay competitive in this new world. you're going to have to focus on thatmer-based experiences go all the way from scheduling, how easy it is to see a physician or a team come how long it takes, how you were treated. much data is given to in your pda and your personal device, do you get laboratory tests before or after, what is that follow-up to keep you not in the hospital but out of the hospital, which means the hospital is no longer a structure, but like bob says it is an integrated system to keep people out of the hot -- the high cost to a low cost side

of care. i'm optimistic about that. i think the government has made a disaster over some very good principles in obamacare so far. but we willver, see. i think the leadership has been poor, it has been laid out poorly, it hasn't been done well here it am very optimistic and here's why it is so important what you're all talking about the next several days. technology today, ipads didn't exist three years ago. now you have a hundred million out there and we all depend on them today. 94% of people have telephones and 54% have smart telephones. -- thatciate economic empowerment of data, and data is not electronic health records. information technology is not electronic health records. government pushed a set way. isormation technology which going to drive the innovation which is going to be consumer

driven, not driven from above, is going to be automation, decision support to make sure the right decisions are made with the resources that are available by doctors at consumers. it is going to be the connectivity which means an investment to get those tentacles out there to do the outpatient care/inpatient care. mining,data means data the sort of stuff we couldn't do before. in some ways to stay competitive you're going to have to have consumer-based experiences. the consumer is going to be technologically savvy in terms of prevention care treatment and it will be driven to the connectivity and automation in the decision support in the data mining that is available. , you use is effectively can stay competitive and patients can have better outcomes. one of the ways that consumers get to help care is through the employer and to the pay or indirectly.

what doctors i can see, what hospitals i can access heard a lot of the benefit structures are determined by employers. that is changing now a lot of the way employers are purchasing healthcare is beginning to change. employers are getting impatient with cost of healthcare in the traditional benefit structures. from your perch, thinking about benefits for employers large and small, where do you think the purchasing behavior drives a hospital business in the healthcare business. how is echoing to change over time given where employers are going? >> employers have always been uncomfortable with the rate of inflation in health care, but they've always manage to pay. are the outcomes of the aca is the excise tax cap that hits in 2018. you can complain as much as you want about the law, but gives you an out as an employer. i've yet to meet an employer is going to pay the 40% excise tax on the system that the already consider efficient.

we have established a ceiling that employers are willing to pay. i think what the senator pointed out is that consumers are going to be exposed to more risk. it is going to come in one form or another. when people start to see how much more they're going to have to pay -- tour only two ways for an employer to stay. the unit you have to raise deductibles or out-of-pocket limits. as a general rule of thumb for every dollar you try to stay under him premiums have to increase maximum exposure to participants by two dollars. if you're talking about $50 is not a big deal, but if you talk about a thousand dollars that's a huge exposure. if you're a hospital that is a huge exposure and uncollectible debt. the second side is if an employer doesn't do it by increasing exposure to participants, they're going to have to focus on much narrower networks. right now the whole network selection criteria has been make sure my doctor is in, make sure my hospital is in and make sure all the others are in, too. most of the networks around the

country are established to include everyone. i think what we're starting to see on the public exchanges and we look expected an employer around is a lot more of these specialized narrower networks. if you try to go to a large employer occupation and sarah will give you access to 50% of the providers in the community, there is an upper. if you go to an uninsured population that is had no covers before and say i'm going to give you coverage a half of the providers in the community, that is a win for everyone. i think as those networks are to get filled, people that are in these bot access net shipment of access problems of their own, you may go to a less efficient provider. so there is a lot going on in the employer community. how we do itt smartly because there's a plot of moving dynamics because the uninsured have access to health care. that is good to be a take issue for people. >> this change in high deductible, there are some good things about that. i does bring the consumer in.

the consumers we are going to be bringing in for obamacare to work is going to be a younger population. so deductible five years ago was probably $500. now it is $2500 for most companies. so 30-year-olds are going to be forced today, mandated to get everybody in the insurance pools who will have deductibles of 2500. plus they will be paying a thousand to $1500 and they're going to be the ones going to the pocket, pulling out an app and pushing a button and saying ok. i need an mri. -- my physicians as a do and push a button it is going to cost $2200 at the center over here with very well known $1200ic health center in in green hills and $300 next- door. and the quality is the same on the same machines and this button is telling me that. all of a sudden it's going to have a huge impact in terms of the power of the consumer who is

empowered with a bucket of money now, namely their own money, to shop and the system is going to have to respond. to me that is going to eliminate waste, inefficiency. 30% of the three chewing dollars being spent today that doesn't go to federal patient outcomes, to me that his rate positive. of course i am more optimistic about the future, but technology will allow and empower the consumer to make those decisions. >> i think it is a really important trend. if you are a high-cost provider, that say a large academic medical center or a big specialty practice, you are probably at the high end of that pricing list on the app. -- which isause positive the transparent world, the prices are going to a lower level. as revenue that is supporting a lot of other things going on in medical centers. perspectiveom the , howe university of miami t

you think about the economic pressure that this puts unsustainability of these important centers? >> there will be tremendous pressure. when the government is reducing the amount of research money that is coming in. you have no place to cost shift to. the fact is, we're going to have to live in the real world. we are going to bring our costs down at the same time. were going to have to eliminate overhead and do all the things that other providers have to do i'm closer to the employer than the provider, so i see it from both sides. i don't think academic health centers will get off the hook. if we are 20% more expensive now, we're going to have to bring it down so that we can compete did i would point out, though, that most people who come into medicare have not have a lot of choice. so they're really coming out of hmos, out of narrower networks. so moving medicare to narrower network, moving medicare to less

choice, may not be as big a jump as some people would suggest. i would, though, say a word about people that can't afford high deductibles. we have used -- we have to be very careful about price sensitivity for poor people, for old people. you're bringing in a lot of young people into obamacare, but we are also bringing in low income workers. with that group we're going to have to be very sensitive about whether they're really going to have real access to health care system if they come in with high deductibles. it will be just as bad as the current system for them. that is what makes it so complicated. the different kinds of patients and people that we are doing with, some of them can live in a world with very high deductibles and others are going to have to be looking forward. or we will end up with lots of charity care for the in between's.

president echo what shall ayla says. presidentshalal shalala says. some of it is made up by the more prestigious places through philanthropy recruiting talented individual to get more grants. you can never make up the costsad by just indirect coming back from grants. has concerned are there always been this healthy tension between the dean of the school of medicine and ceo of the fans blowing how you support the academic mission. that is going to be even more difficult as time goes on. i agree that in order to be , the inefficiencies within academic medical centers, particularly hospitals, and a

lot of it has to do with trainees responsibility and ordering too many tests are not the right tests, we're going to have to fix that. there has to be a lot of attention. the really good places will get this figured out and it is artist going to happen. toby showed the graft about the people.onsortium now andfocusing on that improving quality and holding costs. that is going to be the ratio we have to watch. out orook 900 positions academic health care center. physically there were administrative positions. we're are doing that corporations are doing. we looked at our staffing and we protected the clinical side, but we took a whole layer of administrative cost, recurring 40 of $50 million in recurring

costs. we had to do that because we can see what is coming down the pike. we're going to have to be a much more efficient organization, both for employers that are , but we areents employers to. we can't afford high cost academic medicine as an institution. >> i think academic health of your veryth involved are, for most people in to definewe all need our goals. our goal today are patient outcome. we have artie said that, but now for the first time come over the next five years, reimbursement is going to follow outcome of the patient over a continuum of care increasingly with bundling and reimbursement for one year, post transplant. increasingly we are going to move to more macro bundled in person. for most people in the room, the for the hospital tomorrow

is maximize outcome for existing resources or maybe less. your role is a little bit different because this maximizing patient outcome that you need to train the cardiac surgeons of the future and the primary care surgeons of the futures and the nurses and the >> andsed approach -- research. >> and the third column is research. i am academic or had been. the $60 to justify billion of research or 20 billion or whatever it is going to be. need to have a team-based approach. the team-based approach where nurses are elevated, social workers are elevated very the team is responsible for a population more than the individual. if you need to train them. the time to get on the real world it is too late.

we need to put a price tag on that but you need to justify that. for most people the hospital tomorrow is not going to be miami or even cleveland clinic, but maybe less so, it is going other four or 5000 hospitals out there that have to survive. sayuld again come back to that survival will be patient outcomes measured heard those were the reimbursement is going to flow. it will be driven primarily by consumer engagement and experiences with 200 million people changing the system instead of just the hospitals. need 5000 hospitals in that world? >> probably not. three say we have trillion dollars, three percent but teenage 5200 if youls author -- but

have 5200 hospitals out there, in terms of delivery of services, but how you actually go on and get your airline reservation, is not the way financial services is done today. that is going to be the difference. if you have appropriate allocation of resources where every hospital didn't have to offer all 20 different services, of course you don't need 5200 hospitals. >> i would agree with that. but there was describing, we have seen it in our communities, this arms race of have one hospital gets the latest greatest mri scanner, then the other has to have it. that is going to be over. if you look at the margins of that most hospitals in the country, they are in low single digits. a lot of these hospitals are not going to be able to survive nor should they. i don't think we need all the hospitals that we have to answer

your question directly. is going to be difficult to make that transition if you're not part of a bigger system, because that is going to be where you get the critical mass. , the quality of administrators and leaders to make these things happen. >> so we do have to change model of care, it sounds like. we can't deliver care in the same high-cost way. we have to find a way to distribute the care and have more chronic disease services. hang on a minute, where are all these delivers of care going to come from. ? we won't have enough doctors to deliver all the primary care that we need to in the next 15 years. certainly we don't have enough nurses today. think about where demand is going. you're spent a lot of time thinking about workforce development. capacityproduce enough act of >> the numbers out there

are 40,000 primary care doctors. that is using conventional 40,000 doctors are needed today. , if obamacare is fully implemented, another 30 million people come in to the system who don't have insurance. in summary comes into the system, their health care spending goes up about 50% more than what they spent their the system. so we have 30 million people coming into the system that was 40,000 physicians too short. donna, what do we do? laughter] >> relock people to practice up to the training. the fact is that nurse practitioners can handle about 70% of the primary care. we should be using well-trained

primary care doctors for more of the ambiguity. this is the point that is made, we have got to create teams. that means physicians assistants and nurses and pharmacists and other care providers working as a team, we are eager over the hierarchy. we have to take on the scope of practice rule, state-by-state if necessary grade that is what restrains us from creating these teams in many ways. we have to look at how people are trained. we have to train them better, and the fact is we could handle this primary care if we could deal with the scope of practice issues. if we can overcome our reluctance to talk about teams as opposed to hierarchies. will we have to train people in the future? yes. we have to train them better and then use them up to the level of their training. i think we can handle it.

it is true, when you bring your people into the system, most of them have been getting health care one way or another. probably a little bit more expensive. up as care costs will go he did in massachusetts people people will run to the doctor and get the physical. that will settle in with very good nurses and physicians and these teams of caregivers to organize primary care, chronic care management and the life care. there are lots of things we can do if we can write down the barriers across the board.