[indistinct conversations] >> it was announced early this morning that ariel sharon has died. he was in israel's 11th prime from 2001serving until 2006 before suffering a stroke that left him comatose. house speaker john boehner

released a statement saying -- house minority leader nancy pelosi had the following to say in a statement -- president obama also released a statement that reads -- >> later today, terry mcauliffe will be sworn in as virginia's next governor. we will have live coverage of the inauguration ceremony beginning at 12:05 eastern on c- span.

the house ended the week by passing a bill that would require the federal government to report security breaches on its healthcare.gov website. members will be turning their attention to a short-term spending measure this week that will keep the government funded past january 15, which is when expiresding authority for the federal government. the senate will continue to work on the bill extending unemployment benefits that expired in december for more than a million people. for more on those items and what to expect next week, we talked to a reporter covering capitol hill. >> as congress wraps up its first full week and gets set for another full week of legislative action, the headline on "national journal" is unemployment deal falls flat, putting senate back in irons.

one of the authors joins us from phone, michael catalini. where do things stand on the unemployment bill in the senate? >> on monday the senate comes back at 2:00 and we expect a vote on an amendment by senator jack reed who was one of the original co-sponsors of the three-month unemployment insurance extension and what happened last week was we saw deals coming together to pay for unemployment extensions for one year which is something republicans said they wanted to see but late last evening what we saw was that deal fell to pieces and the reason it fell to pieces was because the republicans are upset that senator majority leader harry reid was not allowing them to have amendments on the three- month extension. >> as the week starts, they have six senators who are in favor of moving forward with debate and now at the end of the week they're asking for more debate on amendments? >> what those six senators had said after they voted to advance the bill was they did that on the condition that or the understanding that they would get a vote on two of their

amendments. reid denied them votes on their amendments saying some were not germane and ruled out any of the amendments having to do with defunding the affordable care act. so the republicans have 24 pending amendments and many of them were germane so what we'll see on monday is a vote on the reid amendment that would pay for it for a year and pay for it through an extension of the sequestration cuts for another year as well as a provision backed by republican from ohio that would prevent so-called double dipping in uninsurance benefits and disability benefits but republicans are balking at that because they're saying they have 23 other amendments they want to offer and reid isn't allowing them a vote on those. >> off the floor of the senate and the house, negotiations have

been continuing on the 2014 federal budget with the january 15 deadline looming. it looks as if the house next week will take up at least a short-term continuing resolution. what's the status of that longer term, that omnibus spending bill? >> what we know about that is, lawmakers, two top appropriators, harold rogers in the house and a democrat from maryland report that progress is ongoing, they're in town working on the so-called omnibus measure and they expect to have something by the end of next week and the short-term goes through saturday and we expect to see an omnibus presented in time for members to vote and get out of town for the weekend. >> the only other item in the house that we know of is a bill dealing with the healthcare law. the house working on their first

at least of what's expected to be a number more in 2014 next week in the house. what a that's bill look like? >> this bill will require the administration to report to congress on users, americans interaction with healthcare.gov as you and your listeners know, the rollout was very bumpy for healthcare.gov and this is an attempt by republican lawmakers to shine a light of transparency on the bill and they want the administration to report how the website is faring. >> you can follow michael catalini's reporting at nationaljournal.com and on twitter. thanks for joining us. [captions performed by national captioning institute] [captions copyright national cable satellite corp. 2014] >> c-span, we bring public affairs events from washington directly to you, putting you in the room at congressional

hearings, white house events, briefings and conferences in offering complete coverage of the u.s. house. all as a public service of private industry. we are c-span, created by the cable tv industry 35 years ago and funded by your local cable or satellite provider. watch as in hd, like us on facebook, and follow us on twitter. next, the health affairs journal hosted this event at the .ational press club trad it is an hour. >> good morning. i'm the founding editor of health affairs. i will moderate a discussion this morning. i appreciate you all coming out on this day of warm weather before we all freeze tomorrow. it's a pleasure to have the staff of the office here to

present. we'll have two presenters and then two others i'll introduce all four here in a minute. i'm prepared to help answer questions, respond to opinions, whatever it may be. i also point out in here is not only the expanding paper, it's a cd that has the whole of the content of new issue of health affairs in it including the exhibits if anybody is in the exhibit. look for this to have everything you'll need in relation to at least the subject that we're talking about this morning and also the entire contents of the january issue. for about 25 years now, health affairs has been publishing

every year the annual report of the office of the actuary that relates to national health expenditure trends. obviously, the latest report which you'll hear about and many of you have read in the terms of our paper, relates to 2012. over this time of this long stretch of time, at least we've been publishing the subject, healthcare spending has averaged annually about 2.3 percentage points greater than the growth of the national economy in that particular year. while that percentage may sound modest, it's really largely the reason that healthcare expenditures have continued to

gobble up more of the nation's economy every year. growing from about 5% in 1960 to 17.2% in 2012. we'll hear more about that from our presenter. today's story obviously is different. somewhat of a surprise you might say. i don't think there's any agreement either in the actuary and other government circles. the reasons why obviously the recession played a part in it. the a.c.a. provisions probably played little or no part in it in terms of 2012. we'll hear more about that from the presenters. it's a great pleasure to introduce ann martin who will

lead off. ann is an economist in the national health statistics group in the office of the actuary. she will be followed by michael hartman who is a statistician. he's a national health statistics group. two of the individuals here that will be available to answer question or help answer questions or respond to opinions, whatever. lekha whittle who is the economist in the office of the actuary. >> thank you very much. is this how i operate this?

ok. good morning, thank you all for coming today. my name is anne martin. i'm here today with other members of the national health expenditure accounts team to present to you the results of our national spending article for 2012. the trends that we will discuss today highlights some of the important points contained in our article which is to be published in the january edition of health affairs. just a couple reminders, the information that we're presenting here today is embargoed until 4:00 p.m. at that time, the entire historical data series will be available on our website. i'll start off with main points of the 2012 report. national health expenditures

increased 3.7% in 2012 compared to 3.6% in 2011. total health spending reached $2.8 trillion, where $8915 per person. health spending is a share of over all economic output as measured by gross domestic product fell from 17.3% share in 2011 to 17.2% share in 2012. i'd like to point out that in july of 2013, there was a substantial upward revision of gross domestic product. this caused health spending share of gdp to be lower than it would have been had there not been a revision to gdp. this affected all years back to 1960.

on this graph, what we're showing the annual rate of growth of national health expenditures compared to over all economic growth as measured by the gross domestic product. we're showing national health spend as a share of gross domestic product. there's three vertical bars and those indicate the last three recessions. what we can see in this illustration is that during the last three recessions, health spending growth was faster than that of gdp. at the same time, the health spending share of gdp increased. because health spending growth is usually faster than over all economic growth during recessions, health spending takes up a larger part of the economy. however, soon after the end of each recession, gdp growth begins to pick up and growth in health spending starts to slow. we refer to this as lag impact of recession. from 2010 through 2012, this lag

impact is illustrated as health spending share of gdp was relatively stable between 17.2 and 17.4%. i will now walk through some of our high level trends. they are relatively steal health spending growth rate from 3.7% in 2012 following growth of 3.6% in 2011. not due to one prominent trend. it was due to mixed trends within services and payers. for personal healthcare spending which accounts for 85% of over all national health spending, growth accelerated in 2012 increasing 3.9% compared to 3.6% growth in 2011. however partially offsetting the faster growth in personal healthcare spending with slower growth in investment and health related equipment and net cost of private health insurance.

this was accompanied by a decline in noncommercial research that was due to the expiration of funding from the american recovery and reinvestment act of 2009. we can attempt to explain how spending growth by examining components related to price and nonprice factors. prices increased at a slower rate and accounted for smaller proportion of health increase in 2012 compared to 2011. nonprice factors refer to population growth, the age and gender mix of the population and all other factors such as the use and intensity services. this graph illustrates how we

analyze the price and nonprice factors. the gold line is a representation of per capita spending growth from 2008 through 2012 for both aggregate national health expenditure and the sub component personal healthcare. the blue section of each graph represents the portion of per capita spending growth due to growth and medical prices which includes over all economy wide inflation and medical specific inflation. the red section represents the age and gender mix of the population. the green section represents all other nonprice factors such as use and intensity. here we can see the effect of growth in each of these components relative to total growth. as i previously said, medical prices increased at a slower rate as compared to 2011. because health spending growth was relatively stable, prices accounted for a smaller proportion of per capita health spending growth.

some specific reasons for this which are mentioned again later pertaining to services and payers, includes swelling of prescription drug prices because of wave of blockbuster patents at the end of 2011 and 2012 which led to lower prices for previously expensive drugs. there's a rate adjustment for medicare skilled nursing facilities which reduced payments for 2012. also, there were reduced payment updates for most medicare providers resulting from productivity adjustment, mandated by the affordable care act. for healthcare services our main finding included faster growth in hospitals, and slower growth in prescription drug and nursing

care facility spending. for healthcare payers be, we saw faster growth in medicaid and out of pocket spending. the specific reasons for these trends will be explained in slides to follow. regarding the affordable care act, all provisions that have become effective since enactment in 2010 are included in our health spending estimates because they are reflected in our data that measure total revenues. while our historical data cannot parse out the spending that was directly the result of the a.c.a., the projections model show there was minimal impact from the affordable care act on aggregate national health expenditure trends from 2010 through 2012.

within specific services and payers, we can identify some of the provisions that affected spending for those sectors. however, even within the specific sectors, the impacts were very small and in some sectors, the impacts were offsetting. for example, for private health insurance, programs that expanded coverage added to spending while the minimum medical loss ratio had a slight reducing effect. for medicare, a notable fact on spending was from reductions to medicare payment updates or productivity adjustment particularly for hospitals. for prescription drugs the drug coverage discount program added to medicare spending while medicaid prescription drug rebates lowered medicaid spending. i'll start by walking through some of the trends by service.

here are the services that we published in the national health expenditure account. the proportion of spending so we're showing distribution of $2.8 trillion. over all these shares tend to stay constant from year to year. 32% of all healthcare spending goes to hospital services. the second largest category is for physician and clinical services at 20%. the third single largest category is for retail prescription drugs. in total these three services account for 61% of total national health spending. these were the gross rates between 2011 and 2012. for these services. as we can see, there were mixed

trends that occurred in 2012. because hospitals and physicians and clinics and retail prescription drugs account for the largest shares of total spending, growth in factor tend to be the main drivers in healthcare growth. for spending for hospitals and physician and clinical services grew faster in 2012 compared to 2011. while spending for prescription drugs slowed. national health spending growth was also moderated by a slow down in spending on investment and research and health related equipment. for hospitals in this graph, we're showing the growth rates from 2008 through 2012. hospitals spending increased 4.9% in 2012 following slower growth in 2010 and 2011.

reached $882.3 billion. in addition, sending among the main payers of hospital services, medicare and medicaid all accelerated. for medicare, hospital spending growed at a faster rate. partially due to increase in medicare enrollment. some of this increase, however, was offset by the a.c.a. provision that reduced payment updates for hospitals. for medicaid, although growth in hospital spending was still low in 2012, its rate of growth was still faster than in 2011. reflecting slightly better economic conditions as some states withdrew previous payment cuts and expanded care. here we're looking at spending growth for physician and clinical services. spending in this category increased by 4.6% in 2012 to reach $565 billion.

also price growth slowed slightly in 2012, the use and intensity of physician services accelerated. when examining trends by payer we see that growth and out of pocket and private health insurance spending both accelerated in 2012. this increase growth was primarily due to increases in visits to doctor's offices as the economy continued to recover from the recent severe economic recession with consumer resuming spending on medical care that they may have postponed during the recession. for retail prescription drugs, total spending reached $263.3 billion in 2012. as you can see over the last few years, spending growth has fluctuated. the rate of growth in 2012 was just 0.4%, which was the same rate of growth as in 2010.

in 2010 the low growth was influenced by sharp slow down in use. in 2011 there was a temporary rebound and prescription drug spending grew by a faster rate of 2.5%. which is due to prices in brand names. in 2012 growth slowed again and this was driven largely up by a slow down in over all prices paid for prescription drugs. first major influence on slower growth in prices was on the so called patent cliff or the wave of brand name patent expirations that occurred 2012 as numerous blockbuster drugs notably, lipitor and singular lost patents in 2011 and 2012. that led to lower cost generic versions of these drugs. also influencing the slower

growth was continued increase in the generic dispensing ring. the dispense prescriptions that were generic excluding branded generic increased in one year. in large part due to many brands switching to generic status. among payers in 2012, we saw declines in out of pocket and private health insurance spending. this was influenced by the continued movement by three and four tier coinsurance and copayment structures. coupled with blockbuster drugs now being available on a lower cost here. i'm going to turn the presentation over to micah who will discuss more about the payers of healthcare in 2012.

>> thanks, anne. i will start my portion of the presentation with the payers of healthcare spending. we will take a look at the chart that shows distribution of healthcare spending and the $2.8 trillion that was spent in 2012. we see health insurance accounted for 72% of all healthcare spending. within the health insurance category, we see that the single largest payer was private health insurance at 33% followed by medicare at 20% and medicaid at 15% on a rounded basis. outside of the health insurance category, we see that off to the left the next single largest category is out of pocket spending at 12%.

it does not include any payments for private health insurance premiums. round out the remaining payers, other third party payers and programs, investment and government public health activities account for the remaining 16%. focusing on the annual growth rates for 2012 and 2011, we can see that national healthcare spending increased slightly from 3.6 to 3.7%. among the four largest payers, we see there was faster growth in spending for out of pocket payments as well as spending for the medicaid program. however, there was faster growth was partially offset by slower growth in both private health insurance and in spending in the medicaid program. i'm going to go ahead and take a look at these major payer trends on the next few slides.

starting with private health insurance, we see spending for premiums reached $917 billion increasing 3.2% which equal to average annual increase over 2008 and 2012 period. enrollment growth may be a major factor. enrollment did reach 188 million in 2012, crossed by 0.8 million individuals or 0.4%. however, enrollment levels were still 9.4 million lower in 2012 than in 2007 at the start of the recent recession. also in 2012, net enrollment gains contributed to the slow growth in premiums. these plans have lower premium levels by higher cautionary amounts that other type of plans that reached 19% share of all covered workers and a 31% share of the population in 2012.

taking a look at the net cost of health insurance which isn't pictured here which is the difference between premiums and benefits, it remains unchanged at $110 billion for 2012. however because spending for medical benefits grew faster than that, net cost ratio, are the shared premium attributed to nonmedical expenses dropped from 12.4% in 2011 to 12.0% in 2012. focusing on the trends for private health insurance, premiums remained low for both years 2011 and 2012 and benefits accelerated slightly from 2.9% to 2.2%. -- 3.2%. the slightly faster growth was due to increased spending growth for both hospital care and for

physician and clinical care. that was offset by a decline in retail prescription drug spending for 2012. focusing on the medicare program, we see that medicare expenditures reached $572.5 billion in 2012 and enrollment in the medicare program jumped considerably to 4.1% growth. overall medicare spending growth slowed. the slight slow down in medicare was largely due to a prom dent decline for spending in nursing home care which fell by 4.2% in 2011 following increase of 9.9% 2.2% was decline in 2012 following an increase of 9.9% in 2011. total medicare spending grew

0.7% in 2012 slower than the 2.5% rate of growth in 2011. now we can examine the medicare program in more detail splitting the program between fee for service and medicare advantage spending. we begin with fee for service expenditures which accounted for 73% of total medicare pending growth. slowed from 4.3% in 2011 to 2.7% in 2012. the slower growth fee for service spending was due to several factors including decline in spending due to one time payment reduction to recalibrate payments in 2012 following a large increase in payments in 2011 corresponding to the introduction of the new payment system for these type of facilities. also contributing with slower growth due to increased use of lower cost generic drugs when blockbusters went off patent in

2011 and 2012. the a.c.a. reduced payment updates in 2012 for all part a and most part b providers. this was contributing to the slow down for fee for service spending. then taking a look at the medicare advantage program, we see that spending increased 10.9% which is acceleration from the 7.0% in 2011. faster growth in the m.a. program was driven by 10% increase in enrollment. the 4.1% increase, over half the increase can be found if the medicare advantage program. medicare advantage spending growth slowed due to the increased enrollment from the baby boom population but also due to the implementation of the a.c.a.'s new payment mechanisms

that linked to benchmark payment rates which effectively lowered the increase and total medicare advantage payments. in addition, the a.c.a. required plans quality ratings to factor into payments beginning in 2012. now looking at the medicaid program, spending for federal and state reached -- increasing 3.3% following growth of 2.4% in 2011. the pick up in the rate of growth was primarily driven by faster growth in hospital spending as well as facer -- faster spending growth in other health residential and personal care. these two categories account for over half of all spending in the medicaid program for 2012. even with the faster medicaid spending growth, both 2011 and 2012 were still two of the lowest annual rates of growth in the history of the medicaid program excluding 2006 when part d was implemented and it changed the way medicaid paid for some beneficiary prescription drugs.

the reason for the low level spending in growth in 2012 was mainly due to slower enrollment as the economy continue to recover and efforts by states to control costs following the expiration of enhanced payments by the federal government mandated by the american recovery and reinvestment act. on this slide, we illustrate spending for the medicaid program from 2008 to 2012 for both state, local and federal government. the portion of medicaid spending financed by the federal government declined for the second year in a row, down 7.2% in 2011 and 4.2% in 2012. this was due to the expiration of these enhanced federal matching rates which were in effect in october of 2008 through june of 2011. these enhanced matching rates caused the share of rates to increase to approximately 67% in 2010.

when the program expired in 2011 this year fell and by 2012 the share returned. now switching gears, we're going to take a look at the sponsors of healthcare spending. we can see that the businesses households and government entities and other private revenues can be identified. the household healthcare spending which includes out of pocket spending as well as premium payments made by employees and individuals among other things remain steady at 28% share for 2012. slightly faster household spending growth in 2012 occurred mostly from contributions to insurance premiums for both private health insurance and for the medicare program. slightly faster growth for medicare was due to --

the federal government share at 26% has declined due to substantial slow down in spending in 2010 and 2011 as well as the decline in 2012 and the decline in 2012 was due to the expiration of enhanced federal matching rates but also contributing was the expiration of early retirement and reinsurance program for 2012. we can see that state and local government share at 18% of total healthcare spending recently increased as growth and state local government spending was much faster in 2011 and 2012.

at this point, i want to wrap up our presentation by going over our main findings. we see that healthcare spending increased 3.7% in 2012 which was the fourth year of relatively low and stable growth. health spending reached $2.8 trillion, which was $8915 per person. after benchmark recessions has been made to the gdp, we see that the share of the economy devoted to healthcare spending was 17.2% in 2011. over all spending was relatively stable due to mixed trends we mentioned. also for the medicaid program and for out of pocket payments. while spending growth slowed for retail prescription drugs, skilled nursing facilities and private health insurance and the medicare program. from a sponsor perspective, we see that the distribution of healthcare spending has remained relatively unchanged with the exception of the shift from the

federal to the state local governments to mainly to the expiration of the ira and temporary enhanced funding. i want to thank you for your time and attention. i will turn the presentation back over to john. >> we'll take your questions if you could identify yourself and your organization, that would be helpful for the panelist. >> jim, of the dallas morning news. wondering if some of the factors

you described sounded like one off events. like the declinement in investment and hospitals because of the end of the spending program end of patent protection for certain drugs. yet, we've had a few years now of slower growth. was 2012 a one off because of these specific factors and we should expect more next year? or was this part of a trend a continuation of a trend that you've been seeing? >> i'll go ahead and start with that. the trends that we've seen in the last few years are consistent with historical relationship that we've seen between health spending and over all economic growth as anne mentioned when she showed the slide with gdp growth. as you mentioned, there were definitely some one time factors that impacted 2012.

you listed a number of them that we covered in the presentation as well. what we can tell you is that the period of stability is consistent with the historical experience when the share of gdp tends to stabilize after an over all economic recession usually two to three years. that was shown on the slide where we had the health spending gdp trends and the share of gdp. the reason that happens is it takes several years for the recessionary effects to work their way through the health sector and through the health system. what we're saying in the report is that the slow growth we've seen over the last few years is consistent with the historical trend and there were a number of one time factors that impacted 2012 including the patent cliff and the other factors you mentioned as well. >> the 39% increase in medicare enrollment is not a one off phenomenon.

continuation of a trend that may increase based on your reading of demographics? >> that was primarily because of the baby boomers who started enrolling in medicare at the end of 2011. as far as the future, we can't answer that right now. we have medicare enrollment trends that the trustees publish and analyze. for us, we're just stopping at 2012 and that was the highest rate of growth in medicare beneficiaries in 39 years. >> but that population is not going away. >> yes. >> john. >> i wonder if you can put the slower than gdp growth in historical perspective and also

share your thoughts on whether that might continue? >> i think aaron's statement about how this is the continuation of something that we have seen in the past. the cycle where health spending as a share of gdp tend to stabilize after the end of a recession. that cycle has not been broken. we are continuing to see that. >> just in a historical context, john mentioned in his opening remarks difference between the average annual growth between gdp and health spending that health spending has grown faster. i don't know the exact numbers. i think over two percent faster over time. >> when was the last time there

was a decline in gdp share? >> it declined by a very small percentage point between 2010 and 2011 but prior to that it was 1997. >> thank you. >> the report mentions a slower growth in investment health related equipment. do you have any data suggestive the demand and if not, do historical trend suggest that's going to spike back up? >> we got our data from the bureau of the census. that was a deceleration that just came straight out of our data source. there was a big revision that happened between last year's data and this year's data which sort of increased the growth rate for 2011 higher than what was previously reported. it was a revision. it increases last year's growth rate. we're seeing a return to normal

in 2012 as far as in the future, we don't have the data for that yet. >> julie. >> julie from npr. i'm puzzled in your sponsored data in the share of household spending not going up. we keep hearing more and more about employers passing more costs on to their workers in terms of higher deductibles those two things don't seem to be going together. is there something offsetting that? i'm puzzled by the idea that is staying constant when there's so much evidence that people are being asked to pay more out of pocket for their own spending. >> the household share has more than just the out of pocket payments. it also has consumers payments towards medicare part a. and part b premiums.

households out of pocket only represents about 40% of that. out of pocket spending which is the coplacements and deductibles did accelerate slightly from 3.5% to 3.8% growth. it did have a slight up tick in 2012. the household, you might not be able to see that because of the category contains more than out of pocket spending. but the private business side also still in effect from the end of the recession, there's more contributions to private health insurance plans as people are gaining their jobs. there's shifts within the sponsors as we come out of the recession that may or may not be visible to the distribution of spending that's occurring. >> i can walk you in the

categories real quick. >> use the mic if you would. >> sorry. employee and self-employment contributions and voluntary payment, medicare hospital trust funds and premiums by individuals and all of these categories accelerated in 2012. our data is picking up an acceleration, it's just in relative to the other categories within the sponsor that we're not seeing increase in the share. >> did you guys break out durable medical equipment as an expense or did it go down or up? >> it remains relatively stable. >> do you know what is the amount? >> it was about 5.6%. it's been that way for three years now. >> on page 74 it stays the -- says the prescription drug

use was picked by the availability of lower cost generic drugs. is that three quarters of all expense prescription or three quarter of generic drug prescription cost $10 or less? >> all prescriptions dispensed. the data source on that is i.m.s. health. all dispense prescription, yes. >> "washington post." you repeatedly say this is a historical trend that health spending tends to stabilize after a recession. you don't explain why this is the case. could you explain why this is the case? why health spending stabilizes? is it just for example inputs have lower price increases. second part of my question, would be even though prices account for rest of the over all

increase this year, they seem to represent the largest share of the increase in spending. what is that increase and how does it compare with the past? >> the first part of the question in regards to what were the specific reasons why health spending has stabilized. it takes time for contract to work their way through the health system to be negotiated in advance. in the past and we see it now, health spending is growing faster than gdp in times of recession. it takes time for contracts -- aaron, do you have any more on that? >> one of the reasons why we see gdp fall during the recession and then we have this lag impact where we don't see health

spending come down, there's contracts in the healthcare sector that are negotiated more than a year in advance. there is also the availability of coverage through public programs so as people may lose their job, they may become eligible for medicaid. some individuals are able to keep private health insurance coverage through cobra and spouse's policy. there's also changes in consumer and employer behavior in response to changing economic circumstances. employer decisions on which types of coverage made the generosity of coverage as well as individuals on which type of services to consumer. those types of decisions are not often immediately impacted during a recession. you see those changes in behavior occur several years after the recession. when you get -- you have the slow down or in the case of the past recession, the decline in

gdp, several years after that as they start to converge, health spending growth rate, that's when you get the stabilization in the share of gdp that we've seen after the recession that we showed on the chart. >> the second portion your question dealt with prices and the portion that it makes of total health spending increase. for national health expenditures, what i showed on the graph was that national growth per capita increased 3% in 2012 and in 2011, the per capita increase was 2.9%. >> my question is different. what portion of increase in health spending reflects price and how does that compare with the past? >> that was what we're showing for price growth is 1.7% out of 3%, which is a little more than

half is attributable to price. in comparison to last year that was a drop. last year it was close to 80% prices made up of total national health spending growth per capita. we don't have national health expenditures broken out by price further back than 2004. in the recent past, this has been the lowest rate of growth in prices. the recent past, this has been the lowest growth rate in prices. >> in the article on exhibit four visually you can see the nominal growth rate. this is a per capita chart but it shows the bars on that exhibit. it showed contributions of prices verse nonprice factors to nominal health spending growth.

>> other questions? yes in the back please. >> the m.a. star rating demonstration, do you guys have a projection of what a.a. spending growth would have been had that demonstration not been in place? demonstration m.a. plans for more lower quality scores than otherwise would have happened. >> no we don't. that's outside the scope of our project. we don't have those figures. >> are you able to quantify the impact the affordable care act on spending growth? you said it had a minimal effect.

i was wondering if you're able to attach numbers to that >> over the course of three years, 2010 through 2012, it had an effect of less than .1 percentage over all level. total. less than .1 percent. positive. >> over the years, economist had attributed technology development and diffusion as a major factor in the increase in spending. i don't know exactly how joe defined technology but is there any way to break that out and attribute some percentage to technology?

the way we put the historic national health expenditure accounts together, we're not able to parse out the spenting growth in this project. specifically attributed to technology. we mentioned couple categories where we can look at trends and the equipment that's purchased bethe health sector and some of the technology that filters through that. we don't have a way to break that out. >> the category m.d.s and clinical services, what's the difference there? what do you put in the clinical service bucket that isn't payments to physician? >> that's mainly emergency care centers and ambulatory centers. >> it slightly goes to physician owners and their involvement in investment? >> it could. >> thank you, i have a question

about -- >> please identify yourself. >> jeff young with the huffington post. i wanted to ask about the individual insurance market. to the extent to which premiums for exchange plans maybe higher than products currently on that market. do you expect to see a measurable effect on the rates of premium growth or the rates of car sharing among people with insurance over all in future years because of changes happening in that market. or is it too small piece of the pie to make much of a difference? >> that's another one we wouldn't have indication of right now. we're still not sure of the impact that would have. we have to wait until we see data which would be -- 2014 data

won't be available for two more years. at this time, we don't have the answer to that question. >> john with npr. it seems to me, people who might want to take some comfort from this decline in the rate of growth and healthcare should not take comfort because it basically what's happen historically after a recession. price growth stabilizes. maybe we're near record lows because we're through a record great recession. is that the case? are you saying there's no change in the long term trends here? >> what we're saying in the article is that the relatively low rates of growth that we've seen over the last four years are consistent with the historical tend.

we don't characterize those trends. it's consistent with what we've seen in post recessionary periods in the past. >> do you expect difference between gdp growth and rate of growth in healthcare to go forward with 2.2%? is that no change there? >> as i mentioned, this is a historical project. we only have taken the data and estimated it through 2012. what we've seen through 2012 is consistent what we've seen in >> i know this is looking into the future again and this might be a little bit granular. is there anticipation that will

allow you to start accounting for differences in payment policy and hospital outcomes and differences in spending due to your drugs and medical devices. the reason i ask because, there does seem to be more emphasis on payers on therapeutic and diagnostic products that change outcomes. the great hope you can cut down on readmissions. if you don't have that kind of data and analytical tools, is there any anticipation you might acquire that in the future? >> we use high level data drilled down. in house we only have medicare and medicaid data we can drill down to claim controversial

explore the type of things you're suggesting. we leave the research and other things up to the experts. our top level basically originates from the census and we supplement them with other national data sources. depending on how low we can go into the data, sometimes we can't and sometimes we can't answer those questions. >> revision in gdp was affected by the department of commerce last year. how much did that drop share of health expenditures in over all gdp? >> health spending share would have been 17.9%, due to the revision, it was 17.2%. >> "washington post."

i have a quick clarification. you mentioned the affordable care act less than .1%. what does that .1% applies to? is that the rate of growth? >> no, that was on the level. it was referring to a dollar level. over three years from 2010 through 2012, .1% >> .1 percent or .1 percentage point? >> .1%. >> the amount we're spending on healthcare is possibly as much as .1% less over the three years? >> actually it added to spending. >> got it. so we're spending .1% as much as .1% more on healthcare than we would be without the affordable care act? >> correct. >> thank you.

>> one other clarification about share of gdp taken by healthcare. in 2011, it was 17.3, does that number reflect to adjustment in gdp? >> yes, all of our shares are revised to 1960. the bureau of economic analyst published their new gdp. >> last question. >> i wondered, do you have any additional data available that breaks out the sponsor spending by type of household? you know that household spending has remained constant over the last few years. i wonder for medicare household,

is that different than privately insured households. >> under household, we can't break it up like that. we do have a couple subcategories that you can get some additional detail. like payments. >> we know what amount households are paying to their private health insurance. we know how much households are paying for their medicare. we know what they're paying towards for their employee share private insurance. what they're paying their share of payroll taxes and then what is out of pocket costs. from that you can figure out where the households are falling.

>> presumably, if there is more cost sharing going on in the individual market, for example, that maybe offset by other things happening in medicare. you're not really able to pull out sort of what is going on out of pocket spending really. >> most of our data comes in top down. you would have to go to another survey or another research. >> okay, if there are follow up questions, is there an e-mail address? anybody like to volunteer to field. okay. any questions, she'll funnel them to c.m.s. we thank you for your

presentation, your data and we'll close. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2014] >> live now to the virginia governor's inauguration ceremony in richmond where democrat terry mcauliffe will soon be sworn in as the state was the 72nd governor. he comes to office after defeating republican state attorney general ken cuccinelli in a close election and succeeds outgoing republican governor bob

.cdonnell some of the expected attendees include tim kaine, former president bill clinton, and former secretary of state hillary clinton. terry mcauliffe cochairing what resident clearing -- cochairing presidentialnton's campaign. he is the former chairman of the democratic national committee. this is live coverage from the state capitol in richmond, virginia on c-span. >> it was our privilege to work with terry and make this transition. you are in for a great privilege. >> we know that. thank you. welcoming andeen everything, so thank you. >> oh, no, we are glad. >> absolutely.

>> we really appreciate you coming to my inauguration. >> that is how it should be. your team is great, martin went like you here -- martin -- >> either that, martin, you are spectacular? >> you remember all the kids, of course. >> i do. >> what mike, good to see you. >> sally, ok, and mary. hi. you are the oldest, and you up and new hampshire? >> maine. >> the maniacs. it is beautiful up there. whereabouts? >> waterville, nor the portland. >> welcome back feel. -- welcome back. beautiful family. >> this is mary mcauliffe.

>> hi, mary. >> i wish you well. keep the cell phone, we will keep calling. i really appreciate that. at 1:15, he texted back at 1:24, so he is on the ball. terry and dorothy, i want to present to you the key to the governor's mansion, something you will never need, but it will look great on your coffee table or wherever you decide to put it. it is a commendation of a beautiful sterling silver little plaque here that says the executive mansion and key. will be followed by the next four years by police officers, so you do not have to worry about that.

i have the privilege, governor, and you enjoy it and do great things for the people of virginia. it has been an incredible honor and privilege for more rain and i to do this. another to send it to irish catholic family with five kids. there have been no catholics for 500 years and now there are three in a row. god bless you, and may the lord shine his face on you and the mcauliffe family. thank you, sir. >> thank you. >> my pleasure. >> thank you. >> anything i could do. >> kids, why don't you come up, we will get eight quick picture -- a quick picture? >> minus i turn it around -- mind if i turn it around? >> oh, no, you are quite all right. >> good to go now.

[inaudible] did you or do you go to bcu? >> yes. >> i am in photography. >> oh, cool. >> do you live on campus? >> yes. [inaudible]

>> not much i can do besides stand about here. [gavel] [cheers and applause] >> the joint simply will come to order. members and guests are reminded that you are not supposed be using your umbrella, but if you do not think you are blocking anybody else's view, it is ok with me. arms -- at >> mr. president, the majority leader of our house of delegates and the honorable jim cox. >> the general from cornell heights, mr. cox. >> mr. president, it is my honor to present the governor of the commonwealth, the honorable ronald mcdonald and the first lady of a virginia. [cheers and applause]

>> the gentleman from colonial heights, mr. cox. >> it is my honor to resent the

general assembly inaugural committee. -- to present the general assembly inaugural committee. [cheers and applause] >> thank you, thank you, excuse me, great. >> how are you doing? thank you for your leadership. >> let me shake your hand. >> stay dry.

[inaudible]

>> the honorable mark are hearing and family -- mark r. herring and family. [cheers and applause]

>> congratulations. >> the gentleman, mr. cox. >> i have the honor to present the lieutenant governor elect. [cheers and applause]

>> the gentleman from colonial heights, mr. cox. >> mr. president, on behalf of the inaugural committee, i have the honor to present the governor elect, the honorable terrance r. mcauliffe and family. [cheers and applause]

>> the joint assembly will come to order. god bless america will now be performed by the virginia state chorus underspel directorden junior and and choreographer evans. ♪

while the storm clouds gather . far across the sea while the storm clouds gather far across the sea let us swear allegiance to a land that's free let us all be grateful for a land so fair as we raise our voices prayerlemn god bless america, lovethat i

stand beside her and guide her lighth the night with a from above mountains to the prairies foame oceans white with god bless america home sweet home americas homeme sweet

god bless america land that i love stand beside her and guide her through the night with a light from above from the mountains to the prairies foame oceans white with bless america homeme sweet americas home ♪ sweet

[cheers and applause]

>> [inaudible] ashburn, pastor at friendship that just church -- baptist church. ok, how about this? ok, stay right there. pray. us most gracious god our father, we come thanking you for this day you created, and we rejoice in thanking you, lord, for allowing us to be witnesses to this it now dural ceremony of the 72nd governor elect of virginia,

terry mcauliffe, lieutenant governor elect, ralph northam, and attorney general elect. we pray, lord, as we celebrate the swearing-in of our elected officials that you will grant to as ayour divine wisdom runner elect terry mcauliffe, other elected officials, and the general assembly embark on this new journey, lead and guide them -- as governor elect terry mcauliffe. when they are faced with difficult circumstances, remind them as david did to look to be hills, from which cometh thy help. lord, to remember you are the source that is dependable. you are the advocate that is understanding. you are the counselor that is wise.

we pray, lord, that you would bless and protect our first mcauliffe,orothy peter, sally, mary, jack, and dori. allg with the families of of our elected officials. lord, we ask your blessings and guidance upon governor elect mcauliffe's cabinet, elected and appointed leaders, and the general assembly that they may work in harmony for the common good of the citizens of this great commonwealth of for genia -- virginia. as i close this prayer, may the blessess and keep you -- and keep you. may the lord make his face shine upon you and be gracious to you. may the lord lift up his continents upon the and give you peace -- may the lord lift up

ce upon thee and give you peace. amen. forlease remains pending the pledge of allegiance to the flag of the united states of america and the singing of the national anthem, "the star- spangled banner." the pledge of allegiance will be led by united states naval academy midshipman john f andliffe, george r jamison, collin a jefferson. >> i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation, under god, indivisible, with liberty and justice for all.

>> the national anthem will now nader ofmed by sophia midlothian. say, can you see by the don's early light -- the dawn's early light what so proudly we hailed gleaming light's last whose broad stripes and bright stars through the perilous fight o'er the ramparts we watched streaming lantly

and the rockets' red glare airbombs bursting in nightroof through the that our flag was still there star-spangledhat waver yet o'er the land of the free and the home of the brave ♪ applause]d

>> the joint assembly and guests will please be seated. "america the beautiful" will now be performed by the world children's choir falls church itsr the direction of artistic director. beautiful for spacious skies for amber waves of grain or purple mountain majesties

above the fruited lane --plain america! america! grace on thee withrown thy good brotherhood rom sea to shining sea feet tiful for pilgrim whose stern impassioned stress beat oughfare for freedom cross the wilderness america! america! law mend thine ev'ry f

control thy soul in self- thy liberty in law proved ful for heroes n liberating strife who more than self their country loved nd mercy more than life merica! america! may god thy gold refine till all success be nobleness n diviney gai

dream iful for patriot that sees beyond the years hine alabaster cities gleam ndimmed by human tears america! america! theehed his grace on good own thy with brotherhood ♪ m sea to shining sea and applause]

[applause] [laughter] >> the oath of office will now be administered to the attorney by a retired judge for the 25th judicial circuit of virginia.

>> if you would repeat after me. i, mark r herring, do solemnly swear that i will uphold and defend the constitution of the united states of the united oftes -- the constitution the united states and the constitution of virginia and that i will faithfully, impartially discharge the duties as attorneyon me general of the commonwealth of virginia to the best of my

god.ty, so help me congratulations. [applause] >> the oath of office will now be administered to the thetenant governor elect by honorable glenn a tyler, retired judge of the second judicial circuit of virginia. [applause]

>> are you prepared to take the oath? >> yes, sir, i am. >> would you raise your right hand, placed your a 10 on the held by your- wife's hand, acquired by the virginia military economy, and repeat after me -- i, ralph s northam, do solemnly swear that i will uphold the constitution of the united states of america and the constitution of the andonwealth of virginia that i will faithfully and impartially discharge all of the asies incumbent upon me lieutenant governor of the commonwealth of virginia according to the best of my god.ty, so help me congratulations. [applause]

>> the oath of office will now be administered to the governor elect, the honorable terence r mcauliffe. [applause] by the honorable cynthia kinzer, chief justice of the supreme court of virginia. [applause] >> are you ready to take the

oath of office? >> i am. >> raise your right hand and place your left hand on the bible and repeat after me. i, terence r mcauliffe, do that i willar support the constitution of the and thetates constitution of the commonwealth of virginia, and that i will faithfully and impartially dutiesge all the incumbent upon me as the governor of the commonwealth of virginia according to the best god. ability, so help me [cheers and applause]

♪ [applause]

>> i have the honor -- [cheers and applause] i have the honor to present to the sovereign people of virginia the new governor of the commonwealth, his excellency, terence are not mcauliffe -- terencer mcauliffe -- r. mcauliffe. [cheers and applause] >> thank you. thank you. mr. speaker, lieutenant governor, attorney general, members of the general assembly, justices of the supreme court, guests from across our commonwealth and nation, my

fellow virginians, it is humbly and the highest honor of milo -- it is humbling and the highest honor of my life to stand before you today. it is humbling because of the responsibility you have given me and because of the history and .radition of where we stand while makeshift, the virginia state capitol first came to richmond in 1780 at the urging of thomas jefferson during the height of the american revolution. through the courage and sacrifice of so many who came before us, our commonwealth .urvived the revolution freedom was born. aranny was defeated, and permanent capital was constructed here in richmond. this capital, where i stand today, reminds us not only of the are ability of virginia, but of what virginia overcame -- not only of the durability of

virginia, but of what virginia overcame. we overcame the evils of slavery, civil war, and segregation. now, what is 200 years later, virginia has grown even stronger . [applause] relative to the nation, we have emerged from the great recession with an economy more resilient than many of our sister states. we are a stronger commonwealth leaders wisely investing in superior public schools. we are one of the best states to do business because we have worked together to minimize regulation and to keep taxes low. there is bipartisan consensus in richmond that higher education drive long-term innovative growth. and virginia is the national model for fiscal discipline. decided longeaders

ago to put the common good ahead of short-term politics. [cheers and applause] that is the virginia way. it is a tradition that we should be so proud of, but it is also a tradition that must be sustained through constant work by leaders who choose progress over ideology. common ground does not move towards us. we move toward it. [cheers and applause] on behalf of all virginians, i want to thank governor bob mcdonnell for his leadership during the last four years. [cheers and applause] governor mcdonnell provided for the smoothest transition imaginable, and i am so grateful to him for that.

he and the lieutenant governor will long be remembered for their leadership on transportation, not just for the policy accomplishments, but for the manner in which it was achieved. it was an approach that built consensus worthy of the virginia way. it is the same approach taken by to save our aaa bond rating while investing in education, and by governor cain who prudently guided our commonwealth through the recession, but as we celebrate our past, the truth is that we still face serious economic headwinds over the course of the next four years, and, like four years ago, the skeptics are predicting divided government, driven to gridlock bipartisanship. prove theme will wrong again.

[cheers and applause] and, virginians, the spirit of service is built into the fabric of our community. we are home to so many of the founders who sacrificed their lives to build a nation based on the principles of life, liberty, and the pursuit of happiness, and now, today, virginia is home to so many who serve to protect those everlasting rights. join me in recognizing them and their families. [cheers and applause] i remember growing up hearing stories of sacrifice from my father, who served in world war ii. these are the same stories that virginians hear every single night from their parents and grandparents and from brothers and sisters returning home now. we will honor their sacrifice by

ensuring that they have access to the education and health care and career opportunities that they deserve. [cheers and applause] our servicemen and women have the technical training our innovative industry demands, and they embody that strong sense of teamwork, leadership, and drive that makes them valuable asset to our workforce. that is why we need to make it easier for them to get good jobs when they come back home from serving abroad. our community colleges have and will continue to play a major part in this effort. they are our workforce development engine, and over the past year, i am proud to say, i visited each and every community college in the commonwealth of virginia. [cheers and applause] they are preparing our students for the jobs available today and equipping them with the knowledge and skills the

emerging industries of tomorrow. with a community college within 30 miles of every single , theyia and -- virginian are key to attracting and keeping the future industries across the commonwealth, but in order to do that, we must work and achieve adequate funding. [cheers and applause] thatst also recognize virginians expect transparency, and we need to make sure that the decisions we are making, we improper context, and that's why i will sign an executive order later today imposing a strict limit on gifts on myself and the members of my administration. [cheers and applause] members of the

general assembly from both parties who are making significant steps toward this issue, and i will ask the entire general a simile to enact the strongest possible new ethics rules to hold all virginia elected officials to the highest of standards -- i will ask the entire general assembly. is fierce debate on health care and washington, d.c., the choice we face here in virginia is simple -- like the majority of other states, we need to act on the consensus of the business community and health care industry to accept funding that will expand health spur economicand growth and job creation. [cheers and applause] health careger system in virginia as our objective, i will work with the legislature to build on the

medicaid reforms that the general assembly has already put virginia's on tax dollars to work, keeping families healthy and creating jobs here in the commonwealth. [cheers and applause] finally, the great policy challenge we face is diversifying virginia's economy in the face of inevitable federal spending cuts. mr. speaker and members of the general assembly, as we begin this new term together, know that my top priority will be to lay the groundwork for a diverse and growing economy in every single region of the commonwealth. and i know it is your top priority as well.

over the last four years, i have traveled every corner of the commonwealth, and i have met hard-working virginians who are struggling to provide for their families, unable to access to quality education and training that they need to get good paying jobs. they are even worried about just providing healthy meals for their children. when you think about those virginians, you realize that the decisions we make over the next determine will whether parents who work hard their entire life will be able to retire with some security, whether those who return home from serving abroad can find work or start their own businesses, or whether children in numeral virginia can live, work, and thrive in the community where they were born -- children in rural virginia can live, work, and thrive in the community where they were born.

[cheers and applause] and my legislature administration will work to nurture our economy, and we need to remember that our sense of urgency is written by those in virginia who struggle each and every day just to get by and whose dream is simple -- to give their children the opportunities that they may never have had. my administration will work tirelessly to ensure that those opportunities are equal for all virginia's children, no matter if you are a girl or a boy, no matter what part of the commonwealth you live in, no matter your race or your religion, and no matter who you love. [cheers and applause] there is still work to do.

we must work to ensure that the children of new immigrants in equal educational opportunities. we need to ensure that someone cannot lose their jobs simply because they are gay. and we need to ensure that every woman has the right to make her own personal health care choices . [cheers and applause] an open and welcoming state is critical in a 21st-century economy, but it is also an imperative for justice and fairness, values i learned from jack and milly mcauliffe -- jack and millie mcauliffe. my brothers and i were often reminded of the struggles of the less fortunate and our obligation to do something about it. it is that same message that has guided dorothy and me as we have raised our five children in

fairfax county over the last 21 years, and as our children have grown, they have constantly impressed us with their dedication to service and improving the lives of others. it is also those values that shaped me as a person and drove my decision to run for governor. [cheers and applause] in four years, we will all gather again here at jefferson's capital to welcome the next governor of the commonwealth. the she or he takes office, oath of office, i am confident, they will begin to lead a commonwealth with broader opportunity and growing 20% three industries. it will lead a commonwealth that have expanded advantages in pre- k 312.-- in pre- they will lead a