, we feel good that this is something that can be achieved. is withnnifer depaoli civic enterprises. thank you for being with us. the president is meeting with german chancellor angela merkel. in about one hour 40 minutes we will have live coverage of a joint news conference with the president and german chancellor. the nsa spying tactics, the situation in benghazi, and the ukraine and eastern europe, dominate the conference. live on c-span and c-span radio at 11:40 a.m. live coverage of the white house correspondents dinner tomorrow, getting underway at 6:00 eastern time. you can join the conversation on our facebook page as well as the president pokes fun at the media. you will also be able to see the red carpet as we stream it live on www.c-span.org as well as

some behind the scenes perspective of the correspondent dinner. ask for joining us on this friday edition of " washington journal." enjoy the rest of your day and a terrific weekend. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2014] the labor department releasing the april jobs numbers this morning showing employers adding 288,000 jobs last month, the most in two years. the unappointed rate also dropped to its lowest level since 2008 26.3%, down from 6.7%. john thune tweeting labor participation force dropped by

nearly as much as south dakota's entire population. the senate and house are out today, returning next week. in the house, they would take up legislation to increase the business r&d research development tax credit. voteull chamber will also on whether to hold former irs official lois lerner in contempt of congress for invoking her fifth amendment rights and refusing to testify before congress. the senate next week begins work on making residential buildings more energy-efficient. also talk that they may take up a bill requiring the approval of the keystone xl pipeline. that could make its way to the floor. politico, harry reid told reporters after a closed-door lunch with democratic senators on thursday that he thinks there is a 75-80% chance we can work something out on keystone. as always, watch the house you're on c-span, the senate on c-span2. as you heard, today, german chancellor angela merkel visits

the white house. she is there now. she and president obama will hold a joint news conference at 11:40 a.m. later, she will speak again at the u.s. chamber of commerce, addressing trade relations between the two countries. that is live at 2:00 p.m. eastern. >> the biggest challenge especially in the house, where redistricting, in the house, the biggest challenge that a republican will face is from, in a primary, somebody that is more conservative than he or she is. in almost every district that is the case. that is what they are worried about, being challenged from the right. so how is it in their political interest to reach across and make compromises? we have gotten the system that we designed. as a country. created -- in fact, i'm not even sure the people who created these districts fully

realized how profound the implications of all this would be. extent, some democrats, particularly minority democrats, have been in on this, too. in some states, african-americans are to be sure that they have reliably african-american districts, not just undercutting districts, but a large percentage of african-american voters homage to be sure they have representation in congress. >> from the anti-defamation league, changing demographics, redistricting, and the republican party. saturday morning just after 11:00 eastern. later on c-span, the white house correspondents dinner. president obama and joel mchale of "community" headline the event. that is live at 6:00. tv, former on book gang member, community activist, and political candidate luis rodriguez will take your calls

and comments at noon on c-span2. and on american history tv, a history of hawaii and the sugar industry. sunday night at 9:35 p.m. on c-span3. >> health-care industry executives and other health-care officials acknowledged yesterday there needs to be improvements in the health care law but agreed it should not be repealed. the group spoke during the committee for economic development spring conference where they also talked about improving the quality and accessibility of health care. this is one hour. welcome back. the sprinkler to policy conference. our next panel is on health care and impact on the budget. knows, the affordable care act has helped certain segments of the population receive insurance,

but it has not helped everybody. and it has not potentially solve all of the objectives that we set out to solve. health care insurance premiums have skyrocketed in many states, rising by 25, 50, and even 100%. trustees half of ced pulled believe aca should be lifted indefinitely and that they are divided between the nature of the u.s. health-care system, what it should be five years from now. medicare also faces financial hurdles. placeers have not put in needed reforms to accommodate the over 10,000 baby boomers who become medicare eligible each and every day. ced has a caps on committee on health care that is addressing the significant challenges. the subcommittee is in the process now of developing reports on how aca and medicare can be reformed to be even more market-based and to try to achieve the objectives that were set out in the health care reform process.

with us today is a distinguished group of panelist from the health care field. we are looking forward to hearing their thoughts. this will be a two-part panel. experts from the health-care care field, and then we will involve this panel into a panel of current and former members of the house who have worked on health care. first, here to moderate the conversation is alan murray, president of the pew research center on a nonpartisan organization that informs the public about issues, attitudes, and trends shaping america and the world. as we know, prior to heading pew research, allen spent 20 years at the wall street journal on including his position as executive editor of its online division. allen is a member of the council of foreign relations and serves on the governing council of the miller center for public affairs at the university of virginia. lee's welcome alan murray. [applause] you, steve, and thanks

for the opportunity for giving me the opportunity to conduct a discussion. there has obviously been a lot of heat and noise about the affordable care act. in particular, a hot political issue, lots of advertisements. we had the coverage of the website breaking down, and then the coverage of 8 million people signing up. my favorite was when bill morris sent someone out on the street to do interviews and got these very articulate comments from people on why, in detail, they preferred the affordable care act to obamacare. have not seen it, you should search it on youtube. it was amazing how intelligent people could sound talking about that subject. we are not going to do heat or noise today. today we will shed light on the subject, and we have a great panel right here that can look at it from various sides, and i

think, tell us how it is going. to my immediate left, angela braly, the former ceo of wellpoint. next her, tim rice, the ceo of cohen health systems. helen darling, who runs the national business group on .ealth ron williams, former ceo of aetna. raymond gilmartin, former ceo of merck. you have their bios in your packet. i urge you to read them and be impressed, but we will dive right into the questioning here. what i'd like to do, angela, art with you. at the end of the day, there are only three things that matter here. access to care, the cost of care , and the quality of the care. so what i'd like to do is get the panel to talk a little bit about how the affordable care act, given what we know today,

seems to be doing on each of those measures. i'd like you to start with access. >> i think access was ultimately the goal, when you think about the provisions in the affordable care act that related to cost and quality. they are either not there or not in place at this point. so we really have not seen the impact of that. you are right, there has been so much heat and smoke about execution, implementation, that it is hard to see where we are, but we have good data now. you probably have all the numbers in terms of additional access. there has just been a lot of disruption. ultimately, that is the most virtuous goal, i think, of the affordable care act, and one that a lot of people are striving to achieve. i think it has been confusing. i do not know that we have the clarity yet around the numbers of who is in, who pays their premiums, and ultimately, what access they got. we also do not know on a net

the disrupted previously insured people were. i think it will take a couple of years before we really understand those who had previously been insured, and the role of the employer. on what yous, based know, will it expand, is in expanding access to health care? >> yes, it is expanding the number of people covered by a ,ealth insurance benefit plan whether it is subsidized, provided by government, or bob on the private markets. >> anyone disagree with that, have expanded access? >> i think the missing piece in a lot of states that did not expand medicaid, one of the tenets of the plan, and a supreme court decision -- i'm from north carolina. they made the decision politically that they are not going to expand medicaid. that is the piece that i think is missing, angela.

a lot of the numbers were predicated on medicaid expansion and that has not happened yet. have 8math here is you billion people that signed up for the affordable care act but you also have people losing their coverage or dropping their coverage among businesses dropping coverage. do we have a sense of how that nets out? >> i think we do not know the answer to that. we also do not know -- angela said this -- coverage that was lost, if it was any good, in terms of whether it covered anything that needed to be covered. million, there are probably plenty of people who did not have good coverage. even if they lost their coverage -- in many instances, they lost the coverage because it was not good. is that a loss? i think probably not. the big problem, no, is we are already, in certain parts of the country, costing so much more than we used to cost, and we

will be using services. the first quarter, we just saw yesterday, announced in the first quarter of 2014, we had a 9.9% increase. that is the largest increase in health-care spending in three decades. >> let's stick with cost. ron, i remember you saying at the time the affordable care act past, that there was nothing in there about cost. worse than you thought, better, what is your sense on cost? >> on cost, it will cost more. we have expanded the number of people who have coverage, which is a very good thing. if you are a person that did not have it and you have it, that is a terrific improvement in your status. we are also paying for things that we did not pay for before. so people have much more copperheads of coverage you can argue that in some cases there are things that we should or should not cover, but it is covered. the answer is it will cost more to cover more people and provide

more copperheads of coverage. fori think the challenge the next probably three to five years is to figure out how do we figure out the rate of increase so that we do not end up with a rate of increase that is unsustainable, but we have to do it in a way that helps the patient. >> we also have to get rid of the overuse, waste, and harm in the existing system and which is estimated by the institute of medicine to be $750 billion. what we have done is overlaid on a completely dysfunctional system, and a costly and wasteful system, coverage that will probably cover lots things that were needed for people who need care, but probably just as many things that are not needed, and in fact, may be harmful to them. when we cover people, we cover them for whatever they might be covered for coming and we already know there is a lot of waist and harm. to the mosthat gets

intractable problem right now in health care. we are still in a payment system that is volume based. we are in a volume-based payment system with providers who believe and understand they will have to be in a high efficiency, high quality environment at some point, and it will pay, at some point, but it does not yet. >> to tell a story about that, knowing we have to make the transformation into the future, where it is not volume based but based on outcomes, we decided to invest in a accountable care organization. we have saved about $10 million for the medicare program in the first six months of implantation. in our region, we did not know this when we agree to do this, our medicaid per beneficiary is 20% below the national average to start with but we've lowered it even more. we can share half of that with the government, so we get $5

million to share with our doctors. we lost $47 million in hospital operations last year because we lowered admissions, visits, a lot of things that were unnecessary that the old system was based on. >> so no incentive to do the right ring. >> we are in this awkward position right now of trying to get ready for this new system and a new payment mechanisms, before the payment mechanisms are really there. it is just a terrible time. i'm not sure how long my board will tolerate me losing $47 million in our operations. >> let's talk about what it will look like 3, 5 years out. if you survive. insurance,are in providers. i have talked to people who run large businesses who say this will save money because what will happen is, we are going to drop coverage and individuals will have to pay, and they will demand cost control. >> what the goal should be is

basically dealing with the waste and inefficiency within the health care system as a way of saving money, as opposed to companies saving money by shutting their employees. >> on that point, there was a study this morning by mcgraw-hill. -$800 billion will be shifted from businesses to consumers over the next few years. a few yearslook out, then you have to say on the what is the underlying philosophy of the affordable care act, and is there a better underlying philosophy that would cost control, or if you will, productivity, and higher quality? set the stage for that with their 2007 report, in which they advocated a market-based

approach. a lot of the debate was in health-care. i've been involved in this for 30 years, if you will, involved with one of the original founders, when i was part of the health care leadership council. otherand i have seen each many times incident. advocating a market-based approach. up until this point, most of health policy has been really in favor of more of a command and control, or a planned economy type of approach, having no confidence that markets work in health care. but i think we are seeing that that is not the case. i think where we have to go, going forward, is to close the gap from where we are now and what a market-based system would look like. >> a lot of confusion on this point, but command and control, we see this in other countries, single-payer plans. this whole framework that was bone of the portal market system was a single-payer

system. >> when you say a planned economy, in some respects that is a market system, but with heavy government involvement in terms of the management of that economy. the outcomes of that, by the way, in other countries, is that people with resources and the opportunity are moving out of the public systems and into private systems. >> before we go any further, let me ask all of you, a show of hands on the panel, which of you supported the affordable care act at the time? >> we have to do something. >> it is a difficult question. >> it is more new one than that. -- nuanced than that. >> i supported the objective of making sure that everyone got coverage and we had a sustainable way to do that based on market-based principles. theymeone came to you and

asked, should i vote for the bill? >> i would say, maybe not that bill, but another one, but there was no other option. speaking for myself, most supported the intention of the bill. the bill that was crafted, many people did not expected to be passed in the way that it was passed. >> you agree with that? >> exactly. as i mentioned, i've been working on this for 30 years, looking beyond the pharmaceutical or device industry. basically, dealing with the questions of hoping people gain more access to care, but with a different underlying philosophy. >> let me add a second question. .ll of you had to do something ok, maybe we can vote for this thing, but hasn't worked out better than you thought, or worse? there were some significant concerns about some of the technical elements of the faced,hich is what we

why we were not recommending voting on the bill. i think the execution -- you brought it up in the beginning -- has been much more difficult than people anticipated. and yet, to answer the question fully, there has been delay on the implementation of mandates. so we do not even know. some huge changes in the hospital industry. i will give you an example. readmission rates, 30-day medicare readmission rates have been stuck around 20%. that is a quality measure. >> the changes in the bill start to penalize hospitals for readmission. that dropped to 70% in two years. it had never dropped. -- 17% in two years. so this has had a huge impact on quality.

a good impact. there is a lot of nuances in theithere. people safer obamacare, but it is improving quality, we are looking at access differently for our populations. we are now accountable for the care of the population. i have seen the joy come back in the practice of medicine. we have 800 physicians in the aco and they are really enjoying this because they are redesigning health care. there is a lot of excitement as well as concern about other parts of the bill. always have to remember that the act had 10 titles. all of the heat and light is principally around the insurance market reform components. there is also a huge difference to join with the act required and what the regulations produced. i think a lot of the challenges can about through the regulatory process, which is a difficult process with lots of competing interests, and i think, could've been handled much better.

i think there have been positives. i think we desperately need more research. some groups have problems with that, you whole independent payment commission has yet to take effect. so it is a little early to declare victory or defeat on it, but if you are one of the people that did not have insurance, and you have insurance today, it is a huge win. >> ray talked about going to a different philosophy, but the next question i want to ask is, does anyone on the panel think we should repeal the affordable repeal isor that even a realistic possibility that we should be talking about? no. how do you get a different policy if you are starting with this bill? like if you it look were pursuing this from a different philosophy, a more market-based approach? this is how we want to get there. for example, in the ced

position, in 2007, the same as the position today, is that you would have a refundable tax credit to buy a basic policy as opposed to a more public it system where you are offering subsidies. >> so you change the tax credits and subsidies into a straight or fundable tax credit. >> exactly, simplify all of that. you would basically make more insurance options available beyond what is on the public exchanges. >> less restrictive options. >> more tailoring by insurance companies to their consumer needs. which would have different price points. and then on top of that, more channels with which to buy it. in addition to public exchange come a big growth in private exchange, directly with the insurance companies. once you have a need, you have money to buy insurance, and a product that fits you, that is an incentive to buy instead of having to mandate to do it. one last thing, how to get there

is not a question of her appeal or replace the what is the best legislative strategy to a conference what i'm describing or ced is describing to represent this different philosophy? >> let's talk about that. you have a couple of situations here. one is a congress that cannot seem to do much of anything, and something that is as confiscated or risky as opening up the affordable care act is fraught with problems. we will talk about this in the next panel, but it is hard to see that change anytime soon. second, you have a political environment where insurance companies, drug companies, and even to some extent, provider networks come are the bad guys. people do not always want to listen to what you have to say about how it should be changed. question, given those facts, given that environment, how do we get to a better place, angela?

>> even that discussion, and ced 's 2007 report still focuses on coverage. to your three points in the beginning, that is not the end-all be-all here. if we have solutions that lead to coverage, what about solutions that lead to cost and quality? what i worry about from a political perspective is do we have the ability to sustain programs that work, that produce quality? at wellpoint, we bought a emore.y called car m at the end of our lives, that is how we want to be cared for. we have seen through history, through the medicaid program, there is a lack of political will to sustain programs over long periods of time that are innovative.

actuaries will tell you they want 10 years of data, but you need multiple periods of time to pay for things that are preventative and to see the results of that effort. and so i think the longer-term conversation we need to have in the political realm and in the policy realm is how do we sustained preventative focus and providing cost and quality in the system and see the results over time? >> and what is the answer? >> i think the answer is to focus on those things that we and not have unreasonable expectations in terms of the reporting and the data, in terms of letting the actuaries proved that it works over a sustained period of time. >> we have to be realistic about the political situation now. the reality is there are things

like, anything that can be demagogue will be, in the short and long-term. as it sounds, starting over, as ideal as it may be, is just not practical. .t probably will not happen if the law were repealed and we had to start over, we would be here for another 30 years. keep in mind the last time we had major legislation, 1965. it took a long time and it was not because there weren't a lot of people trying to make these things happen. there were senators, congressmen, a few here, who devoted their lives to try to reform the u.s. health-care system. there was this unique combination of elements that the usual kind of -- sausage making, as we refer to it, a law that has all sorts of things in it that is different dysfunctional, and regulation written in ways that goes way beyond the law, which i guess you mentioned.

happen.cally, that will the way to deal with some of these things is to put pressure to modify and take away some of the things that are not working, including her hats making the people sitting out in exchanges less regulatory minded, and those inside hhs who think the answer to all problems is to regulate more, any good idea out there that the private sector has, they want to regulate. changing people's attitudes, modifying things, keeping them from doing things that are harmful, and then not try to start over. that is what we would say. >> i think we have some great examples that we could emulate. for example, the way the exchange model is structured today, the only way to get the used tofor the member purchase through the exchange. if you look at medicare advantage, a highly regulated program, good quality, has had many innovations, the member can

any health plan they want, but they are buying an approved and regulated product. one of the simple things we could do is simply eliminate the exchange as the point by which the purchase need to be made. that way, we eliminate another level of regulation. we have cms, we have the exchanges, the insurance commissioners, and all of that represents another layer of complexity. the other thing we have to the wholeis that hospital and care delivery system will be asked to change its business model. changing your business model when your current business model is what pays the bills, to a model that does not provide you enough revenue, is a tricky proposition. what that means is, the institutions that will fail at it will be the institutions that serve the most needy populations that we have because they already have been margin, receiving subsidies from local

government. so this question of how we as a country move to a different kind of model that is based on value created in the system and not paying for activity, is a very public hated but critical issue for us to make the kind of success we want to make. >> if nothing else happens, will we get there? in other words, are the forces in place to in evidently pushed us in that direction, with a lot of pain and disruption, but are we headed in that direction now regardless? >> it's not clear. if you look at the data on cost and what could happen, even everything we are saying, which andmove along incrementally maybe even slowly, will be blown up if we do not do something about cost. the underlying forces that are driving cost, including the ones we have heard about, and now, ideally, we will in sure many

more people, we are turning everyone into the blank check that has gotten us to where we are today, with the third-party payer. a government or employer. there is nobody there sitting there saying we have to control cost. >> if mcgraw-hill is right and all of these expenses will be pushed off to the individual, then the third-party payer system disappears and individual start put pressure on cost, don't they? >> as long as we have out-of-pocket limits and subsidies -- there are lots of people who basically get free care. until that changes in a much different way, we do not see evidence that it is controlling cost yet. in terms of controlling cost, ron mentioned changing the , perhaps more controversial a provocative approach is to allow new business models to enter the

health care delivery system. for example, one of the co-authors of the original ced report, jerry grossman, wrote about --ook, talking it is called the innovators prescription. a prescription is too disruptive innovators to enter the market. retail clinics, specialty hospitals, chronic care ofpitals, as a way delivering health care in lower cost setting but higher-quality outcomes. >> some of that is happening. >> we have had this discussion. my uncompensated care last year was $225 million, for taking care of people. do not say poor tim, i just shift that to everyone else. but that is how we are subsidizing care, we are moving the dollars from one population to pay for another. as we allow for innovation, i'm sure -- bigger and out how to

work with retail clinics and incorporate them into our i.t. clinics. we also have to think about those safety net providers, like us, who do not have a lot of surgical centers in town. make money there. and believe me just with the medical complex patients. eric is some balance there between the free market and acknowledging that those of us that do safety net provisions have to be detected because we 24 as a community service. >> i think the key to it, as you were saying, one could envision a move toward a more integrated delivery system, beyond accountable care organizations, which are loose affiliations, to integrated delivery systems. one could imagine an integrated delivery system that had within it a specialized entity. >> we do.

>> so that you would be benefiting from the ,igher-quality, lower cost delivering that in a lower cost setting, at the same time, would benefit your hospital. >> i agree, we have a standalone women's and children's hospital. center.a ob quality is amazing. we have one hospital that does behavioral health. we are close enough where we can do that across the region. i absolutely agree with that premise. i also think as a nation, we need to face the fact that we need to close some hospitals. some hospitals do not need to be in the small communities. i have a hospital in a rural area and there is another 114 miles away and there is no rhyme or reason to have two hospitals 14 miles apart. i think the communities hate each other, starting with high school football, and they would never go to the other community for hospital care. but we cannot have an economy

that supports two role hospitals or two miles apart. it is a tough decision because in both of these cases, it is the largest employer. so they're unwilling to have a discussion -. >> being involved in the medicare drug benefit and so on, i am more optimistic than i think the conversation has been up to this point. some of the things we are talking about would have broad public acceptance and i think bipartisan support. in fact, represents changes that have been made administratively to the affordable care act that could just be reinforced as this is how it should be designed. with thattick political peace. you say there are some of the things that have broad bipartisan support. i do not know what bipartisan legislation looks like anymore. the affordable care act was not bipartisan legislation. do you think this problem can be fixed on a partisan basis, angela? >> that is a tough question.

the problem needs to be fixed through the elements of the free .arket that are still there for example, this discussion about what tim has to do. going back to the past, when we providers, with the specifically, and then they make the decision, if they are compensated through a risk sharing mechanism, they can make the decision about do i need a person to go into the regional hospital, or can i do t elemedicine? before we look at legislative solutions, we ought to make sure back if at all, we scale some of the efforts to regulate what i think could happen if the free market would get into the risksharing model. >> before we leave that, let's

mention the sustainable growth rate, sgr. here is a problem that almost everybody agrees needs fixing. it benefits the most respected .eople in the country, doctors everybody agrees it is a bad idea. everybody agrees it is dysfunctional, in every way, and yet, we cannot pass legislation that fixes the problem. and that is politically because we cannot pass it. we rarely have that combination of factors that are operative. i would like to be optimistic but if we cannot solve something as simple as that, how are we going to sell something very complex, like a hole that would affect the entire health economy? also, along the lines of the conversation about what changes you would make, one of the things that i think has been

left out of the current design is the physician-patient relationship, and this whole idea that we cannot expect positions to do the right thing unless we give them incentives. professionenter the and are intrinsically motivated to do the right thing by their parents. similar with hospitals, in time -- in terms of trying to achieve quality by very targeted incentives, locks in current practices and limits the creativity that tim would have in terms of how we would make a dramatic change in the cost truck sure as a hospital. american manufacturing in the 1980's, under the threat of japanese competition, moved away from micro-targeted incentives, to a broader involvement of teams of people within the organization's that were intrinsically motivated, to use

that term, to improve quality and lower cost. i think hospitals are following that same approach here the question is, if you micromanage, how successful will you be in terms of having these things be affected? >> the only point i would make , accountableam care, etc., has a market towards hospitals instead of physicians. i spent a lot of time in california running health plans there. some of the most effective group there were physician-led group to view the hospital as a cost center, and view the selection of the hospital as part of their care delivery and value creation, both for the patient and for the broader system. so i think this is an example of how, when you regulate bias, you pick winners and losers, separate and distinct of market evolution.

the best run lands in the country that are integrated systems have strong physician leadership who bring their strong sense of clinical professionalism, and a good business people as well. pat is an example of where getting the market back and that level of leadership, some community hospitals will emerge as winners, which is terrific. in others it would be the hospitals. -- physicians. >> we do not exist to win something, we want to care for the community. i think every community has to figure that out. there are communities where physicians have coalesced and created mechanisms and then run hospitals in. the hospital is part of that network. we had to do the opposite. physicians did not have the capital. so we have a very strong physician organization, and i jokingly say, sunday, our six hospitals will hang off of that position aco organization.

hospital will be deemphasized so much more in the delivery system of the future, we are restructuring our leadership team with that in mind. there is so much more outpatient focus, -- we have 360 employee's positions. it change the organization. that hospitals need to consent, but i do not like the idea of winning and losing. that ireminded of a nun worked with once who ran a hospital effectively and instilled in me, no margin, no mission. >> my worry is no margin, no job. >> let's talk about the patient. in this care more model i was talking about, they have as many social workers as they do nurses. , ifuse some of the issues

you are being very patient centered and the issue is, is that senior medicare advantage member going to be at risk for a fall? then maybe you need to send someone to their home to see if their surfaces will create a fall. if we are really starting with the consumer, in this case the patient, and work backwards from that, those are the solutions that we need to allow the free market to evolve in the health care delivery system. >> let me tell a story, angela. now the incentives within the aco is to save medicare money, and you have how much medicare is spent on the population in prior years as your marker. if you come in lower, you get a share of the savings. six 2000 medicare patients assigned to us. we go into the data and we find mary. 133 has been to the er times in the prior 12 months. that is amazing. we have seven ed's in the

system, and so she was smart. her problem was, she is we'll parent -- wheelchair-bound. ae does not have a wrap, is diabetic without ever to rid of. every few days her diabetes goes out of control. she cannot get out of the house and calls ems. they have to take you to the hospital. every time they would come, they would say, which one? she would come in and get fed, get her insulin, and get taken back home, put back in her house without a real chair rep. we have become accountable for mary. we got a local nonprofit to build her a wrap, we buy her a $100 dorm refrigerator, we work with the company to get visits. in the last 18 months, mary has not been to the hospital. polity of life is so much better. think about what we are saving in society. we have turned incentives on their head. mary does not really need a lot

of medical care. she really needs social care, meals on wheels, and that sort of thing, that we have to restructure the incentives. up to theopen it group in a minute. let me ask you, a quick show of hands, i know you have talked about what you think needs to happen. put your forecasting hat on. any chance of major legislative change to the affordable care act over the next two years? if you think yes, raise your hand. really? you are a bold man. next four years? we are getting there. 10 years? all right. questions. >> angela, you talked a couple of times -- tim was referring to this as well -- about the long-term perspective of this. i'm not a health-care expert, but i always thought the basic

premise of the affordable care act was to give people insurance . they will take more care early on and fix problems so that at the end, since we are still not a society that does not give care, we do not have to indicate or dealamputate legs with a very expensive things at the end. if that was the premise, you would expect to see in the early years what we are seeing. is that premise right? if it is, how come we are not talking about it like that? >> i think there are couple of things. really, it will take the transition in the delivery system. in my example, if you are paid more for the disease care than the preventative care, then you will still end up with expensive disease care. he made more money on mary before.

that is part of the reality we are talking about. though, thereg, were attempts in the bill, taking away some of the consumerism because it was believed that they were paying for things upfront. one of the trends we were seeing before that was that consumerism was having an impact because there were accounts that people owned and paid for their health care. i think maybe we took one step forward and one step back and that is why we are not necessarily seeing everything you are talking about. >> actually, we are going to spend a lot more money, and the amount of additional service use that we will pay for at ever higher prices will still be more than whatever we save on mary. there is prevention by itself broadly, does not save money.

it saves money in individual cases. if you find one lump, and that person gets treatment at an early stage, that person is going to suffer less and cost will be screening millions of people who would never have that lump. this has been well-documented. through case after case, and one of the things that happened with the affordable care act -- and this was not good -- they said any service, so call preventative services that meets certain scientific criteria by an independent body, will be paid for 100%, no deductible, no cost sharing, for everyone who is covered. that is the good news. the bad news is, that particular group is a group of scientists who know nothing about coverage decisions, they know nothing about what happens when you authorize something that is, in

america, endless in its ability to custom money. that has already happened. , if we built in a future do not do something about it, and this new services -- endless new services that are defined as preventative, screening everybody to find them, and then we will pay for all of that, and that will outweigh what we say from the cases that we find. maybe we want to do that as a country, and in fact, we have decided that we do want to do that. maybe it is the right choice, but it will be incredibly expensive and it will not save money. it may be the right thing to do, but it will not save money. ,> just a brief comment something we have not talked about much, the health literacy that consumers have in the engagement of their own health. patients and we sent, your medication is free, no cost at all.

we had another group where they had david co-pay. the good news is, the group that was free did better than those with the standard co-pay. the bad news is, when it was free, we got people to take life-saving medications 55% of the time. it gives you a sense that consumer engagement, literacy, understanding medication compliance is a huge issue, and simply because it is covered and available does not always mean that patients always take it. >> other questions? >> i have a question about cost, talking about cost as if it is the same across the country. it is orders of magnitude different, even in areas of the same geography. to what extent is massive release of data that cms and others are doing going to change the equation, and is there

anything that we can do to make it more productive to help influence cost and quality? >> it would expose it, and that may cause action. but by itself it will not do anything. we have documented for 30 years that variation by area, and it's huge. it is interesting. what is happening now is now that the federal subsidies are what we will see is, if you live in minnesota, because of the prudent practice patterns and efficient delivery system they have there, they actually cost a lot less. peoplee will be very few who will need a federal subsidy in minnesota because the costs are so reasonable. you go to oklahoma city, mississippi, south carolina, north carolina, you will see that there will be lots more federal dollars going into those markets because they are much costlier systems, less efficient, and more unhealthy

people. maybe when they begin to do the national analysis and see how many hundreds of billions of dollars are going to some of these places, as opposed to -- by the way, they are paying higher taxes to cover those. so the federal match on that will be considerably -- the minnesotans, all of their healthiness and good practices will cost them money comparatively because they are paying for all the laces that are inefficient and full of people who are very unhealthy. help, transparency has to has to improve the situation if people see some of the craziness in the system. >> transparency also has to extend to what is the quality of care that an institution delivers. there was an article the other day that highlighted the fact that a study showed people, maybe by some intuition, referrals from other people, but even without information, were

choosing hospitals with better outcomes to have the procedure performed. it was a significant difference. you can see admissions going up in hospitals that were higher-quality, going down in places that did not deliver the same quality. i think transparency about -- now, theres are difficulties with that because people are concerned, like ourselves, the data is too complicated, hospitals have different demographics in terms of the patients, but i think those could be solved. as consumers we are very capable of interpreting quality data. -- i was a presentation was involved and initiated a program for health system improvement. by ard a presentation sophisticated person saying that we, as consumers, do not understand quality and we toically attribute quality

how nice the food is and the nurses and things like that. when you have the data and you realize the range of possible outcomes, in terms of surgical , that consumers are very sensitive to quality difference. i found it interesting. the study said that even if the information is available there is a way to intuitively gain access to it and choose the better hospital. >> you agree with that, tim? >> we are the communities health care system, so they often new -- they ought to know what we do well and what we do not. advisers, andily they hated it. because it is complex. what matters to you when you are getting your knee replaced is very different than someone getting heart surgery than someone having a baby. you are right, we just have to put it out there and let people figure it out.

but we have not found the holy grail in a way to do this that consumers really like. isthe heart of that question really about, shouldn't transparency drive behavior? ats a colonoscopy is $1500 one place in town and $5,000 at another place in town, the hope of those kinds of tools, the hope of what the dartmouth atlas project has been working on for years, is to try to point those things out. at the heart of the ced proposal, even in 2007, was to say, in order for you to be incentive to use the tools and then follow with behavior, you need to have something at stake, which is the consumers and piece of health care. if my colonoscopy is free, whether i go to the $1500 one or the $5,000 one, it is not a match. have something at stake as well as quality data and price data.

you need both or you cannot make a decent decision. comments, cries of frustration? one here and one in the back. >> i just wanted to thank ron and ray for continuing ced leadership and refreshing the ideas that ced has been a leader in over the years. i will be sure to provide ample comments into this work as we go forward. some supportive, some challenge. helen, you have been fantastic in terms of pushing the provider systems and the carriers to really look over the years. tim, this is the first time i've seen you speak. my goodness, we have to keep you in this discussion because you are doing the work that needs to be done and you have highlighted exactly all the problems. angela, you've been great in much the same way. the question i had, and i'm glad

you got to this point, it ties back to health as an economic entity in communities, and this issue of health-related social services being used to change the nature of the health care that is being provided to people . how do we make that shift? right now, there is -- those exist in the community but not nearly at the volume that you would like to see to spread it across the whole community, and at the same time, how do you do it in a way and does not medicalize it create the same kind of economics that has been a challenge for us as we have done that for other things driving cost up? piecehave a new strategic around community health. we want to become one of the top 10 healthiest communities in the country. where do you even begin to chew on that elephant? we are not trusted across the

community. we are a bureaucracy. the more we cannot control something and get people to the table -- and a lot of our readmission work has been that way. we do not want to control that. we want to get health care providers and hospice to run their organizations. but get them at the table to work with us. we have a very fragmented social system to support which need some organization. >> i have seen some great models where that has happened. some of the best delivery systems in the country, kaiser, intermountain, are combinations of health plans, physician groups, hospitals, a lot of the health plans are created with virtual and contractual relationships, where the plans do what they do will, and a link services together. whether it is in the workplace, behavioral health services, and create a model with the right economic incentives. the system has to be able to take the resources and deploy those resources in ways that

makes sense to manage the health of the population. that might be a bus to pick them up to take them someplace, it might be home visit, it might be a lot of things for which there is no code for reimbursement, that can result in better quality of care, better outcomes for people in the community. that kind of collaboration is fundamental to this next level of innovation. >> my new partner on the health care delivery team is a carpenter to build wheelchair wraps. >> one thing that will be interesting to watch, and you will be in it, is the dual pilot programs. these are people who are eligible for medicaid and medicare, and so we know their needs are beyond medical, very social and community oriented. so if we create the right infrastructure, create the right program within which people can

innovate, that will be an interesting place to watch. >> i use merck drugs i'm sure, here and there. i want to commend you all. looking at america from abroad, i have said that americans are problem solvers and this is part of our dna. fornt to commend the ced putting this type of panel together. my question is, where is the light at the end of the tunnel? it?do we do is the answer in the private andor coming in there forcing the politicians into a seen notwhere they are

to solve that or are they going to do something? >> it is a perfect way to end the panel. i will make you all answer it. tell us where the light is at the end of the tunnel. >> i would say the light is the private sector. problem is we have unhealthy people who continue to make lifestyle choices that work against them and drive a need for the kind of care we are talking about. , fromtions from diabetes untreated diabetes, medicare pays a lot for amputations. we could stop that if we change the way we thought about preventing a whole variety of things. the private sector, almost all programsloyers have

that pay or make somebody pay a penalty if they do not begin taking steps to choose and live a healthy lifestyle. it is almost universal. the number of programs are fantastic. they are exciting and making a big change. >> forget washington, focus on the private sector. >> and the real world. >> i will second that. i think they are coming. i have been talking to people who have been tying to come up with a new app or data analytics to change the health care system. frustrated with the pace at which health care changes. i think when they start to hit, we will see real opportunity. >> i am excited about the

future. i think we have the chance to redesign health care delivery. despite what happens in the city, we are going to do it. i am seeing some great things happen in spite of what might happen here. >> i think the light at the end of the tunnel our collaborations supported by the large national employers. we have about 15 million members who were in the fortune 100. these are sophisticated companies who cared a lot about workforce, invested in innovation, they were always looking for the best and brightest solutions to get their workforce engaged. they are really the source of the caren, at least in management, case management, consumerism transparency, engagement, you name it. you couple that with collaboration on the delivery

system and i think there is a pretty strong -- >> the only question i have on the emphasis of employers is if they're going to offload this responsibility. >> i don't see that. employersr-term -- don't do it. you have the workforce you have because you need them in order to achieve competitive advantage. you do not want to create things that create dissatisfaction in said turnover. >> the big guys won't do it. >> i don't see it. >> having labeled myself as the , in terms ofote legislative changes happening in -- iears, i think that foresee an emerging consensus about what the next step should be to take us to a market-based system. asyou thought of it

straightforward as the administrative changes that have been made already, recognizing access to a variety of insurance plans and that desire -- and secondly that there is a solution to affordability through a refundable tax credit that everyone would have. i think that these are fairly thatghtforward approaches a consensus in congress could be built around. -- what i would say is that the importance of that, the great thing that tim is doing and other health systems are doing in terms of innovation , in order to continue that, we have to make dramatic changes. >> this is the perfect segue. we have four members of the panel saying forget washington, the interesting stuff is happening in the or. ray sees an emerging consensus.

you have special glasses there. [laughter] we will have four politicians on the stage next. >> we ended up with a bipartisan program. >> more power to you. great panel. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2013] >> do you want us to get the next panel appear right away? away?here right >> the labor department released the april jobs numbers this morning. employers added 288,000 jobs in april. the unemployment rate dropped to its lowest level since 2008, down to 6.3% from 6.7%. hiring was broad-based and

included higher-paying jobs. reactions from speaker boehner who said, while it is welcome news that more of our friends and neighbors found work, this report indicates more than 800,000 americans left the work force last month, which is troubling. nancy pelosi also with a statement that said, our economy continues to move forward with the 50th consecutive month of private sector job growth. too many americans are still waiting to feel the effects of the recovery. focus of the white house will be on foreign-policy issues. german chancellor angela merkel is that the white house. they will have a joint news conference coming up in about 35 minutes or so. we will have that live on c-span. merkel -- chancellor will speak at the u.s. chamber of commerce. that is live at 2:00 p.m., also live on c-span. >> c-span's newest books.

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your security over your privacy or privacy over security? >> hear more from the top winners on saturday morning at 10 a.m. eastern on c-span. "the wall street journal" reports that there should be no more sanctions. several of the biggest names in german industry have made their opposition to broader economic sanctions against russia clear in recent weeks. as a result, germany's position is unlikely to shift, barring a dramatic escalation of the conflict in ukraine. we will hear from chancellor merkel and president obama. in the meantime, a washington journal discussion this morning on the effectiveness of sanctions. host: our friday roundtable focusing on the issue of sanctions as a foreign-policy tool, do they work?

carla anne robbins is a senior fellow at the council on foreign relations. mark dubowitz of the foundation for democracy. "the wall street journal" the president meets with angela merkel. german companies opposing sanctions, can you explain. guest: german companies opposed sanctions against iran, it is no surprise they are opposing sanctions against russia. the german corporate lobby is very strong. it is no surprise. it is a very strong economic relationship between germany and russia. including former german chancellor, who is making a lot of money helping natural gas flow from russia to germany. no surprise. angela merkel is under pressure. host: one of the fundamental flaws of sanctions as a foreign-policy tool? guest: it is limited and a blunt instrument but also there is no other choice.

not a lot of other alternatives. politics are flawed, too. germany is russia's largest trading partner in the eu. they have more economic interest in the u.s. and its owing to be hard to pressure russia and a major way unless the europeans are willing to play. host: let me share what jack lew told members of congress when it came to sanctions and at russia and the wealthy individuals linked to president putin. [video clip] >> if you look at the impact on russia's economy, it is misleading to look at what happens day by day. you have to look over the period of time since russia went into crimea and since we have imposed sanctions. there has been a substantial deterioration in rush's already weak economy. we see and the stock exchange on the exchange rate.

they were downgraded to one notch above junk. the rationale on the bond rating was in part with sanctions. how do we proceed in a careful way? has acknowledged that the sanctions are creating pressure. we need to keep our options open. we are prepared to take more action and we have made clear we are prepared that the policy of russia does not change. the reality is working in partnership with our allies is the most effective way. we are seeing movement there. the europeans made additional designations. host: back to the issue of partnership.

one of the big challenges are what companies and what countries want, we are seeing that in germany. guest: partnership is important. we need multilateral sanctions. karl is right, the trading relationship between the u.s. and russia is worth by eu-russia trade. there is no substitute for u.s. leadership and we learned that in iran. the european nations did not want to impose sanctions, the u.s. administration and the u.s. congress really put these companies to a choice, do business in iran or the u.s. it was u.s. leadership that allowed sarkozy of france to get the other 27 eu members to do something meaningful. that is what is missing right now. host: carla anne robbins, another headline from "the new york times." peter baker says the sanctions have limited impact. he makes a point that many issues involving russia's economy predates sanctions and even pretty the annexation of crimea.

guest: the piece makes two points. one is that the russian economy was slowing to begin with. it was in pretty bad shape. a lot of the impact of the huge amount of capital flight, the drop in the stock market and the value of the ruble, while it might predates sanctions, it began at the time of the crimea crisis because people were expecting sanctions. the market had already factored in the crisis. if you stay at the current level of sanctions, i would suppose people would say it was bad but not as bad as we thought and we might want to go back in. that is the argument for why you cannot stay where you are you will have to ratchet it up to drive more people out or prevent people from going back in. host: why sanctions, why are they used? guest: this is the ultimate example, what else are you going to do against the russians? they have nuclear weapons, you're not going to talk about a

military intervention. they are violating international law and doing a very bad thing. one needs to find ways to pressure them. the problem is you have to think about what you want to accomplish, you do not want to destroy the russian economy. you want to change putin's mind, that is a very hard thing to do because it depends on one person who does not seem to care about his own people. that is always the case with authoritarians and sanctions. guest: i agree but i think sanctions are becoming the default instrument of statecraft in the u.s. and being used in isolation as a silver bullet. sanctions are never a silver bullet. they might be silver shrapnel, they can would an economy already suffering. they have to be used as a tool of statecraft. i think the administration made a mistake taking the military option off the table, not talking about sending u.s. troops to ukraine.

what about military support to the ukrainian military so people can fight? the president is too quick to imagine a sequence of the ponzi and sacre -- the president is too quick to imagine a sequence of diplomacy and sanctions. you have got to arms were diplomacy and use sanctions and the threat of military force or military support to provide teeth to diplomacy. putin knows he can bear the brunt of sanctions and he has his sights set on eastern europe. i don't think there is anything we can do right now with sanctions alone. host: another conversation with some other countries, you wrote about this for bloomberg.com with regards to syria and north

korea trying to choke off economic lifelines in these countries. and you point out that sanctions rarely work. guest: there are cases where they work, open the doors to negotiations, or changed invested politics. it has had no impact on north korea and is having no impact on syria. mainly because in those two places there is not a lot of leverage or trade in the first place. the russians are supporting the syrians, the chinese are trading with the north koreans. these are two awful governments that do not care if their own people are suffering. you can have punishment on an economy and you can start of a starving people, in theory, if your government does not care,

that is not a tool that's going to be a silver bullet. there is a lot of silver shrapnel, as you said. host: we heard from senator bob corker on the foreign relations committee, you sent out a tweet when he appeared on "face the nation." we heard from senator corker and other republicans trying to oppose more sanctions. guest: i think they are ratcheting up sanctions and pressure on the people around putin trying to change his mind, it seems like a good idea. what you do not want to do is try blogger and say this is a substitute for action. that is the mistake in syria, don't worry, we will put sanctions on or threaten criminal court action. when a guy like assad does not care and the russians are supporting him. they have to think about pressure on putin and the people around him. ultimately, if he continues to do what he is doing, more pressure on the russian economy. host: back to the european union and the u.s. imposing these

sanctions, would we be more effective if the u.s. did it unilaterally? i we tied into europe? guest: we need multilateral sanctions, no doubt. in the history of sanctions suggests that when we moved laterally, it is not -- only move unilaterally it is not effective, cuba is an example. no substitute for u.s. leadership. there are 28 eu nations with their own mercantile interests. everybody is pursuing their own economic interests. when the u.s. congress exerts leadership and european countries are facing the prospect of u.s. sanctions and they continue to do business with designated individuals engaged in illicit finance, that provides the moment of clarity for those corporate executives. the u.s. treasury department

demonstrated this under the bush administration and the obama administration with escalated campaign against iran. under the bush administration, we have the opportunity to use sanctions to scare the north koreans and we did. we designated a bank in asia and it unleashed financial theories. the north koreans were terrified. unfortunately we surrender that leverage trying to get a diplomatic eel with north korea on the nuclear file. the genie is out of the bottle. host: from "the economist," what what america fight for? the narrative, carla anne robbins, we let syria crossed the red line and the echo chamber is that the u.s. is weak on these issues. guest: that is always the criticism, the u.s. and decline, that is a favorite political argument. i have always been fascinated, every time i go to london, every academic working on american

studies says this is the end of the american era. this is premature. i do think syria is a horror, it is not as if the europeans have stepped up on syria either. there is no substitute for leadership. iran, i cannot guarantee the iranians are going to cut a deal, but around is a pretty effective argument for both american leadership and for the efficacy of sanctions. i do not think rouhani would have won if there were not so much pressure on the iranian economy. there is concern and fear and does president is defining a new sort of american leadership that has a lot of people in europe -- a lot of whining in europe. if we are too strong, they hate it, if we are to we, they hate it. "the economist" is fabulous covers, very provocative. host: the defense of democracy? guest: we are a think tank that defends freedom. we have done a lot of work on

issues of illicit finance and sanctions and the utility of economic warfare. it is an organization committed to that instrument of statecraft. we are also well positioned to criticize it when it is being overused. david sanger described it as the favorite non-combatant command. the treasury department deserves credit for running a sanctions campaign against iran and north korea. the problem is not just what you do on the escalation curve, it is when you start to lift sanctions. iran is a great example of where economic leverage was built up, president rouhani was elected because of the economic pressure. we are in nuclear negotiations

and at the very time when we have maximum leverage to force, alley, and -- to force the supreme leader to make a choice, we blinked. now iran will retain the essential elements of a nuclear infrastructure. we have diminished pressure and i think we will end up with a bad nuclear deal and ultimately not solve the problem. guest: i could not disagree more. with all respect, when you talk about sanctions you have to think about what it is you want, what is the goal here? the goal with russia is not to overthrow putin, the goal is to get him to pull back in ukraine. the goal with iran is to get a deal that would make it harder to build a nuclear weapon. not to overthrow the iranian government. i don't think the iranian government was close to being overthrown and i don't think if you look at the iranian economy and the level of inflation and the level of unemployment, it is

a small lessening of sanctions, basically unfreezing like $8 billion. most companies are not going back in. they are interested in going back and but they are worried concisely because of the treasury department. we have these country sanctions that say if you do business with iranians you are going to suffer. we have cut the iranians off from the international financial community, that has had a huge impact on the iranian economy. if your goal is to overthrow the government, you should not let any sanctions. if your goal is to get a negotiated settlement, you have got to give them a little incentive to stay up table. guest: the goal is to reach a nuclear deal. to reach a nuclear deal, history has demonstrated you have to put their clerics at the choice between the survival of the regime and a nuclear weapon. ali khamenei will not change his strategic oculus with respect to nuclear weapons until he

believes his regime is threatened. it was a friend in 2009 when iranians were on the street y elling "death to the dictator." carla has seen imf studies showing iran is experiencing a modest recovery. in 2012 we deal escalated -- in 2012 we de-escalated sanctions. rouhani has more leverage and is less likely you going to get a deal that dismantles iran's nuclear program, that has been the goal. we are about to reach a bad deal that the first is because we have taken the leverage away. that is the fundamental issue with sanctions. you have got to build the leverage, know when to use it, and you cannot prematurely diminish your negotiating leverage. we did that with north korea they are about to test their fourth nuclear weapon. host: in addition to mark dubowitz, carla anne robbins, a veteran of the wall street journal and former editor for the new york times in addition to her work at the city

university of new york, she is a fellow at the council on foreign relations. thank you for being with us. we want to get to your calls and comments. jim from connecticut, good morning. caller: hello, how are you doing? a great comment about sanctions. i was wondering if you have ever thought of the rest of the world putting sanctions on our american political leaders. now that the lapdog media has not kept a lid on the fact that building seven was destroyed in a controlled explosion. host: we have addressed this issue in the past but we are going to move on. las vegas, nevada. caller: i am originally from palestine. they occupied my country, sanctions only go for those who

are gang bangers. the state of israel is a terrorist organization. russia, europe, a controlled american policy and the media. especially wall street. everything on zionist people. host: i will stop you, we could not disagree more with some of those points. guest: i am a lapdog because i am in the media and i am a zionist -- no one likes the press. host: we don't care what you say about us, just say the truth. richard in california. caller: thank you for c-span. my great-grandfather was a

russian major and the white army. that fought the red army. i am third generation. i have only two questions. number 1 to carla, what international law are you talking about? who can place sanctions on the u.s., which is now the global bully? i will take your answer off and thank you for your consideration. host: thank you, richard. guest: international law, you are not supposed to change borders through the use of force, basically. guest: i will take the second question, i don't consider the u.s. a bully, i think it is a force for good. you do have added an interesting point. as the u.s. uses sanctions as an instrument of statecraft, a raises the question of whether other countries like china will

use sanctions against western interests. the power of our sanctions is because of the power of the u.s. dollar. the u.s. dollar is the global reserve currency. it is giving us the ability to use targeted financial sanctions against bad actors. the u.s. dollar diminishes in its power and prevalence, it might be that we see countries like china and russia using colors of against us, we need to guard against that. -- using coercive sanctions against us, we need to guard against that. host: the sense of imports in eastern and european countries. we talked about germany, 30% of german energy is imported from russia. 91% of poland's energy, 73% in the czech republic, 34% in the netherlands, 98% in slovakia and 86% in hungary.

a contrast between some of the former soviet union satellite states and western europe but still significant. guest: it is an enormous amount of leverage. when the u.s. pressed for europe to stop trading in oil with iran, they could make the difference up by asking the saudi's to pump more. this is a big deal, reagan did not want to send those gas lines. the russians have a huge amount of leverage. the impact is not just on those countries and is potentially on the global economy. europe is beginning very slowly to recover. we saw with the euro crisis how interconnected the global economy is. this is something that has to be done very carefully. sanctions are not a scalpel, they are a blunt instrument. host: this is from "the london telegraph," the headline -- the

ukraine crisis and sanctions a blow to russia. this wrapped in the lives of the rich in russia has become the centerpiece to the west's response to putin's intervention in ukraine. the chances are that russia's troubled economy will be damaged. guest: i think that is right. i agree with secretary lew. the sanctions that are being put in place, it is very much is a calibrateda process of escalating sanctions. you create the expectations of more sanctions, that does the most damage. there is a chinese phrase, killed the chickens to scare the monkey's. guest: i've never heard that, i love it. guest: it explains how the u.s. treasury department ruled out -- rolls out sanctions. you pick individuals and institutions, sanction them, you send a message to the international community that you

are serious and you rely on the fact that most ceos, when faced with escalating sanctions, are going to make decisions in their self interests to cut ties. the power of our dollar and increasingly the power of our energy molecules, we are becoming an energy superpower, which is giving us leverage against russia and the long game against clerics and tehran. host: our guests on friday morning on the c-span "washington journal" to talk about sanctions. "foreign policy" magazine has a piece called smart sanctions, a short history. available at foreignpolicy.com. judy from idaho. caller: i will remain on the line. my remarks are for mr. dubowitz, you, sir. you said that we should not have taken the military option in the ukraine off the table.

and the first thing that jumped into my mind is if we threatened military support to ukraine, putin would have doubled over laughing. even if we ship them and i take weapons -- even if we ship them anti-tank weapons, they do not know how to use them, they cannot maintain them. there really is no military option. guest: the history of world war ii would suggest that the ukrainian partisans were pretty tough fighters who fought with a lot less. the reality is you are right, the ukrainian military has been severely degraded and is in terrible shape. the ukrainians are a tough people and a proud people. they have shown a willingness to

fight for independence and to preserve democracy. the suggestion here is not that the u.s. military have an intervention, it is providing more than ready to eat hamburgers, which is what we have provided. we have refused to provide night vision goggles and body armor, some of the basic things they need to defend themselves. it sends the wrong message to vladimir putin. he is doubling over laughing because he realizes our response to his annexation of crimea and his agenda to take over more of eastern europe and expand the sphere of the soviet influence is just to use economic pressure. it will not be a silver bullet, he needs to back it up with credible support of military force. host: this is a comment from the deputy minister of foreign relations

>> it is only the intensity of the processing ukraine. it is the sign of a reluctant test reckless behavior. no lessons are learned from the past. the u.s. does literally nothing to impress its cronies. the deterioration of the situation in ukraine, this needs to change. a response of moscow will follow and it will be painfully felt in washington dc. host: that is from russia's deputy minister for foreign relations. caller: that doesn't make a lot of sense. to go back to the military question here, kiev has launched an attack to take back in the east. pro-russian groups seem to have considerable military resources. the fact that you can take down two helicopters is a pretty big deal.

this may bring the debate back into this country about whether or not we should be doing more to arm the government and train them. what is motivated the obama administration and i understand their hesitation is the lasting you want to do is fund another civil war in the world. if putin is not going to back off, that debate will reengage. host: this is a list of the countries that the u.s. has sanctioned very of your reaction to that list. guest: this is our default instrument. sanctions have played an important role. there are some success stories. there are important success stories. despite the huge mistakes made in iraq, we were successful in stripping saddam hussein of his nuclear weapons capability

through the use of punishing sanctions. we should have continued them. we should have made them more targeted. they were hurting the iraq he people. an invasion was not needed. we could've used diplomacy and sanctions. we could have held his feet to the fire. host: also on tuesday, lawmakers heard from jack lew. [video clip] >> sanctions are not going to work. we will never have a enough teeth. we will never have the sanctions hearing you need sanctions and countries that can't bite back.

they work well in north korea. it is harder against a country as large as russia. nobody is calling for combat troops on the ground to engage, we are talking about providing weaponry. we need to change his calculus. give ukrainian people a chance to stabilize their country. host: his argument is that sanctions are not an effective tool. guest: it depends on the sanctions and what the goals are. his major point in that statement is it is harder to do with a large economy for which our allies are intertwined. this is a time of major frailty in the european economy. i think the goal here is not so much destroy the russian economy. the goal is to change putin's

mind. if you look at serbia and milosevic, he changed his mind in part because his cronies were getting whacked by sanctions. " so he changed his mind when nato knocked over the cigarette factory owned by his friend. very rich people and crony capitalism in russia, they might send people to go in and say it is not worth it to go any further. host: good morning. welcome to the program. caller: i think sanctions, we devote as much sanctions as we can. the international community is not going to stand up and help the president in the situation, we should stand down and let it work itself out.

i think sanctions will work. i think the president is doing a good job handling the situation considering russia. what do you do? do you start world war iii ? sanctions are good. we did use as many as possible. -- we need to use as many as possible. the international community to put sanctions in themselves. host: let's go back to january as the president used his state of the union address. he brought up sanctions generally and iran in particular. this is what he had to say. [video clip] >> these negotiations will be difficult.

they may not succeed. we are clear eyed about iran's support of terrorist organizations. we are clear about the mistrust between our nations. this is mistrust that can't be wished away. these negotiations don't the lot -- rely on trust. any long-term deal must be based on verifiable action that convinces us and the international community that iran is not building a nuclear bomb a. if john f. kennedy and reagan could negotiate with the soviet union, surely america can negotiate with less powerful adversaries today. [applause] the sanctions we put in place make this opportunity possible. let me be clear. if this congress sends me a new sanctions bill now that threatens to derail these talks,

i will veto it. [applause] for the sake of our national security, we must give diplomacy a chance to succeed. host: from january of this past year, the carrot and the stick as the president tries to thread the needle. guest: there is a lot of chest pounding going on on the hill. there is a lot of complaining from israel. the last thing i want to do is see these negotiations fail and have the united states blamed for it. if anybody is going to scuttle, it is going to be the iranians. some sort of posturing when there are already tough sanctions on iran, we get blamed

internationally. guest: i disagree. the sanctions that were put in place were put in place by the congress over the objections of the obama administration. congress does not posture. these are meaningful. that sanctions bill was a sanctions in waiting bill. if they walked away from negotiations and did not meet a deal, the sanctions were designed to enhance the presidents of negotiating leverage. it has been diminished. 12 months ago, the u.s. posture was stop.

stop, ship, shut all facilities. in 12 months, they have basically moved out from our original position. they continue to diminish our negotiating leverage. the deal that i embrace and i long to see, will not do that. it will defer the problem and be more likely we will be in a war and not less. guest: there are so many things in that statement that i disagree with. i don't know if there is going to did -- be a deal. arguing for failure or that the iranians will be deceitful, you will probably win at that one, given our history with the iranians, i do think it is worth

trying to get a deal. giving the hardliners an excuse to pull out of this when they seem to want to try and move this forward because of economic pressure on the i think it is worth trying. if the congress was to have a sanctions in waiting bill, they can talk about it and not voted. that is where we are at this point. we took away an excuse. i don't think you could ever get a deal unless they gave away everything. i know they are violators. they have the right to enrich uranium. i don't trust them. i think a deal with intrusive verification is the best you going to get. if there is a chance of getting it, i think it is worth trying. guest: the it -- administration does not agree. iran does not have a right to enrichment. they have engaged in decades of nuclear mendacity. includes adding -- including

president rouhani. having misled the international community in order to advance this nuclear program. there has to be a deal. my complaint with this is i think we are heading down the path of war. the deal is going to give iran a pathway to a nuclear weapon. when the international community has a crisis, iran is going to do with they have always done. they will cheat and deceive and use the essential components to breakout a weapon and you will wake up one day with a nuclear armed iran. we should always negotiate with our enemies. we should have serious, escalating sanctions. we should engage in coercive diplomacy.

not diminishing sanctions. there should always be the credible threat of military force. nobody believes this president will use military force. if you take away the economic option. all you have is diplomacy and talk. we are going to lose. host: this is a tweet from president rouhani. we are moving closer to breaking sanctions. we see this as a vaught -- violation of human rights. guest: what is he going to say? i am weak in wasting my time as a negotiator? he has domestic politics like we have it.

he has to say it is worse -- worth giving up something because it will get better. i don't know if they're willing to make a deal. all i know is that one of the reasons you are against military action, we can bomb the place and it will set them back two years. you want to get the best deal you can and verify it as much as you can. it is not perfect. this may not be settled once and for all. it is going to be an ongoing issue. it is better than war and better than a bomb. host: this program is carried live every day on c-span radio around the country. a round table looking at sanctions, are they effective?

our guests are mark dubowitz and carla anne robbins. caller: sanctions aren't going to work against russia. under the reagan administration was nuclear deterrence. they are building up their weapons while we are destroying our military and firing it -- generals the know how to conduct proper warfare. sanctions are fine. it never worked against iraq. we had to use military force against saddam hussein. we're going to be taken over and the soviet union will be back.

guest: i agree to an extent. in a time of declining defense budgets is sending the wrong message to iran and syria and russia. we need to have a comprehensive policy. sanctions sometimes do work. they don't work in isolation. we need to have a credible threat of military force. the pentagon says the dead set that program back five to 10 years. we don't want to use military force. it has to be the instrument of last resort. we have to have a credible threat of military force. then we use sanctions in a smart way. we ratchet up the pressure. we do not hope for the good intentions of our adversaries across the negotiating table. we leverage that coercion to get the best possible deal.

in the case of iraq, sanctions were working. we did not need to go to war. in north korea, we gave them their money back. we undercut our financial sanctions and the north koreans are about to test a fourth nuclear weapon. guest: i haven't heard the five to 10 setback. i have heard the two. we can talk about that later.

there is no question that reducing our military spending. we are reducing the growth. we still spend more than what the next 14 countries in the world spend the put together. we are not disarming. trust but verify is a bottom line for any negotiation. i don't think we are going to depend on the good intentions of the iranians. host: how are sanctions better than wars? aren't they a form of war or an act of war? guest: they are a form of coercion. innocent people get hurt by sanctions. i don't care where you are or who the target is. i am from south africa. sanctions that were imposed on south africa in the 1980's affected black south africans disproportionately to white south africans. black south africans who were really impacted by international sanctions. most leaders supported sanctions. it was the best way to bring

down this apartheid government. there is no doubt. there are consequences for sanctions. it is the least bad option when the other option may be force. host: nelson mandela said this a bank sanctions. -- about sanctions. it is only through disciplined mass action that our victory can be insured. we call the international community campaign to isolate the apartheid regime. to lift sanctions now would run the risk of a boarding the process toward the complete eradication of apartheid area guest: desmond tutu has said this. they believe in the pressure that existed economically and symbolically. a country that was repressive

but had leaders that were elected, the isolation and the shaming from the world had a huge impact on that. host: rick is joining us from nashville. did morning. -- good morning. caller: good morning. i get nervous every time i call in. i speak to hundreds of people every week. [laughter] good morning. i agree with both of you. there is no clear answer. i go back to the kennedy days. bay of pigs. the missiles in cuba. the united states all of a sudden had to take actions. we need to send 600 troops to the baltic states. israel will take care of iran. we need to impose sanctions.

simple and clear. any nation that does business with russia, we cease to be any kind of trade with you. that will break them. guest: i think giving companies that choice is tricky. i think that is the rationale of the u.s. sanctions program. that is tricky when dealing with our european allies. it is important to understand that the treasury department is not to deal with the diplomatic challenge whether it be ukraine, crimea, north korea, what have you. the idea is to protect the global economy. there is no such thing as a good iranian bank today. we have to remember that.

we have to ensure that we don't lift financial system desk thanks is because we got a diplomatic deal with iran. we are sanctioning bad russian banks. those banks are engaged in money laundering and terror financing. they represent a threat to the global financial system. we should not lift the sanctions because we have a diplomatic resolution. having said that, we need to use targeted financial sanctions to but other financial institutions on call. host: good morning. caller: there is a lot of talk about ratcheting. as i understand, when i ratchet a not horrible, the power of the

wrench is important. we're are talking about 40,000 troops. right on the border. wrench where we find you saying, don't hurt the people. don't hurt the kgb member. the head of the kgb. you start to see a disparity in the ratcheting and the force. host: let me conclude on that point. what vladimir putin controls economically. he has access to as much as $70 billion. based on the foreign policy, what impact will this

have on president putin and the russian economy? guest: if we would continue what we are doing now, very little. there is an expectation that they will significantly increase sanctions and cut off their international banking. that would have a massive impact on them. it also have a massive impact on the european economy. if he continues to do it that is probably what is going to have to happen. guest: that is exactly right. we are playing a long game with putin. an escalation campaign is exactly right on the sanctions. we need to continue to hit at his cronies. we to go after essential elements of the economy. critical financial and energy nodes. we need to use the u.s. dollar and natural gas.

>> see all of this online at c-span.org. we remind you that the house is coming in briefly for a pro fora session. we will cover that next. news that, we expect the conference to get underway at the white house. german chancellor angela merkel will be meeting with president obama. it was opposed to start 20 minutes ago. it has been delayed a bit. once the house comes in for the pro forma session, no legislative business expected. [captioning made possible by the national captioning institute, inc., in cooperation with the united states house of representatives. any use of the closed-captioned coverage of the house proceedings for political or commercial purposes is expressly prohibited by the u.s. house of representatives.] the speaker pro tempore: the house will be in order. the chair lays before the house a communication from the speaker. he clerk: the speaker's rooms, washington, d.c., may 2, 2014, i