Activity. Sure they to make release their information in a manner. We think the agency should be more transparent. Focus on what they are doing with spectrum and licensing. That is their core mission. Getting offt them in neutrality and trying to have governments of the internet. We dont want them in privacy. Those go to the f. T. C. It is time to narrow their focus. Telecommunication issues the members of congress that are session. Ng in this tonight on communicators on. Span2 i was offended at that time. What happened since then . Added 170 pages of Taxpayer Protection to that bill. Ofunderstand the gravity this situation. We worked with our colleagues on the other side to make this bill better bill. We made sure there is upsides to happens, so when this when profits come to these stockies, we get their warrants so the first people who get their profit is the american so they get their money back. We made sure there is an makesnce program that sure that wall streets shares in this recovery plan. That theade sure executives of the companies this rescue from recovery plan. We cut the initial cost in half congress will have to approve the second half next year. This . D we do all of because this wall street crisis a mainstreamcoming crisis. It is quickly becoming a banking crisis. What does that mean . Why does that matter to us . Does it matter to janesville, wisconsin . If it goes the way it could go, means credit shuts down. Businesses cant get money to to pay theirroll, employees. Students cant get Student Loans next semester. People cant get car loans. May not have access to their savings. Are we standing at the edge of this abyss . Nobody knows but maybe. Very probable. Principles. Fends my but im going to vote for this bill in order to preserve my principles, in order to preserve enterprise system. Herbert hoover moment. Theade big mistakes during depression and we lived with those Motor Vehicles for decades. Not make those mistakes. Is what getting the fear out of the market. Issue up to ahis crisis. O, to a all eyes of the worlds market is here on congress. A heavy load to bury. Bear. S a heavy load the we have to deal with this panic. We have to deal with this fear. The moment. Were in this bill doesnt have anything i want. Lot of good things in it. Were here. Were in this moment. If we fail to do the right us. G, heaven help if we fail to pass this, i fear yet to come. The problem we have here is month away from an election. Were worried about losing our jobs. All of us, most of us say this thing needs to pass but i want not me. Ote for it, unfortunately, a majority of us are going to have to vote for this. Were going to have to do that acause we have a chance of resting that crash. Work. This will so for me and my own conscious, the can look myself in mirror tonight, so i can go to sleep with a clear conscious. Didnt to know that i everything i could to stop it from getting worse, to stop this street problem from infecting main street. I want to get on my airplane and see my three kids and my wife that i have not seen in a week eye and saym in the i did what i thought was right future. R i believe with all my heart, as is, it could g worse and that is why i think we have to pass this bill. Find more highlights from 35 years of house coverage on our facebook page. Cspan created by americas companies 35 years ago and brought to you by your local provider. Atellite the American Enterprise institute hosted a discussion on the implementation of the health care law. Experts discuss the impact of the law and looking attests to change the Health Care System employers are reacting. To have the first Panel Discuss sort of the existing situation with the Affordable Care act, and for this panel to look at the future. Youve already heard a good bit of discussion about the future and so on, but this panel is designed to go into some specific areas of the Health Care System, states and the employment sector. Weve got some very wellqualified people to discuss this. Im not going to go over all of their credentials and so on. You have those in front of you. With one exception. I wanted to mention that alan weil has now been selected as new editor of Health Affairs which he will start in june, june the first we hope. Anyway, let me just say this briefly. This is theyre sort of a common statement, that nobody can predict the future. Well, i think what people really mean by that statement is that nobody can be assured that the prediction is actually going to occur, but ive always said, predicting the future is easy. People do it all the time. The tough part is for you and me to decide which of these many predictions we want to believe. Now, there are ways that people go about talking about the future, you know. Some people just casual remarks, but other people use lots of data, sophisticated actuarial economic models and so on. But in all of these cases i think its important for whoever is talking about whats going to happen, in this case, that they come with a sort of sense of history, that they are aware that lots of predictions in the past havent worked out as people thought. So the important thing i think for you in terms of thinking about whats can do happened in this sector is to sort of whats the probability of these unexpected things that might affect these predictions. So i know that sort of abstract but i wanted to say. We have decided to go in the order listed. So jeff, we will start with you. Thank you very much. There is. Good morning, everyone. Its great to be here. I dont get to washington very much, and im here on this panel as a representative of the groups that have benefited the most from Health Reform process so much, which is a Health Care Consulting community. [laughter] the people who build all the defective exchange, the people are advising, the person does consulting. The people are helping hospitals build acos, sort of in and out of my managed care. Those are consultants. This has been the golden age for our industry and we are delighted to be here to talk to you. If you spend your entire career in washington you think that medicare policy, you are sort of running the Health System, i think thats an illusion. Medicare represents maybe 22 of total Health Spending in the country at max, at full funding the Affordable Care act will be putting about 250 billion a year into the Health Care System that by the time we get to 2023 will probably be 5 trillion in scale, maybe 5 of the total thing. So from a standpoint of just the sheer scale of the enterprise i think people who work in washington to realize we are dealing with something that is the size of a nation. Our Health Care System is bigger than france, its bigger than russia. I am confident that we will defeat germany to 4 trillion. 16 Million People work in it. Seven out of the 10 smartest kids in the High School Graduating class work and our Health Care System somewhere. So when people in washington bravely talk about reforming the Health Care System, the degrees of difficulty or its magnitude, this is way harder than iraq. Is like invading a country the size of germany, and i think thats a little bit what is happening now. The main feature of this Health Economy for most of the last five years has been disinflation. Frankly, something no one, including the futurists predicted, in 2009 our Health System arrived at a rate of increase in Health Spending that we havent seen in this country since Dwight Eisenhower was president of the United States. Five years before medicare, and we stayed at that level of maybe 3. 8, 3. 9 increase in spending for five long years. The economists who believe this was a product of the recession will have trouble explaining why per capita medicare spending has trended down towards zero during the same period of time, 85 of the beneficiary population protected from costs by supplement insurance and medicaid or employer coverage, and why medicaid spending has trended down towards zero where people have essentially free care. So clearly something larger is going on than merely a macroeconomic response to slow down in our economy. I think the two big things that have brought this Aircraft Carrier enterprise to a slow glide, mark pauly over to one of them, which was this industry doesnt have a lot of new products to sell the public. If you look at the hospital of 2013, technologically its pretty much identical to the hospital of 1998. Device innovation, new technologies for ambulatory. There really arent a lot of new technologies in the hospital sector. And this recent reacceleration of cost i think a lot of people really point to the fact that, i me, only in health care is that somehow bad news. Okay, or something to really worry about, we have effectively cured hepatitis c, arguably our third most significant chronic disease risk after diabetes and alzheimers disease. But, you know, when you look at the deflection points in spending for the fairest sectors in the Health System, they go back in some cases as far as 15 years. Pharmaceutical spending went downward in 1990. Imaging spending, 200 billion business that was growing at 15 a year didnt downward and almost came to a halt starting in 2006. Hospital outpatient volume trended downwards started in 1995 and was only growing at about 1 a year by 2010 or 2011. Hospital inpatient utilization trended downward 11 years ago in 2003. As you follow the industry, i hear all this stuff about the reacceleration of cost and hospital cost. According to my friends at citigroup, hospitals lost about 4 of their admissions last year and theres some and investor owned firms that lost more than 11 of their admissions in a single year. And, finally, physician visits were bent downwards in 2005 and have since fallen about 12 according to imf health, maybe 3 growth and physician visits in the last six months. But i think the other factor that has contributed to the slow down in cost in addition to the fact that there just arent a lot of new products is the question of affordability. Think about this, add up these numbers. 48 million plus or minus to this last january uninsured, maybe 3040 million more people who, while there are number of injured, dont have any cash. So they dont really have that money to pay the copayments that are required on a high deductible plan. They tried to avoid using the Health Care System, and just mark alluded to, and when they do use it they dont pay their bills. Than 53 Million People on medicaid. You add up those three numbers, its half the country. Half the country cannot afford to use our Health System without Massive Public subsidies. Its not bullish short or long term for any industry if half the nations citizens cant afford to use its products. That issue of affordability really hasnt gone away at all. We are going to give people access to health care but for the significant number of people who get it through private exchanges, theyre facing a deductible of anywhere from 2500 5000. I heard paul at mckinsey talk yesterday, every penny of that 5000 is going to have to be paid before theres a single dollar of Insurance Coverage for the emergency room visit for that hospitalization. So very significant barriers to increasing demand, even with the advance advent of this new coverage. The hospital interest is the largest single piece over Health Care Systems infrastructure, roughly 900 billion industry. And the most interesting thing going on in this space, two things, theres a wave of merger and acquisition activity. The most fortunate beneficiaries of this new regime have been the Investment Bankers and dealmakers better after brokering a lot of mergers and creation of Large Health Care enterprises. The theory is that they will have market power that will enable them to extract the rent from the Health Insurers in the communities and get higher rates from health plans. And yet a wave of layoffs has hit our hospital industry, and the pattern is absolutely fascinating. Because as is the marketleading institution, that allegedly had achieved that a mass in the scale and, therefore, bargaining leverage with health plans they are laying people off. The list is impressive. Vanderbilt university in nashville, the cleveland clinic, the closest thing we have to a machine in health care delivery. Offered buyouts to 3000 of its workers and over 300 of its physicians staff. Indiana university in indianapolis, the two dominant players in Health System, thousand person layoff. Wake forest Baptist University hospital in North CarolinaJust Announced whats going to in the thing about 1000 person live but its a very long list. Portland, maine, the Washington Hospital center here in washington, sort of dominant actors. Evanston northwestern. Avastin northshore in chicago. All of these folks are laying off people. When you talk to their ceos, what they are seeing is an doubledigit revenue growth. Its like three, four, 5 revenue growth. Theyre spending is growing faster and so theyre trying to adjust to this uncertainty and thats what i think this lies principally brought to the Health System. This massive cloud of confusion and this threat that the world is going to change to respond to uncertainty by trying to reduce the momentum in their own spending and lay off workers. Someone alluded in the question period on the first day of the physician sector. I spent most of the last three years studying the physician business and sort o of the futue medical practice in this country. I dont think theres any question but that a hidden effect, not only of the law, but of the Regulatory Regime that preceded the law is to drive the independent medical practitioner out of business and into the hands of corporate owners. The Principle Movement in this space has been at the hospital employment which has grown by roughly 15 in the last decade. Its actually, the numbers youve seen in the generals are probably wrong. Maybe 120,000 of the 700,000 practicing physicians in the country, if you dont count the interns and residents have been all along are now hospital employees. And i think, and the economics of that employment is will be interesting. If you believe the medical group that reference most of those hospital sponsored groups, the average hospital employee doctor is losing the hospital. About 206,000 a year. That is the difference between what they collecting fees for the services and what they pay out in salary and what they spend to support their practice. Why are hospitals doing that . Well, its because they are able thereby to redirect all the diagnostic activity to laboratories, the radiology person, the hightech imaging like mri and ct scans as well as the ambulatory surgery, from much lower cost freestanding institutions to the hospital which may charge anywhere from three to five times as much as the organizations that are losing the patronage of those employed doctors. So if there is an underlying driving force ocean costs up in addition to chairing hepatitis c, i believe movement of doctors to salary employer is certainly one of them. And, of course, that is being supported by medicare policy that enables the hospital to charge a technical feat for positions visit in addition to the professional fee that that position wouldve gotten in office practice. So from a policy standpoint i think were making a mistake. We are sort of lighting a fire under our toes here by giving hospitals and incentive to employ docks and making the implication that Physician Services are worth more in the hospital setting than they are in private practice. As for the institutional analysts that follow our business, i really kind of conflicted about the impact of this law in the Health Care System. For example, my friend gary taylor at citigroup believes the trend for will be earnings for the publicly traded care system, hospital systems, the physician group, et cetera because of a large number of folks that are present we not going to be able to afford their care. And in the cases of some of these institutions, like tenet healthcare, for example, 30 million a year income gain as a result of the Affordable Care act, im not so sure. I think the combination of the deductible since, the fact that there is a very significant break for that, 12 to 15 Million People that will have exchange coverage, the fact theyre going to be facing anywhere from 2500 5000 or perhaps even more in front and cost before they get a dimes worth of benefit i think is going to dampen demand. The front end costs the cost of the care that a lot of us keep it fromd crashing in the first place, covered. Ot going to be the percentage of people with a 5,000 deductible that use it up in a year, is 3 4 of the population. Small number that spend enough to get to a point where are in the benefit itself. I guess im, you know, i guess im a little bit less bullish investmentf my analyst friends. I think right now, certain in the Affordable Care act flow negative because they gave updates and they took a huge hit from the sequester. I think it will probably be