How do we keep people engaged, how do we reduce the burden to require this episode. Right over the years, outed in the program, i graduated from pepperdine. It really is local and that is true for value in healthcare is working. And it is the same on the entire continuum of the country. And we are seeing Health System and the marketplace to be very specific, it is who you are, what your assets are, what your Service Lines are. What your pay landscape is, what is your socioeconomic environment . All of that plays into your strategy. It is real important that thinking about better outcomes, you understand the Business Impact of all those factors in developing your value strategy. 27 years ago when i had a math professor at pepperdine got me a job helping model alternative payment models, doing capitation for a model in the valley and was struck and completely hooked by how quickly when the incentives were changed, provided provide outcomes, it is similar to what we were doing at that time. In that role looking at alternative payment models in the past 20 years and finally the aca has passed, starting to see an understanding is that these things are needed. Lots of unexpected partnerships, hospitals and payers, going to dinner, the cats going to dinner, around the country, really interesting because true anger, people are pets and they are at town halls and people really want that coverage and people who feel the coverage is so expensive. One thing i always keep in mind is the number one cause of personal bankruptcy is a health event so we have a burden upon us to try to figure out clinical problems and that will take the community as well as our clinical settings. Up until now the value has been securely focused in terms of the programs we are seeing in federal and state governments. The key settings in hospitals doing something differently. We know now macro is the first time the federal government is saying we will take individual positions based on this as well so at a Pivotal Moment how we align, support physicians to be able to perform under these programs is really critical. Looking forward to introducing our two panelists theres a lot of change but one thing we all agree on is there is no turning out. The use of data, creating value left the station regardless of what happens how healthcare is financed ultimately, we know the power of driving value. Okay. And the ceo of the mayo clinic in arizona. And start with doctor deco, the chief executive officer at mayo clinic in arizona and Vice President for the mayo clinic since 2011. Has been with the mayo clinic 16 years as a consultant and professor of emergency medicine for the college of medicine. He served in leadership rules like chair of the men mayo clinic of emergency medicine, 20002008 with general responsibilities for the province of mayo clinic in rochester, please join me in welcoming doctor decker. [applause] the chief executive officer and senior medical citizens july 1994. Associated with the Organization Since 1979. He was on the executive staff prior to joining and currently serves as chairman of the American HospitalAssociation Board of trustees and chair of the American Association of medical colleges. [applause] okay. To kick off a few opening comments. Great to be here and i would like to thank our host, megan and our colleagues at pepperdine for having me join you, it is a pleasure. We started the day with a fascinating conversation on the nuances of healthcare but also an overview that i think challenged us to think about the expenditures of healthcare and quality care in the United States. One thing we hear a lot about how bad healthcare is in the United States, it doesnt quite tell the whole picture. I start with a little font exercise. You or a loved one diagnosed with an incredibly serious condition, a rare cancer and you need to get care soon. How many of you are going to book a flight to some other country, book a flight to a different country to get there medical care, anyone in the audience, usually there are one or two because there are much looser oversight of experiment of therapeutic trial, sometimes you go overseas for that. The United States actually enjoys the best Health Outcomes for complex conditions including things like Breast Cancer and Prostate Cancer in the world. And at times fragmented system. And local conversations, and and we dont and hands, and where is the voice of the patient and National Conversations how to reform healthcare, where is the voice of the patient. 1. 3 million unique patients in every country in this union, 140 other countries who fly to this country for their care every year and the things we hear from patients, and and integrated healthcare. They want healthcare that is affordable. Heres another thought exercise. Is it always necessary his excellence and good outcomes always more expensive . Anybody . It doesnt have to be. Many of you are Business People and you know the secret behind the solution to the problem where you want excellent quality and affordability is innovation. We need the ability of healthcare in the United States to innovate and that is something that centers what you are hearing from today. And solutions, the price of colonoscopies, those could be screening colonoscopies. The second leading cause of cancer deaths in the United States, and one that was great. Who wants a colonoscopy . But what if instead of haggling over the price of a colonoscopy, and Innovative Team came up with a totally different solution involving screening for microamounts of dna in your stool so you dont have to have a screening colonoscopy, that was developed over ten years at the mayo clinic published in Clinical Trials in the new england journal, approved by the fda, licensed to a company that is now offering a test no financial stake in that but the Important Message is a fraction of the price of a colonoscopy, increases access screening can result in better care at a lower price so i share that with you as an example of how powerful innovation and how critical it is that the centers of excellence not only continue but we figure out how to help them flourish so we can invest in our nations future with solutions that work. Thank you very much. [applause] extremely well said. I think pepperdine as well, it was nice to be invited back to something. This actually is the best Health Care Discussion of this type. At least it occurred in los angeles in this region so i appreciate being part of it. A minute on cedarssinai. I say that for two reasons. Im a believer in where you stand, it depends on where you sit but it does provide context for the rest of the discussion on value. It is a private notforprofit integrated Healthcare Organization that has a four part mission, patient care, inpatient, extensive outpatient side of things. Medical research not unlike the mayo clinic conducts medical education for graduate medical education, undergraduate physicians, nurses etc. And Extensive Community benefit and Community Service mission. Down to our last 2000 physicians associated with cedarssinai as well is relevant to the later discussion of half of those physicians i what i would call tightly integrated with cedarssinai. The other half are in private practice in the community in one way, shape or form. Two hospital, cedarssinai, delray, joint venture, among ourselves like medical Rehabilitation Institute recently opened in los angeles. Multiple ambulatory facilities in the area, we happen to be the largest hospital in the western United States but we try to emphasize it is not about being the biggest, but the best. It is a combination of what you might call a Community Hospital. In our case the Community Hospital to 2 Million People to 3 Million People in the los angeles area. The largest provider of tertiary services, the most advanced treatment in heart disease, cancer or transplantation, neuroscience, of any hospital in california. With the combination of the two of those things, in terms of our patient mix, about 40 of our patients are medicare patients which makes us the largest provider of Medicare Services in the state of california by almost a factor of two for any individual hospital and a third of them are dual eligibles. For those who dont know those terms the other individuals who are elderly and poor. Also one of the largest providers among private hospitals in the state, which gets to the cost of commercial insurance we will get to a little later. My point is what we do and who we serve has Significant Impact on both how the movement of care affects us and more importantly we hope we are contributing to that movement. Very quickly, definition of terms of a personal standpoint, valuebased care is all about providing the best outcome for the patient in a highquality safeway at an affordable price and most costeffective way that we as an institution given what we do and who we serve can provide. This is something we are firmly committed to as an organization. Frankly to start because we believe it is professional and ethical imperative of the organization but for all the reasons seek outlined in his opening remarks theres an economic imperative for the country in many ways. I would observe it reminded me california actually has been in this valuebased care game for some time. More so than the rest of the country in one way, shape or form, going back to the mid80s and moving on from there. The Affordable Care act certainly turbocharged the movement to valuebased care. Frankly in the way that only big movement by the federal government can when it comes to issues Like Health Care in america given the role the federal government plays in the this arena. The American Health care act being voted on or has been as we speak, frankly has elements to it that raise question about the momentum around that. Maybe we can touch on that later on. Finally, when i think about valuebased care i think of it in three ways, valuebased care at the patient level along the lines with what we have already described but there is the issue of valuebased care at the Organization Level and the issue of valuebased Health Care System as it relates to the system itself. Whether it is at the regional level, state level or nationally. Most of the work to date has been on the first piece of that with regard to the patient level and to get to what the was describing in solving the differential between america and other countries on the cost side the issue of valuebased care at the patient level is necessary but not sufficient to complete the journey without also examining the other two elements. I think the movement to valuebased care is fundamentally connected to having organized systems of care. Organizations and structures that have capital, management capability to bring to bear the kind of change involved in moving the country from where we are to the future. That conversation oftentimes breaks down into a debate about hospitalbased systems or physician driven system. I think that is a waste of time. Lets get on with figuring out multiple examples around the country of organizations, the mayo clinic is a great example, organizations that have their roots on the hospital side, organizations that have their roots on the payer side here in california kaiser being an example of that which started as an Insurance Company as many of you know. Last comment with regard to this question of valuebased care with regard to measuring quality but in particular efficiency. I think we are very early on in that journey and among the things that hopefully will be addressing in the years to come are the measurements of some of those. Thank you. Thank you both. [applause] what we would like to do today is dig a little further into the concept we just discussed with a series of questions to prompt the conversation, specifically there is some conversation about the definition of fee for value. We are moving towards it, specifically in your organization and you can start. Three highlevel components, what is the physician affiliation strategy. How do you create governance if you dont own anything, community partners, give some thoughts on how you are looking at that and we will move into population health. Mayo clinic, we are a notforprofit organization and our model is a little different, it is not the most common model. We are a physician Led Organization and our physicians are employed on a flat salary. We feel for our patients what that does is eliminates financial pressures on individual providers. If you are a patient, it is a gray area, you like the comfort of knowing there is no financial benefit to your Orthopedic Surgeon when deciding whether or not to replace the knee. The fee for Service System is the majority of how we reimburse healthcare in the us we get into valuebased payment in more detail. And make money, not fully recognized the sole solution, and we want to make sure we encourage excellent outcomes. Medical centers can affiliate, we have 45 Medical Centers to share knowledge of. And fees for these relationships allow us mergers and acquisitions you read about in healthcare these days, slowing down currently but the past 5 to 10 years out there have been a huge boon of merger activity and we feel again as a Mission Driven organization focused around patient excellence, sharing our knowledge and own and operate Medical Centers all over the country but there are multiple solutions. That has been our approach. We are different. My opening remarks, 2000 physicians, the 2000, 400 are fulltime faculty physicians who lead advanced tertiary and quaternary services that carry out the medical research and medical education efforts to the institution. We have another 6 endorsed or that are geographically distributed physician network, essentially covers a 15 mile radius around 8700, for those who know where cedar sinai is, a combination of primary care as well as specialist in the physician network. The work, what i observe about that, i agree with the observation that it is not about any one particular model that lends itself to success and im intrigued when colleagues say you employ your physicians, it is easier for you to make change. Im here to tell you that is not true. It is not absolutely true at all. The change process, whether the physician is employed or in private practice has all the same elements that zeke referred to in john carters book and other leadership books. They are more integrated for the institution, there are two differences, and because they are more active in the integrated work of the organization. The process of change related to shared vision and the kind of things the go along and follow from that, the physicians who are in a more integrated relationship move through that change process in some areas more quickly. In other areas not but in most areas they have that happens. The other element has to do with the ambulatory environment, the kind of characteristics you saw zeke described in his 12 prescriptions for American Healthcare in the future. In the case of integrated physicians, virtually all of those are underway as part of our transformation to valuebased care. In the case of private physicians these are independent businesspeople and they are making their own choices how and where they fit in the valuebased care equation. The part we can impact, and to their credit, and great professional credit, private physicians are very much aligned with us with regard to the valuebased Care Transitions with regard to their patients, and the outpatient setting, those elements where there are those opportunities that exist to move in that direction. Depending who you are, you organize in certain ways to drive value. One of the hardest things you both talked about, change management. Can you give us a little bit of insight when dealing with you talk about affiliated physicians as opposed to employees, a similar apps dynamic. How do you ensure the clinical value, the brand of your organizations is protected, preserved and moving towards what you want to communicate to the marketplace . Absolutely critical is this notion of alignment. Every Healthcare Organization has a culture of service. We focus on a single primary value where the needs of the patient come first. Everything we do, our trustees and board levels, we sometimes make those hundred Million Dollar decisions, everything is driven by what serves our patients best. That permeates the organization and when you have that, the financials and even our Academic Mission which is education and research are critical to us but they our research must, we spend 700 million on research including nih funding, it must be driving to answer unmet needs of the patient so every Research Scientist can answer that, what problem are they solving for patients . In education we have a medical school, we are working on