Think that we would be a lot more successful by now and for us they are doing it at the local level using the county stakeholders and we are very fortunate that we have the counties support to allow us to tap into these different resources but we have to replicate that acceptability in every county and in every city if it doesnt come topdown. Typically at the end of the four runs people leave more depressed than when they came. At times we have been accused of designing before in the floor in the program to make people more worried. I dont know about everybody else, but i at least am more optimistic and hopeful and i think that we should end this on an upbeat note so please join me in thanking our speakers and i look forward to seeing you again and i can promise you that it will be less optimistic. Plus a live picture from the Brookings Institution as we bring you a discussion this morning on the military Health Care System we hear from a number of Defense Department officials as well as budget experts who will talk about their ideas for improving military health care and also whether the Affordable Care act can be used as a model for reform. First up doctor Jonathan Woodson is the assistant secretary of defense for Health Affairs. Live coverage on cspan should start in a moment. We will let you know president obama will be holding a yearend News Conference before he would his family for their annual vacation in hawaii. The conference is set for 1 30. We plan to have coverage on cspan and we will get your reaction afterwards on the phone and social media. The president hosting a conference at 1 30 eastern we will have that live on cspan. In audible conversations [inaudible conversations] in audible conversations [inaudible conversations] good morning, everyone. Welcome to brookings. Merry christmas, happy holidays. Im from the center on 21st center on 21st century security intelligence. We are privileged to have an allstar cast on the important subject of military Health Care Reform. We are going to hear from assistant secretary defense secretary defense for Health Affairs doctor Jonathan Woodson. He is responsible for the 50 billiondollar plus enterprise that takes care of almost 10 Million People. Including the dod activeduty personnel and their families, retirees and took care of 50,000 on the battlefield. And it is that is a very large player in the national Health Care System. And after weve heard from doctor woodson, we are going to assemble a panel of distinguished scholars that range from not only the military domain but also the broad health care and economic domain in the country as well and i will have the privilege of moderating the panel and introduce the participants later on but for now i would like to give doctor woodson the floor. Hes one of the countrys best vascular surgeons and as a soldier in the military himself played in the nations wars hes now a businessman park salon with a combined annual expenditure in excess of 50 billion which is now more than 10 of the base budget of the and the defense of remarkable set of responsibilities that matter how you look at it. Without further ado, the floor is yours. Please join me in welcoming. Thank you for that kind introduction. Its a privilege and honor for me to be here with such a distinguished panel and old colleagues and friends. I want to thank the Brookings Institute and Michael Hamlin for inviting me to talk about what i deal with everyday and i think its important and timely not only to the National Scene and the Defense Strategy that healthcare in general. I typically speak to the audience in the medical centric so its great for me to get feedback from an audience that has a broader perspective on National Security so im going to try to set the table a little bit here about the military Health System to tee up the discussion that will follow and both are needed down the road. So there are a lot of responsibilities in the National Security defense in the military strategies and the military strategies and to properly assess its value we need to understand that these polls particularly in the emerging Global Health and gauge meant environment. Being able to meet its missions to deploy anywhere in the globe at a moments notice its important to state this is not a pickup game and you need an organized system for the strategy that its important to realize also the most important is to be the enable of the boer fighter as exemplified by this iconic figure on this photograph we need to keep this individual will be. We need to care for the families and make sure that they dont have to worry about the family when deployed as it appeared the phrase we need to learn to skate where the puck will be when we make reforms going forward. We have opportunities for the policymakers, beneficiaries into the country at large but only in the context of understanding the roles and capabilities. Its an evil system of healthcare and medical force generation. More historically from independent medical systems which were generated decades ago when medical care was much simpler in the way we thought about medical care was less involved, costly and technological. So the Healthcare System is in a transformative period after 13 plus years of war. We have performed well that we need to position ourselves to be stronger and more relevant to the future. Its an understanding of the uncertain complex that defined the National Security seen in healthcare in america and i think many of you have heard that term. Its not immune to the requirement of these other domains. So if you accept the principle that a state where the puck will be is to design the used to design the system to get the outcomes that we want when measured against the missions and functions that we are asked to perform. So this slide really is the military system part of the fighting force into the Principal Mission is to ensure the forces are medically ready to go to the fight and its also important to understand one of the missions is to generate the medical providers to the enablers. Its a microcosm of medicine we operate 54 plus hospitals well over 300 clinics and have 150 medical personnel. We have a plan masquerading as an insurance product and thats important to understand what the deuce defined by congress and not what the let the Corporate Structure defines as a benefit in that sort of profit motive system. We are a public Health System responsible for not only prevention of disease but broad responsibility of those that can normally be seen in the state and local is and remember historically the major reasons it is important and it goes back to the core of history and why they exist. We are in medical Education System producing over 26,000 medical graduates every year in a number of medical specialties, so radiology technicians, pharmacy technicians etc. And of course the combat medic which is important to saving lives in the battlefield. Weve 217 graduate medical Education Programs in which we produce advanced capabilities and advanced nursing programs which produce versus indicate fuzzy and one of the issues getting back to the connection if anyone thought we could outsource this and produce and generate a medical force that we need. There are a bunch of senior medical students that are starting around the country looking for residency programs that do advanced training. It turns out there probably will be a thousand fewer positions to train and and american medical graduates. To generate the medical force that we need may not be there. The doctors and nurses etc. That are going to be the key enablers for folks coming in harms way. Going into the programs in the country tied on a mission this is becoming important as the expectation of american leaders and the american public. Its too rapidly closed the gap in the sciences to approve the outcomes from traumatic brain injury and other problems which is posttraumatic stress disorder but the other issues are predominant answer we must maintain this capability. These are pieces of the system totaling more than 50 billion a year. We need to Work Together in order to be available to support the National Security defense and military strategies and unraveling a piece of this without considering its effect produces a vulnerability for this country. Just last year we thought we were going to get this brief period race pipe from connecticut cities and then isis etc. Breaks out into the frames all of the issues about the mellow three Health System in terms of its need to be ready. As with for the military Health System is an important indispensable part of National Security effort but whether or not it continues in the same form relates because they are higher than ever before. Our american leaders and public expect comprehensive coordinated care for servicemen and women who are ill and the closure of gaps where the knowledge doesnt exist. Weve seen its effect on the tip to the crisis and for those of you not familiar with this visit is a seminal event not only because we brought expertise to this issue but here but heretofore, the ngos, nongovernmental organizations with Doctors Without Borders report of the military and the military medicine at extraordinary long arms length because they didnt want to be tainted by what we do so they see this catastrophe unfolding and they were the first ones who called and said you need to get the American Military here to help out and they spoke about having battalions of individuals who have special capabilities deployed in the environment so there are expectations from all the dimensions of both the leadership and society around the world with what we can do. So the Global Economic crisis many countries including allies decreased their spending on military. So they have to decrease the military medical systems. So we interface around the world and one of the common refrains is how can we command partner with you training for preparedness and the the preparedness and the deployment on the humanitarian operations and kinetic operations. Its a military medical system others can plug and play. We cannot expect it to be ready. You need to be supporting all of these integrated operations and preparations missions. From a value perspective one of the core expectations is from the combat commanders, Service Members and family we will save lives on the battlefield and by that measure, we have been successfully achieved the rate and warfare, the lowest disease and the nonbattle injury rate in the history of warfare so that if an individual is injured and brought to the hospital they probably have a 98 chance of survival. The slide on the right indicates despite the index of how severely injured individuals are it indicates that the chance of survival has declined. This has occurred as a result of many issues. Its a result of the practice of clinically contact the transform them into the combat zone with an emphasis as i noted before research and Development System which invested in issues of Research Control and body armor and as is often study of what works and that is where they are taking care of patients. This has led also to other benefits in the logistical trail of survival and the social impacts of that we now married a soldier up with the family which has a real important set of positive consequences for the environment and human dynamics. All of this is supported by increased training and competency on the field. 19 and 21yearolds doing Amazing Things because the education that they received at the center joint operations in san antonio. We are taking these from the battlefield and transferring them to the Trauma Centers around of the united gates. Weve led to trauma care now in the military taking care of the events. When the boston bombing occurred the picture on the left you see a Wounded Warrior a quadruple amputee talking to the boston bombing victim and the transfer of not only medical knowledge that motivation has been found. Weve redefined the issue. Wounded warriors are now fully engaged in life in the competitive sports. Dieting, serving. Theres a new attitude that we will make the Service Member whole model me in mind, body and spirit but in a commitment to financial stability. We have separated ourselves philosophically particularly when we had the force that was conscript they expected to separate. Nowadays we have a professional volunteer force which when they become ill or injured, their expectation is we will maintain them as long as possible to demonstrate the ability to continue to serve. So the whole issue of the dynamics of what we have to be ready for in the rehabilitation has changed. Its not automatic that they will go to the Veterans Administration and receive that care. So this issue is we will have have detailed relevant to the medical system dot for example to walk on a prosthetic device that takes 20 to 60 more energy whether its a below or above the knee single amputee and if we dont commit to the helpful for decades we will see the quality and quantity of their life diminish so they occur more diabetes its a commitment to them for decades. You can see that this is a complicated system. This wouldve on the right is an advertisement for the American Association of surgeons. Its not a military advertisement but it suggests that we do have value for the American Medical System so hopefully ive highlighted some of the values and what it brings to the nation that we are in a period of transition. Operation freedom has closed. Operation iraqi freedom ended a few years ago but theres still kinetic activities going on. In the absence of war there may be a tendency to say what do we need this complex system for. So its important to understand what is occurring in the National Security environment to understand what reforms need to be made and how we can understand the value. All of you probably know that better uncertain things are popping up all over. As this issue of school for Health Engagement becomes the new instrument of national power, sometimes we are going to be at the tip of the spear and we will have the kinetic war. There are a whole bunch of changes as well. We have more specialization, more technology, rising costs although many have moderated in recent years beneficiaries expect more choice and that baby boomers are getting older and need more care. There is an absolute shortage and theres a provider base. Theres more issues with chronic disease, dvds, obesity and more care is shifted to Outpatient Care and life relies on inpatient care. This is to develop the quadruple came in the military system that looks at Better Health care, Better Health i should say that this prevention, better care that what he do when we we do when we have established diseases and lower costs, but most importantly, addressing the issue of readiness. How do we keep it medically fit and provided medical course of providers. If we can produce Better Health at a lower cost and the readiness that is necessary, that is our value statement and thats where we have to work towards. In the program percentage in the dod baseline budget the important point is if you had projected the slide a few years ago you would have seen a steep rise in the costs of there are somethings weve been doing to reduce the cost and the competitive value in the future. Previous agencies predicted that by 2017 would be we would be in a budget of 61 billion escalating up from there. We have taken certain Management Strategies such as pharmacy reforms, outpatient prospect of Payment Systems and admittedly healthcare inflation has moderated. We still track a little bit about what the National Average is and there are no beds that it will remain as low as its been over the last few years, but at the same time of course as we have try care in the defined benefits we have tricare for life and decreased tax. We dont have the ability to raise premiums or copayments unless the congress agrees. We have the system and as a result, the beneficiary contributions shrunk from 27 down to 9. 3 . The issue is collectively we have to decide where we want this to be. We want in for the Service Members deserve a robust benefit at a lower cost because of the service but this is a collective decision we all need to make where that should be. I put a slider. Dont worry too much about the numbers. They probably are a little out of date. This is designed mainly as a graphic to show you how the budget is divided. Its divided into the area groups. The issue is if you use the principle where the money is you will see that we spend a lot in privatesector care about 70 of the dollars into patient care and the direct care system. So its