65. By 2030 that number will have grown by 30 million. And by 2050, that number will have grown by 40 million. So as you can see, the percentage of the old old as you in the orange and yellow boxes in this chart grows very quickly. Again, if you think back to the chart in terms of the amount of per capita spending that increases as people age you see we are looking at a growing number of individuals who, in fact, will be the most expensive portion of the Medicare Program. At the same time we have fewer young people coming in and we have fewer people that are paying payroll taxes to essentially support the program. And, of course, among those who are the most costly and juliet touched on this issue, are those who are dual ebl jiblligible. But Rising Health care costs is also an issue for the beneficiary. As juliet pointed out, as a population theyre not all living in palm beach. They are relatively low income population. Health status and chronic conditions are also significant drivers of Health Care Costs and outofpocket spending which becomes an issue. And rises with the number of conditions that, in fact, you have. Youll recall some of the gaps in coverage that juliet mentioned, most significant is longterm care which is an issue we have successfully avoided dealing with for a number of years. But those are major contributors in terms of outofpocket costs that the elderly are facing as well as simply the program itself. Now of note, i would say, women are disproportionately represented in this group with the highest outofpocket costs. And they also tend to live longer. Women tend to be caregivers for their spouses for many years or for their parents. They tend to live longer they tend to have more conditions and tend to confront these outofpocket costs and often, in fact, you see they become substantial at ages 75 to 84 and 85 and beyond. And then as i noted and as juliette pointed out theyre a unique population within the medicare population that also concern us as we begin to think about the beneficiary challenges that we are confronting. The duals, as they are referred to, who are individuals who are both low income and eligible for both medicare and medicaid are disproportionately counted among the medicare and medicaid high spenders. And they are a unique challenge in terms of managing this population. They are poorer. They generally have more medical needs than other beneficiaries. They are more likely to be frail with multiple chronic conditions and have functional and cognitive impairments. Theyre approximately nine million of those individuals and of particular concern, not only to the federal government as you look at the spending for the Medicare Program and planning Going Forward, theyre also a huge issue for the states who are also financing and they are as this reflects also a very high cost population for the states. So as we look at beneficiary issues and we look at the Medicare ProgramGoing Forward, looking at this unique population, one of the provisions in the aca essentially begins to try and get the state Medicaid Programs and the federal Medicare Program to begin to coordinate with one another, which has not been the case in the past. So that people often fell through the cracks. Their services werent coordinated. The Payment Systems werent coordinated and, again, many of them require things that fallout side of the Traditional Health care package. Their require Transportation Services and often Nutrition Services and a variety of things that, as we manage this population and look at the beneficiary challenges Going Forward, this will be among the most unique population that the two programs have to contend with. And then finally, as part of the discussion with respect to providers, given the aging of the population, the increase in the number of beneficiaryiesbeneficiaries, increasing attention is now being paid to work force, which is something weve talked about in the past but have not made a great deal of progress on. Overall, access to physicians in other Health Care Professions is adequate, med pac tells us, but there are clear differences in their access to Specialty Care versus primary care with primary care being much more difficult to identify and align with in terms of beneficiaries. This is in part a function and a result of the bias in medicare payment historically towards Specialty Services and the financing models, the history of silos that we pay people to do things has essentially discouraged the development of primary care and the availability of primary care providers. Theres no question that our system of physicians and nurses is among the best in the world but, unfortunately, they are not fully aligned yet in the Education System in the changes in the Delivery System that raul mentioned. Its quality measure evidencebased care, Multidisciplinary Team work, a care coordination across essentially sites of care so that we begin to think about people in the context of the full continuum of care, not simply in silos. Hospitalbased and hospitalbased hospitalal alists or the nursing home patient that we begin to think about and pay for as has been suggested looking across those systems and the manpower work force population has to begin to think in those terms as well. Medicare is the singlelargest payer for medical education. In 2009 we spent somewhere approximately 10 billion a year on medical education. We pay for less with respect to nursing education. But these are levers that we begin to look at in terms of how we incentivize the choice of specialty, the movement into primary care and all these payment models, acos and others that think about teambased care which is something that our medical Training Programs and Nursing Training and other providers need to begin to think about Going Forward and begin to think about it in school not simply when they go into practice. So that we begin to get exposed. Certainly when i was in school we practiced and were trained in largely a silobased system rather than an interdisciplinary way. So thats one of the issues well be looking at. Again, its an important part of how we think about providers Going Forward. And then quickly Going Forward in the issues that have been raised, first there are the incremental kinds of changes. Weve spent a fair amount of time this morning or this afternoon talking about payment reform, aimed at reducing costs and incentivizing changes in practice and specialty mix. The house passed sgr bill is still pending in the senate. Again, its a clear movement in that direction and that is towards payment reform and movement away from fee for service and a link to quality. In the context of Delivery System reform, again, the activities that were outlined by raul in terms of push toward organized systems of care, the focus on quality on coordination, on teambased care are all steps in this direction and, again, this unique population of highcost, highrisk in the duals is going to be a particular focus of attention for people Going Forward. Eligibility. These are all, again, incremental kinds of changes based on the program and benefit restructuring. Again, the confusing structure of the Medicare Program that juliet outlined ad suggestions about combining a and b so they look much more like Traditional Health insurance. It also helps to begin to organize and make sense of the costsharing and potentially provide some limits on outofpocket or catastrophic costs incurred by people. The reform in medigap, you began to see that in the sgr bill thats to remove the first dollar Coverage Even for those under medicare so they become more sensitive about the providers they choose. The eligibility issue is one that continues to come up and will no doubt come up again. You know, 65 isnt what it was in 65. People are living longer, theyre staying in the work force longer, were largely healthier and so the question is, is that the right age . It was a big issue for years because of people that fell through the cracks would they have private insurance available to them that was affordable . That now has been less of an issue, the ability to purchase coverage through a network or through essentially an exchange rather than the individual market. But, again, this question of who ought to be eligible and at what point will no doubt come up. Then theres of course, the final note which is the this attempt to sort of rethink the entirety of the Medicare Program and move away from a guaranty benefit to essentially a guaranty contribution and that is whether we ought to get out of the business, essentially the program as we know it today and begin to essentially allow people to take the money we give them on a per capita basis and purchase coverage. And its really a step beyond Medicare Advantage as we know it today but mr. Ryan and others have talked about premium support. So all of these things are things i think will be shortterm priorities for us as well as long term. Terrific, thank you, sheila. Let me remind you, you now have a chance to enter into this conversation. There are microphones at the far corners of the room. There are green cards that you can write a question on. If you do go to the microphone, id ask you to keep the question brief and to identify yourself so that we can get to as many questions as we can and i should remind you this is a primer, there is no question that is too simple to ask because thats what were here for. Yes, go right ahead. Hi amy grace from the senate. Im just wondering what you think about the government part d noninterference clause. Im hearing a lot about that and whether you think the government will actually save costs if they were able to interfere with those negotiations. Thank you. And you might whoever wants to take a crack at it explain what it is were talking about. The part d noninterference clause basically references the fact that as part of the medicare modernization act of 2003 which created the part d drug benefit theres a provision that prohibits the government from interfering or doing any negotiating with pharmaceutical companies over Prescription Drug prices. There has been quite a fair amount of back and forth about this provision and the question about whether the government could get a better deal for Medicare Beneficiaries who are enrolled in part d plans than the plans themselves. I think the Congressional Budget Office has looked into this. I think med pac has look good this and i think the prevailing view is that the plans are doing a pretty decent job of negotiating rebates and theres some question about whether the government could do a better job than the plans are doing. For most Prescription Drugs. One of i think the sticking points about this issue though, is drugs that are unique, that have no alternative, no generic substitute, no therapeutic equivalent. Is there a way for the government to intervene or perhaps try to come up with some alternative way of arranging pricing for these drugs where there is no equivalent, where theres basically the Pharmaceutical Company able to kind of set whatever price it wants. And i think there are various discussions, perhaps not official discussions but there have been ideas proposed about ways to get a better deal for beneficiaries on drugs where there is no ability for the companies themselves to negotiate with the pharmaceutical companies. So i think thats the issue where there could be a potential for medicare to play an important role. Do you want to go ahead over there . Sure, im ken, i work with Northern Virginia family service, its a nonprofit. So i have a question for raul. Quality and Cost Reduction seems to be pretty easily achieved in the first couple years which i assume takes a lot of sloppiness in the system beforehand. Are the same initiatives being thought about for the aca and the open programs as opposed to just medicare . Thats a great point. A couple things. We learn a lot from in general the approach that the Innovation Center has taken is to set the table for providers and give them incentives to innovate in care delivery and within any of our programs, whether its pioneer acos or comprehensive primary Care Initiative or bundle payments providers are using lots of different strategies and what we see that different providers are able to find different pockets of savings in different parts of their systems. So i dont think that there is a single universal theme that we see in terms of how where there are savings to be had. I think your i interpret your question as a question about multipayer alignment. And i think thats absolutely critical success factor for payment and Delivery System reform and its a huge area of focus for us. So all or nearly all cmmi models attempt to engage other payers because if you think about it, from a business standpoint, if youre a provider, you cannot succeed with one foot in fee for service and one foot in an aco or an alternative payment model because the fundamental Operational Strategy is different. If youre trying to keep patients out of the hospital for one population and then on the other side youre trying to maximize your hospital utilization, you cant manage two different goals. So as i said weve tried a number of different strategies to engage other payers and so in some of our models like the comprehensive primary Care Initiative, we actually went around the country in seven different markets and actively convened about 30 payers to do the model with us. So cpci actually we engaged these 30 payers. In other models, weve relied on the participants to go out and get the other riskbased contracts themselves. I think the other huge effort that youre seeing that was Just Announced this past week is we are now convening nationally payers providers, and patient groups in a National Health care payer learning and Action Network, payment learning and Action Network where our hope is that we will learn from one another about what the different factors for success are in alternative payment models and that the uptake of these models will spread and other payers will either match or exceed the pretty Ambitious Goals that weve set for the Medicare Program. I have one other question as well. And i just wanted to add one cautionary note and that is the transparency of information. One of the things we hear about, even within a single system is the inability to essentially easily access information across that system. And one of the challenges, i think, is the extent this is certainly true when you talk about multiple payers. But even in the context of a single system whether its a kaiser system or any other integrated system, the ability to convene in one place all the information for both the Outpatient ServicesInpatient Services and track and share that information. I mean, the learning that occurs by the ability to sort of report back in whats occurring across the system. Thats one of the things People Struggle with is that ability because the systems dont essentially necessarily match up. My other question is regarding medicare eligibility because i encounter a lot of adults who have now brought their elderly parents into the country who are now new citizens and new residents but will never have the 40 quarters that they need. So what is the thought process for those elderly adults who are now living in our country but dont have the eligibility requirements for medicare . To be perfectly frank its not really been an area of attention. You correctly note that the 40 quarter issue is one thats fundamental to the Eligibility Program and the focus has been on those who would otherwise quality and the question about the time at which they enter into the system. But not, frankly, a lot of attention to people who essentially dont qualify. You could imagine the unique set of circumstances and trish will remind me if im incorrect, but there were a unique set of circumstances early on with religious groups, for example, who couldnt have 40 quarters. There was an accommodation for statebased employees. But we so its an issue thats not just unique to people coming into the country. The people whove chosen, for example, to work at home. Women whove chose on the work at home and didnt have 40 quarters of traditional work behind them and contributed into the system. So its an issue thats broader than just that narrow population but its not one thats been given a great deal of attention to the best of my knowledge. [ inaudible ] i dont know that its come up, to be perfectly frank, at least not in the recent discussions but its a good point. It would apply not only in the context of new citizens but also to people who dont traditionally transition into the system. I had a question about incar