In washington d. C. As part of the United States senate youth program, sunday night fa8 00 p. M. Pacific on e1cspans q a. On wednesday a panel looks at trends in Health Care Costs. Looking at the role of the Affordable Health care act in the slowdown of health care in the last few years. This was put together by the alliance for healthc reform and the kaiser foundation. Good afternoon. I am marilyn sarafeeney with the alliance of health reform. Along with senators carter and blunt, i would like to welcome you to todays briefing on the subject of Health Care Costs. I would also like to thankw3 our partner in this briefing, the Kaiser Family t foundation and we have with us today as my comoderator drew altman who is the founder of the kaiser foundation. Our Mission Today is to try to take some of the mystery out of Health Care Costs. Our experts are goingt to explain the trends, the prospects moving forward, what is driving Health Care Costs, and what policymakers and the Health Care Community are already doing to try and help keep costs down. So a couple of housekeeping e p r t hahp hc matters. First, we are covered live on cspan today. If you are watching on cspan, you are welcome to also follow us on twitter. We will be live tweeting with the hccosts. If you are watching on cspan, we invite you to submit questions via twitter again using that hccosts. I would also like to note that you have a blue evaluation form in your packet. Before the end of the briefing today, if you could kindly fill that out. If you are a congressional staffer, you also received on the way in a yellow survey. We would be extremely u grateful if you could fill that out and give it to one of our Staff Members on that will help us to know what your interests are andg us do a better job in puttingawq on these briefings. So id like to introduce our panelists today. First to my far right, we have gary claxton. He is Vice President of the Kaiser Family foundation, and thefa director of its healthcare marketplace project. Gary is going to explain the Health Care Trend and what we can expect moving forward. To my left is jay antos. He is the scholar in health care and retirement policy at the American Enterprise institute. Understand what factors are driving Health Care Costs. To my far left is jeff selburg. Else executive director of the Peterson Center on health care. Jeff is going to address the various programs and approaches that are already under way and the strategie to keeping Health Care Costs at a manageable level. And to my right, i have already introduced somewhat my comoderator, the founder of the Kaiser Family foundation. He is a member of the institute of medicine and was commissioner of the department of Human Services for new jersey. He was director of health and Human Services at pugh chartable trusts and also Vice President of theh2÷ robert j. Johnson foundation. And drew also served in the Carter Administration. Drew is going to start us offq by giving us some perspective on the issue of Health Care Costs. By coincidence, he has a column in todays wall street journal on the subject and you also received a copy of that on your way in. So im going to turn it over to drew. Some of you remember the Carter Administration right . Its great to see so many of you here, i just have to say a word about marilyn. I starteni working with marilyn when she was at the National Journal asking me hard questions a lot of the time, and then she worked with us at Kaiser Health news, and i got to ask herxd some hard questions sometimes, and now were working together at the alliance. Its great to be working with you again. And its amazing to see so many of youqedhere. Thank you for being so interested in this topic. I actually started studying the problem of Health Care Costs a long time ago when mi m. I. T. Sometime between the passage of medicare and medicaid and when you were all born, just looking at the audience. Its kind of tempting for me to say i feel[ a little like a football coach who has seen all the plays and formations and evgniq trick formations from my new England Patriots y80÷t one chart. And it documented what, since the beginning of time had been the basic dynamic for the problem of Health Care Costs thechlt moderate and then they bounce back with peaks and valleys which are driven by both changing Economic Conditions and changes in Health Policy and changes in the health care marketplace, and also just the thread of changes in Health Policy or impending changes in the marketplace. Now were coming off several years of unusual moderation in the rate of increasing Health Spending. Its really historic lets call it extreme moderation. Its really historic moderation in the rate of increase in Health Care Costs. Gary is going to show you the data, so im not going to do that. But just a couple of big picture points for you to keep in mind. One of them is that there is widespread agreement that the slowdown is due both to the sluggish economy and to changes in the Health Care System by which we mean changes both in Health Insurance and in the Health Delivery system with the economy being the biggest factor. But there is how should i put it i guess i would describe it as modest but not profound disagreement about the relative contribution of each of those factors, and im sure joe and the rest of us will be talking about that today. And since im sure youre going to ask, this far less agreement about the role of the afca about the role of the Affordable Care act, and frankly if it has laid any role at all, and we will all have views on that. The big question really is has the sad history these peaks and valleys you see here in the chart, been repealed . Have we somehow boldly gone on Health Care Costs where we have never, you know ever gone before . Is that even plausible to anybody . So were beginning to see now, just rheevery recently, an uptick in the rate of spending, which was predicted in most of our models, and the model of kaiser. And i think the question is not if spepdnding grows rapidly again but when and how much, and is it a lot or is it a little . Heres one thing to keep in mind, and that is that this is a business where small increments really do matter. So think about this rule of thumb. A 1 difference in the rate of increase so 1 up or down in the rate of increased Health Spending, thats 2 trillion over a 10year period. So a lot of what you do a lot of what we do in Health Policy when we work on the problem about of Health Care Costs, its, you know, not the effort to see if we can totally change the Health Care System or cut Health Spending in half its really more the effort to see if through 100 little ways or 50 little ways we can shave 1 or half a percent or a quarter percent off of what that rate of increase in Health Spending would otherwise be. Just one other big picture introductory point i wanted to give you. Keep in mind also that this is a multifacet multifaceted problem that you need to deal with in your jobs from several different angles. So you also focused a lot on medicare and medicaid because theyre such a big part of the federal budget and, and spending on those problems are affected by a whole bunch of factors which can be different from the factors which drive national Health Spending. And just lastly you also need to deal with Health Care Costs from the perspective, right of constituents and voters. So its worth pointing out that experts and people and, you know, in my experience experts are also people but maybe not always, view the issue very differently, and thats what that wall street journal column you have in your packets i wrote down is about. This may be obvious, but its worth saying. It would not be a great idea to tell the average constituent in the town, meaning that they should be grateful because they live in this wonderful period of great moderation in Health Care Costs because they might look at you like youre a little bit crazy, and thats because from their perspective, their premiums are going up, their deductibles, especially are going up at a time when their wages are flat. And so the last chart i just wanted to get into your heads is i dont think it could show is any more clearly. This was 2014 which was a record of Health Care Spending and premiums. Just 3 of americans told us they thought Health Care Costs were going up slower than usual. And i will end with this kind of my framing for the discussion. The national Health Spending problem, the health and the federal budget problem the health costs as a consumer issue problem, these are all related but different dimensions of the Overall Health cost problem which, in your jobs you all need to deal with. So as you listen to the briefing this morning, listen for not just one problem but at least those three problems. With that ill turn it over to gary. Im sorry okay, its working. Good afternoon everyone. I just have a couple minutes to try to talk to you about Health Care Costs, what they are and how theyve been changing over time. Ill try and do it kind of quickly so we have plenty of time for questions. This first slide show is information on perperson spending on health care over the last 50 years or so a little bit longer than that. This information comes from the National Health accounts, which is sort of the nations way of keeping track of how much we spend on health care. The total from what you can see from the slide the total expenditures on health care in the u. S. In 2013, which is the last year with final numbers was 2. 9 trillion, and this translates into about 9300 per person. It also the little numbers on the bottom show it represents a little over 17 of the Gross Domestic Product or sort of national income. Health care costs have risen steadily over time, from about 1100 per person in 1980 to almost 4900 in 2000, to the 9300 last year, or in 2013. Theyve also risen faster than other goods and services in the economy. Health care represented about 7 of gdp in 1970, 12 in 1990, and as i said, 17 in 2013. While things have slowed recently, as drew pointed out the rapid growth in Health Care Costs over the previous decades is what really raised policymakers concerns about the ability to afford and sustain our Health Care Spending over time. Obviously, why we care about Health Care Costs just to say the obvious is it costs money obviously, for people to consume health care and for governments to support health care programs. But also the more money we spend in health care the less money we have to spend on other things we care about, like education at the state level. This next chart shows how the u. S. Health care spending compares to that of other nations, and some of it didnt come out very well. But generally, the u. S. Spends about 2600 more per person than the next closest country which is switzerland, and about twice the amount per person as sort of the average of other nations which are which have large populations and large and high incomes. If i can just stop you for just one second gary, you have the full graphic, even though its not showing properly here you have it in your packets, and i wanted to also mention that if youre following this briefing at home on cspan, you can look at all of these presentations and other supporting materials at our website which is www. Allhealth. Org. Okay. Sorry. Gary . No problem. And when you look at the spending in terms of gdp as i said rgs the said, the u. S. Spends about 17 on our health care. These other countries spend about 9 to 12 so much, much less. A sort of other dimension of the problem or the issue of health care is that different programs, different payers different theres different ways to look at it and they all have their different political and economic dimensions. I have one example here which shows medicare spending per enroll enroll enrollee versus enrollee over a couple different decades. What you can see from it is although the growth has been very similar, until recently when medical growth has been much slower, medicare seems to be a bigger topic than medical Health Care Spending. One reason is where private Health Insurance, while it has a big effect directly on the budget, those costs are indirect on the tax system, so theyre not as visible. Another is that medicare has a demographic issue where the population is aging. There are many more people going onto the program, so even if medicare spending per enrollee goes up at the same rate as private spending or just the rest of us the cost of the program is going to grow because theres more people in the program. There are also some issues around the trust fund and payments for part a. I didnt want to so much point out the medicare issues here although they are important to what you all do but to point out that each program and each sort of perspective has its own important factors that you need to consider when you look at the Health Care Cost issue. Were not even mentioning today the effects of Health Care Costs on individuals and their outofpocket expenses and their ability to afford their outofpocket spentszexpenses. We could do a whole briefing on that. As drew mentioned, Health Care Spending has slowed dramatically recently. This slide shows that the average growth rate of Health Spending compared to the economy as a whole has been faster for the last the previous four decades and sometimes considerably faster a couple Percentage Points. Until recently when really, Health Care Spending is actually going up slower in the last couple years than the economy this recent slowdown in Health Care Spending which began, as i think drew said, in the mid2000s but has really accelerated recently into record low spending has raised the question as to whats going on. Some people, including a paper that we wrote at kaiser with some others, attribute much of the slowdown to the economic downturn that we experienced recently and the slow recovery. That paper shows that the lag growth of gdt is correspondp is correlated with spending. Others acknowledge that the economic slowdown had an effect but they would say the structural changes in the Health System primarily higher cost sharing in insurance policies, but also things like better data systems and payment reforms, played a larger role in slowing the Health Care Spending. So why does this matter . As drew said because the answer to the debate about why spending has slowed down suggests something about what Health Care Costs will be in the future. If the slowdown was primarily caused by the economy, the slow economy, then Health Care Spending should begin to grow again as the economy recovers and we may see something that looks more like the traditional pattern of Health Care Spending greatly going up much faster. If the Structural Reforms dominate, we may see a longer period of slow growth. This chart shows the both historic but then the projected spending from the actuaries at the centers for medicare and medicaid studies. Their take on Going Forward is that Health Care Costs will rebound as the economy rebounds but will not go up at the levels that they have gone up in the past. In general, theyre predicting Health Care Costs in the next 10 years to go up at the rate of growth in the economy plus about 1. 1plus Percentage Points, which is slower than it has gone up historically. As drew pointed out the amount there matters a great deal if. If theyr