The Health Care Decision (full session)

i’m david Leonhardt I’m currently the Washington bureau chief of the New York Times I’m formerly an economics writer for The Times and I spent a lot of the last few years writing about the whole battle over the health care law before that I spent a lot of time writing about health care before there was a law and i’m your moderator this afternoon you really have three wonderful folks to talk about this law and we’re just going to talk very briefly less than five minutes each I promise and then we’ll have a short discussion among us and then we’ll open it up to you all to hear questions and comments from you all and I probably don’t really need to introduce the topic it’s it has been the topic that everyone has been focusing on not only this week but but much before it which is the health care law the state of health care and and I think you’ll hear from us we’re all really going to emphasize where do things go from here I’m in fact the only one in my brief opening remarks who’s going to really focus on the past which is I’m going to try to give you the shortest summary of the ACA or Obamacare that has ever been delivered and when that works well shows a campaign yeah so I’d say it has four major parts the first major part is it vastly expands its insurance coverage and it does it through two major ways about half of the expansion and insurance coverage is the stuff that’s gotten all the attention it’s the mandate the law says all Americans who can afford it must have health insurance and to help them get it it sets up these marketplaces where you can more easily compare and see health insurance and then it subsidizes any one of moderate income in the medium term that should cover about 17 million more Americans or about one out of every three people who would otherwise not have insurance the second big part of it is Medicaid they take Medicaid which is now a big complicated mess depends on where your income what your family situation is and it sets us standard on it as long as you are I think one hundred and thirty-three percent of poverty level or below you qualify for Medicaid big expansion of Medicaid that is the setup the second half of coverage expansion that covers another one and three people who don’t have insurance that still leaves one in three people who won’t have it a kind of mix of not one in three overall but in that pie a mix of illegal immigrants and people who do not want to have insurance that’s part one of the law expanding insurance coverage part two of the law is paying for that through taxes a combination of taxes on high-income people raising their Medicare taxes and also taxing companies that’s part 2 it along part 3 of the law is over the long term trying to bring down the spending on health care and I think you’ll hear Zeke Emanuel talk a lot about this and I’ll introduce each one of the three of them when once once I’m done and so the idea with that is that it it wants to people want to bend the curve as Peter Orszag and Zeke and lots of other people often say which is to say they want to reduce the growth rate of healthcare going forward and the law tries to do that through a variety of ways trying to change incentives in health care sometimes trying to just cut spending of overall health care that is part wait a minute I’ve got my numbers mixed up right that’s part three of the law and what’s part for the law well all the quality stuff reduced hospital readmission rates reduce improve the quality of health care regardless of whether its financial or not so try to so try to have a health care system that not only doesn’t grow at the same speed but also provides better results because right now we spend more than any country in the world by far and we do not have better results than any country in the world by far it’s a mixed bag we’re better at some things like some forms of cancer care were worse than others so that’s the law for parts cover more people pay for it try to reduce the deficit over the long term and try to improve the quality of healthcare the Supreme Court effectively uphold LPL every single part of that law with one significant exception the Medicaid expansion they made that optional for States so if you remember I said about half of the expansion in coverage comes from Medicaid so if every state opted out of that expansion which is an option the Supreme Court just gave them the law would only cover half as many people as it otherwise would have no one expects every state top at it opt out of it the blue states will not opt out of it it remains unclear whether the red states will you’ll hear all of them talking about that today but basically what the court said is that somewhere between fifty percent and a hundred percent of the healthcare coverage expansion that goes on may continue and parts two three and four of the law may all continue so that’s the Affordable Care Act you can see why people would not put it on a bumper sticker yeah but there it is and the question is where do we go from here both legally and otherwise and to talk about that we have nirit a man who is the chief executive of the Center for American Progress one of the most important research groups in Washington it leans left or liens progressive as Nero might prefer I say we go with progressive nera is previously the chief policy adviser to hillary clinton during her campaign after that she was the chief domestic Apollo policy advisor to Obama in the general election and she was then a top adviser to Sebelius in the making of the health care law Tyler

Cowen is a professor of economics at george mason university is the author of the extremely well-read marginal revolution blog co-author of it he also is maybe the single best source for good food in Washington he writes a blog if you are ever looking for a restaurant in Washington just Google Tyler Cowen restaurants and he’s the author of a new book an economist gets lunch and Zeke Emanuel is the former head of bioethics at NIH is a former advisor to Peter Orszag into the president at the Budget Office specifically on health care and is now a vice provost at the University of Pennsylvania we’re going to start with Mira I’ve done the past you guys get to do the future right say I think I’ll talk a little bit about the decision and what it means essentially just to summarize for those who have not read about it recently the decision says essentially that the mandate the the issue that got the most attention in the deliberations is constitutional Chief Justice Roberts found that it was unconstitutional amy was not constitutional via the Commerce Clause which I think it is fair to say had the most amount of energy around it there are two arguments around the Commerce Clause we’re good it’s just a it’s a necessary and proper there’s an improper argument and just a straight Commerce Clause but under both findings we could talk more about them under both findings he found that it was unconstitutional was not did not pass constitutional muster however he found that it US Constitution under the taxing power of the federal government which is interesting in that no lower court found it constitutional under the under the taxing power now part of that is because courts that found in favor of the law found in favor under the Commerce Clause and therefore didn’t reach the taxing bird there was only one judge judge win and the Fourth Circuit who actually said it was both constitutional a Commerce Clause and adjudicated but that was not the majority opinion so it was it was quite a day on Thursday to find that that was the indeed the rationale was argued by the Solicitor General was in the Solicitor General’s briefs but it was not a persuasive argument in the lower courts so it was that is the argument that it was found unconstitutional now on the Medicaid issue as David said the Medicaid expansion was found constitutional but the authority by which it can be the power of the federal government under Medicaid was limited so what that was really what the court said really was that the federal government cannot use the entire Medicaid program as the leverage point a bound state so as we all know Medicaid is existed for 40 years it provides a subsidy of between 50 to 80 3% to States to provide coverage for this amalgamation of people in some states that’s relative you know it’s an it’s no I wouldn’t describe it as generous but it is more generous in other states some is only the exceedingly poor others are bringing in more working for people but that that essentially said to the federal government that you can’t use the existing Medicaid subsidies to cover it so right now states have a Medicaid expansion before them which they can choose to expand or not for the first several years of implementation it is a hundred percent match so let me just say that again for every dollar the state expends it receives a hundred dollars a hundred percent of federal for it it expends no money in the first few years it declines to ninety percent now what I find interesting about that and I will just discuss it for one moment because I would like everyone else to speak is that what is interesting about the constitute the courts how it is approached Medicaid it is as it is seemingly more concerned about a regime that provides a ninety percent 102 a ninety percent match then it has ever expressed a bit about a regime that was fifty to eighty three percent match which I find an interesting and odd outcome of the litigation and one of the reasons I believe that judges are sometimes it’s hard to adjudicate policy issues in the courts Tyler I’ll try predictions let’s say Obama wins I think the key to the future is to keep one’s eye on the Medicaid issue I don’t think the Supreme Court ruling on Medicaid is itself important I think the governor is once they stop making noise will leap on board but the public itself doesn’t know how much of the bills coverage comes from the Medicaid expansion so you hear mandate mandate mandate that Medicaid is quite an unpopular program and the state

governors have financial incentives over time to want to push people onto the subsidized exchanges so I think we’ll see a huge tug-of-war between governor’s at the state level including Democrats on my dad who would rather spend money on wealthier and more influential voters and the federal level where there’s an incentive to keep people on Medicaid and away from the subsidized exchanges and to great number and who wins that tug of war is to me the key question i’m not sure i think what is probably the best available outcome is for overtime if ACA moves to something like a means-tested voucher system where most people are buying on the exchanges tzikas are it written on this i would favor that but the problem is the way the exchanges are set up now that would be too expensive there’s even a part in the bill that says in year two thousand 18 if so much is being spent on subsidies through the exchanges it has to be cut so i’d like to see it evolve into something where you have catastrophic coverage on the exchanges and a mandate which is really extremely modest relative to a lot of current expectations and then for cheaper expenditures have something more like a market competition system and I wouldn’t quite say that to prediction but that’s one path through which the law could evolve into something quite different now say Romney and the Republicans win and also take the Senate that’s a harder set of predictions but my gut feeling is they don’t actually want to have to replace that’s a huge embarrassment for them they wouldn’t know what to do there are tax credit plans maybe in the abstract they make sense but you spend more money to achieve kind of the same result and the fact that you avoid the M word sounds great in a campaign mandate N word but doesn’t do them that much good in terms of doling out benefits to people who actually vote and support them so my guess is they’ll pick on a bunch of parts get rid of them and declare victory and the Keith the key problem for them is they can’t just leave the mandate in place there’s been so much talk about the M word and I don’t know how they’ll get rid of the mandate in words without getting rid of it in practice I’m personally not creative enough to figure out how this will be managed but my prediction is they are more creative than I am and if Republicans when everything will end up with more parts of the law than you might think hearing the rhetoric today anyway I think my times up thank you so let me say a word to pick up where Tyler said if you look at the Medicare situation going forward it really is perfectly economically rational for every state to adopt the Medicaid program because as nera said they get a hundred percent in the first three years and it declines to ninety percent be of the cost being borne by the federal government so a state has very little money going out not only does it have a little money for getting more people on Medicaid it actually is going to save money because first every state now has what’s called the cost shift it buys insurance for state workers and buried in that insurance it’s actually payment for uninsured people and so that will go down in addition every state has some program for paying for the uncompensated care that people who are uninsured have that will go down when people have insured so from an economic rationality standpoint and actually the console Economic Advisers analyze this in September 09 it makes perfect sense for every state to go in and adapt the Medicaid the only reason I can think of that they wouldn’t is ideological we don’t want to do it we don’t want to expand you know you might think that texas or Florida will decide that this is you know more federal program even if it would make sense for the state from an economic standpoint and we’ve seen a lot of that sort of behavior where it’s not in their interest but they do it anyway all those states would which one state control of the exchange and yet haven’t invested in nickel in getting the exchange on up and running are not going to have and it’s not going to run their own exchange come next year when they have to go live let me talk about David said you know I’d say a word about cost control cost control is extremely important whether you’re liberal or conservative for the following reason if we can get health care costs to go moderate when they have moderated by the way over the last few years um then the cost of the subsidies go down the cost of Medicaid goes down the cost of Medicare not goes down but stays lower as a portion of the budget and for private employers obviously they also have moderated health care costs it is a huge advantage to every sector of the economy if we can actually moderate the health care costs now one of my spent a lot of time working with Peter Orszag who’s somewhere over here on the on the bill and trying to get a lot of this cost control in the bill and I’d say that we got a lot of things but one of my big frustrations is we did not get enough deadlines on cost control so there’s deadlines on the mandate you know the exchange is open 2014 there’s deadlines expanding Medicaid there’s

lots of other deadlines but on the cost control we didn’t get as many deadlines as we should and that is very important because big health systems need to understand when things are going to change to schedule their investment and to see that it’s real I think what you’re going to see going forward is a real focus on this cost control because of its effect on the budget and its effect on private employers and if you’re very interested from a standpoint of getting people in short it’s also in your interest because the more the costs go up the more precarious this whole arrangement is and so I think again whatever your striped liberal or conservative Democrat a Republican going forward that really has to be a top priority for you because it’s the only way the system is going to be able to keep stable near you want to join me can I just make a two following points to Zeke first on the Medicaid point there is a sort of political economical economy problem on Medicaid which is Zeke is absolutely right that states save a lot of money from the Medicaid expansion because they’re essentially they pay a lot of costs right now for uncompensated care and they and they’ll get a lot they’ll build that will all be paid for ninety percent paid for the problem for some states is that the challenge is that that occurs often at the at the municipal level at the city level so Florida is a perfect example Florida at the local level has a number of programs Dave miami-dade county pays a hundred and seventy million or something like that for uncompensated care through a tax it pays at the local level so Florida overall will save but it’s not clear entirely clear how much that Governor Scott will save so i would say as a good leader of a state you should care about both the state level class and your municipal costs but it’s not entirely clear that every governor will think that way and i think that will be a friction hopefully some I know there’s some mayor’s in this audience that you know mayor’s will recognize that they are also bearing the brunt of these costs and they get a big windfall and hate to use the term windfall but a big windfall from the Medicaid expansion on the issue of costs I am agree with I agree with Pete agree with Zeke on the overall issue of how this is a drain on our economy and we need to get going on costs the challenge that we saw through the polarization of the debate and and no Tyler wasn’t one of these people but they’re there were a number of people I mean the truth is that for decades it was Republicans were leading on cost control issues and there were a number of Republican senators who had been strong advocates of cost control issues comparative effectiveness research was an area in which your Republican senators who had been farther shown greater leadership on that issue the challenge with the debate is that became so polarized that those same senators made cost control basically they called it rationing and hyper polarized the debate and my hope actually is that now that we’ve gone through the Supreme Court and we’ve seen you know we’ve had a final affirmation around this that hopefully we’ll see some of those Republican leaders come back to the fold and demonstrate that leadership I will say they were they were many of them were better than Democrats on this issue but that’s really one of the reasons why we didn’t get stronger cost control in the legislation and I believe there is strong cast member on the legislation but maybe we didn’t get stronger control is those only Democrats there was an arguing within ourselves did not provide enough leverage points because it would have been really helpful to have Republicans pushing but they walked away from the whole bill and we’re really attacking things like compare effectiveness research as rationing in a way that made it difficult to make those decisions not easier let’s Bend just a minute on the politics because you you all I think we’re sort of predicting that you use the phrase final affirmation tyler’s you said that the Republicans if they find themselves in office aren’t going to repeal everything they’re going to they say now I guess I want to I want to get you to go into a little bit more detail on that because that’s not clear to me write the history seems to show that what people campaign on they do right and Mitt Romney’s campaigning on repealing Obamacare he appeared before a sign that said repeal Obamacare the day of the Supreme Court ruling the house Yellen replace I think it’s it okay the house is again going to repeal Obamacare sometime soon right they’re going to vote again so I guess I don’t let’s imagine a world with a Romney presidency Republican House and a slight Republican majority in the Senate which I think if you’re imagining a world with a bomb with the Romney presidency is probably most likely it’s certainly entirely plausible how in that world is world in which they don’t deliver on the promises that they made right in which in which the Republicans come out and they and they repeal through

reconciliation they need only 51 votes through the budget they get rid of the Medicaid expansion it get rid of the subsidies and then you’re left with the sort of little insurance market reforms like about 24 year olds being able to stay on their parent’s insurance how does first of all it it’s always a lot easier to take a symbolic vote that has no significance and you know we’ll die like the house taking this vote on repealing I think that they’re not going to be able to do I think Tyler is right they’re going to do something they’re going to call it repeal but it’s not going to be full repeal because first there is this budget problem that is the health bill actually saves money over the decade and they’re gonna they would have to find money to fill that hole and they can’t find that money second it puts them in the pickle of the replaced part of it because a lot of the bill is popular like the insurance reforms and the keeping kids on until 26 and many other things and you’re going to have to then have a full set of policies and the Republicans don’t have a policy we learn all through the debate that they had lots of things that they would argue about but it was never a policy it was never a whole thing that addressed the problems of excess cost and quality the last point I would make is Romney is gonna need cost control just like everyone else for budgetary reasons and I don’t think he can throw out the whole bill and because of that he’s going to have to have a mechanism to keep health care costs down because he’s going to have to get the budget into some more reasonable balance and health care as you know because you’ve written many many articles on it is the long-term threat to the federal budget and it’s even a medium-term threat to the federal budget so I just don’t see I mean I think Tyler’s right they’ll do something it’ll be relatively modest they’ll call it repeal but most of the bill is going to proceed this is what I think they’ll do they’ll take a big axe to the Medicaid sections of the bill because people who receive Medicaid or not in general supporters of Republicans and here’s another way to think about Romney’s problem he wants to get reelected you can either govern the internet haven’t been elected once he gets elected if he does we’re living in the theory if Romney simply governed through what some people would call the extreme right he won’t be reelected it’s not that popular of stamps so one possible strategy for Romney is in the euphoria of having defeated Obama if this happens to immediately do something too deeply alienate the hard-right establish popularity with centrist voters and then slowly over time as reelection approaches move back towards the right as campaign contributions matter again and if you think your romney how are you actually going to do this are you simply going to take every decision the way the most Republican members of the House would want you to I don’t think he’s going to do that there’s nothing in his past record which suggests that and there needs to be some break you might as well do a break where you and your own terms get something for it oh so that’s my prediction so you know the one thing I would say about this is that i think we should take a lesson from the recent past which is every republican campaign on repeal and replace it was the number one issue that they argued in 2010 you know but the truth is that the Republican House Republicans had two anvils with the mushy with the Obama administration you know they had the government shutdown and they had the debt limit negotiation both cases they could have used their I mean they had a number of issues it wasn’t just one two sugars another but if it was the number one motivating issue for them they could have used the government shutdown as an envelope I’ll replace or repeal and the truth is that what was the last issue being debated it was actually planned parenthood so it was not actually Obamacare at the end now in the delam a deal there was an issue about the mandate etc percolating unless but it was actually not repeal that was I mean they made a decision it’s always a decision they made a decision between as between revenues and Obamacare and that was probably rational decision for them but they did choose another issue over Obamacare and i think and i would say just shoe for Romney is that he is the architect of Obamacare so it is a complicated I love it Sultan with the world it’s a it’s a complicated world we live in when he would be the person to undo it and what he honestly feels about that about Obamacare I mean III mean I’m not trying to be negative i just don’t really know because a lot of people in massachusetts I mean Zeke and I both stayed Massachusetts he was very proud of it I mean I’m people around him argued that he knew this issue inside it out in fact I would say the best defender of the individual mandate in public life in the last five years has been Mitt Romney I mean he’s argued it

more effectively than any Democrat so so a wet how that actually plays that I can’t really determine he even did it in one of the one of the Republican debates recently it wasn’t like seven years ago or five years ago or three it was like the last two years Zeke’s a fan of bets so I’m in after this panel I’m gonna design a bet on the idea of if Romney wins what happens to the bill and Tyler’s gonna pick the restaurant the only legs bent but he organizes so he can win it really let’s talk for me about the health care system right so we had a story on the front page New York Times a couple months back looking at the fact that health care cost growth has has already slowed right and the article said this is not mainly because of the bill the bill appears to play some modest role as people are trying to organize the health care system to get ready for the bill it’s mainly because of the recession people go without health care in the recession the same way they go without fancy dinners and the same way to go without lots of things but a fair number of experts also think the health care system itself is beginning to change is beginning to reform of itself again not mainly because of the bill yet although the bill appears to be playing a positive role there and there’s some debate among health care experts of this more optimistic ones think yes we’re already starting to see to use the term of art the curve bend we’re already starting to see a reduction in the growth of health care costs because people are making different decisions and more pessimistic ones say no it’s all the recession and when the economy comes back to kerbal unbend right right back I know near that you are a slightly more pessimistic about it right because we talked about it I I’m just I’m just I wouldn’t be wildly optimistic about what has happened so far yes I’m more optimistic about what will happen in the future on this issue and so far you don’t think people are changing their behavior doctors patients hospital no I think people are training their behavior I just don’t think that we’ve been able to I don’t I think most of it is attributed to the recession but you know I think we are seeing some my concern of met articles that it was logistics lat tad more optimistic than I think we should be as of this point I do think that we are seeing we are seeing some some movement and positive movement and we’re seeing that every day and in different systems their chant of the big challenges we have really costly systems that continue and we need to continue to push that in vallata discussions of that competitiveness and American competitiveness over and over the next several decades Zeke is absolutely right the reason why this is so critical is that employment in the u.s. is constrained by health care costs and it is a it is a continual drag and I would say to put my put another hat on this you know if health care costs are constrained if we can realign these issues some of the budget wars we’ve had between the Ryan budget hole descriptions of what we need to do to Medicare as a program you know the most live wire issues will actually be completely mitigated because we’re actually able to get Medicare costs under or health care costs under control that will also lower Medicare costs and that will you know that would make the kinds of things that Republicans and Democrats have argued about you know on the right about rising Medicare in 2022 20s 20 20 or whatever term we’d like to use that would make this unnecessary so I do think the real ball game actually is not in the mandate or the Medicaid expansion expansion as policymakers the real ball game is in our ability to lower health care costs over the next several decades really and use the Affordable Care Act as it should have been used as a leverage point to push those reforms to speed along even faster Tyler you recently wrote a book about sort of stagnation writ large in the American economy in society so I guess the question is how optimistic are you that will escape stagnation in health care here’s my pessimistic optimism on health care I think the economy has recovered we just haven’t recognized it yet we haven’t faced up to the fact that this is what recovery looks like and it’s not entirely pretty that’s pessimistic specimen stick but here’s the kwasi optimistic side of that if that’s your view then you are very likely to believe we have somewhat broken the health care cost curve on now the revenue projections and budgets still remain overly optimistic but I actually tend to think we have seen a turning point and it will stay with us and at some point when we get a much higher rate of what I call total factor productivity growth and a lot more innovation then we’ll be a lot wealthier and have broken the health care cost curve so 20 year time horizon I’m multiply autumn istic but on the health care cost curve alone I’m optimistic right now but only for bad reasons so um first of all I I do think that the recession has had a big impact I don’t think it’s had a hundred percent of it’s a hundred percent explanation I mean health care cost growth has gone

from seven eight nine percent down to under four percent this past few years the problem for all of us is two years is just too short to know whether this is a real structural change or whether this is just a temporary change out of the recession the reason I think it’s structural and going forward over the next decade will be structural is when you go out to hospitals and health systems compared to what happened in the 1990s everybody is figuring out how to do better first everyone’s installing electronic health records which alone won’t change but that combined with lots of other stuff will make a big change second they’re all working because of the law reducing their hospital acquired infections their error rates and lots of other things that are going to save money they’re all working to reduce their readmissions because of the wall they’re all anticipating change in payment formulas and the need to bring their cost structure down so they’re all figuring out how we engineer delivery or and I could go on and on all of those things take time but over the course of the next three to five to ten years so my time horizon is by 2020 we are going to have a transformed healthcare system where we are going to be delivering care in different ways and we are going to structurally be saving a lot more money over time and then as Tyler says we’re going to be richer and then you know we can tolerate a little more health care inflation and let me say those transformations out there they’re all going to benefit you and I know many people who are well off don’t think Obamacare has anything to do with them and let me say they’re wrong first of all all of you are going to have an electronic health record as a result of this bill by 2020 guaranteed and it’s going to be interoperable you’ll go to the Aspen hospital or your hospital in New York or LA or wherever second all you’re going to go to safer hospitals that are going to have less infections and less errors and so that you can be a lot sure of the care you’re getting third you’re all going to have a situation where doctors are better at focusing on chronic illness and better focusing on how to take care of patients who actually are sick and do a lot more coordinated care all of those are pretty much guaranteed and I could go on and on but I think you I know you don’t think Obamacare is anything to do with you but actually you’re going to be a big beneficiaries of the bill it reminds me of a story that Bob Walker who is a doctor and an administrator at University of California at San Francisco told me he said when they first started thinking about error rates around their cardiac care they went into it with the assumption of what we don’t have a problem with that were UCSF were great and they looked at it and they had a pretty big problem with it they were used their UCSF they win Nobel prizes they do groundbreaking research they weren’t actually that good at getting someone who is having a heart attack from the door to error-free care to the in the cath lab and so I mean it’s really fascinating how how much quality improvement there is to be had in this country at all levels right the one thing I would just to bring this back to the court case you know we spent about five minutes maybe 10 even talking about what we think is a element to the bill which is lowering health care costs I would say something that I was relatively shocked by with the court case was that the Supreme Court had four justices who were willing to throw out the entire bill because of the medic because of Medicaid expansion and the individual mandate which we could argue about whether the entire exchanges are operable based on the individual mandate or not someone argue I mean it’s important part that you could still have exchanges but they were willing to throw out all the work that is in the legislation around health care costs and they didn’t even address it I mean they didn’t even talk about it in the in the legislature in the in the court opinion they talked about the employer mandate they talked about the exchanges they talked about Medicaid expansion and the individual minute they didn’t even dress it would really be willing to throw it all out and what I thought from that was just you know it was really scary that and one another reason why I think a lot of policymakers were so concerned that this issue that should have really been resolved and the among policymakers was was being being litigated by the courts who are making law not policy does it change your let’s depart from health care for 60 seconds does it change your estimation of what happens on some of the other big issues before the court do you think it’s more likely the court gets rid of affirmative action next year well you know obviously there are a lot of people who think that Justice Roberts was giving himself a lot of leeway I mean I you know I’m there’s now leaking out of the Supreme Court so which I’ve met you know I went to law school and we worked on the amicus briefs I’m shocked that they’re conservative their parts of the conservative wing who are now leaking to reporters about it but I I’m going to continue to believe perhaps falsely that they will adjudicate law and make decisions based on interpretations of

the Constitution rather than rather than the politically expedient well I’m not a lawyer I did feature to law school for one semester the authority to render this stupid opinion but one of the things you I think you saw in the immigration case in in the ACA is what I’ll term it’s not a great term a sort of Solomonic so what you got in the decision on health care reform by robbers was you know the on the Commerce Clause of conservatives are right on the Medicaid the Conservatives are right I and then you have but the bills upheld for the following reason and I think you got that so the Conservatives get some of this and then the but the thrust of the bill goes to the president and the immigration bill you got pretty much the same thing you know this the stopped and asked for papers that will uphold the rest of it we’re going to affirm federal control over this area again a sort of trying to cut the loaf halfway but I do think you know Roberts clearly is worried about his legacy and I think the reason he didn’t want to overturn the law was his court would have looked like the most politicized court since the Dred Scott decision but I think one should not think that his decision was not politicized I think it’s heavily politicized notice it does restrict the use of a Commerce Clause going forward it does restrict how the federal government can incentivize States to do certain things and as narrow said it does immunize him to some degree going forward is not being the conservative political judge so I think it was a very well crafted crafty decision there’s not much tort reform in the bill right and I’m not one of the main it’s one of the main complaints how much Tyler could tort reform help one percent now one per cents a lot no one should laugh at one percent and almost for doing that but i think it’s often overrated and i think we’ll see it in some form or another within ten years so but there’s a lot of medical mistakes and i’m not sure malpractice suits discourage them but it’s not as if everything is fine and dandy and it’s just a lot of you know crybaby patients malpractice reform is very tricky it’s very hard to get right and a lot of people i think would actually regret it when we end up doing it so because there’s less accountability for doctors and that’s right i would support it but very cautiously and i would not want to oversell it so let me make two points about that since I I was very active for malpractice reform in the bill the first is make no mistake about it the president was for malpractice reform he really wanted malpractice reform prior to running for election he actually wrote an article in the new england journal of medicine for malpractice with hillary clinton gore malpractice reform he he has made clear he’s not for malpractice reform that simply puts a cap on how much you can sue for and I think the main reason to do malpractice reform has nothing to do with the money nothing to do with the money I think Tyler was being a little generous on the one percent it might be half a percent it might be zero percent it’s small money it’s chicken feed as far as cost control what it’s really important for doctors psychological state because when I go out and I go to medical schools and I go to hospitals and I talk about health care reform invariably one of the first two questions is why isn’t there any malpractice reform doctors have three or two good excuses before they begin to focus on what they can do to improve the system the first is malpractice I gotta do XY and z that raise the costs or because of malpractice and the second is those patients they demand everything they want the robot they want the latest and greatest you’ve got to get rid of those psychological crutches for doctors to focus on the real thing which is how do they r en genere care to make it safer better and higher quality I sometimes worry that that a lot of our health care problem is cultural it’s that it’s that it’s not even so much doctors it’s not even so much incentives in the system it’s that we’re Americans and our instinct is do more try everything never give up do the latest do the greatest do the most and that that cultural instinct has enormous benefits right enormous benefits when it comes to having a cost effective healthcare system it’s not so great do you buy that at all it’s all true it’s not i will always spend more than almost any other country per capita that will never change i know but i think the issue here is is the recession actually impacting this as well right i mean the question is do and I not going to be true for everyone people can afford it always going to ask for more and push for more that you were seeing in a wide variety of arenas people are recognizing that we live in a time of constraint one of the reasons why we have lower costs or because

people are consuming a lot less themselves perhaps there will be some discs in perhaps there will be some cultural shifts and also one of the another tragedy of the bill is one of the areas where we have a lot of costs are an end of life issues those issues were we’re heavily politicized you could talk about that since she was I think dr. death panel uh-huh but uh but you know there are no death panels etc so I think that’s also an issue where hopefully we can’t have those conversations culturally and change things culturally before the wind storm starts David I think one shouldn’t put culture in one category and incentives in a separate category they intersect and some incentives reinforce the culture and some incentives undermine this culture of always more more MORE and I think we can get create a set of incentives that actually look for higher value care that is better quality care at lower prices that will change the culture there’s no reason we can’t get better technologies that are actually cost savings in health care the way we have in many other industries the problem is there’s no incentive to do it now under the future situation where we’re paying doctors and hospitals differently you will have an incentive to do things that actually can reduce costs but give you great technology or better than technology better medical care at a reduced rate it’s not like every technology as i wrote for your paper is necessarily better i’m a we have a lot of technologies which people think are the latest and greatest and they may be the latest and greatest technology but don’t add anything to your quality of your health care you know the da Vinci robot for at any man about to get prostate surgery you know is for armed robot every hospital advertises it as the latest and greatest technology there’s no evidence it’s better and there’s some evidence it’s worse you know so yeah it’s great it’s technology but it’s not such great technology that it’s a real advance and there’s this work by the is it it’s a group in Boston or the giving people more information the idea there been some of these studies where when you really lay out in detail two people share decision shared decision-making thank you lay out in detail to people the sort of risks and the benefits and the side effects you see people choosing less intensive what ends up happening is almost there are scores of studies like this and they almost all show the same thing give the people information ten to twenty percent of them will say no I don’t want that procedure whether it’s a prostate procedure or knee replacement or something else and the bill actually has a sleeper clause about shared decision-making which hasn’t been implemented by the government to try to incentivize this because we we knew those data we thought that they were really important if you made every doctor before he or she did a surgery or some other procedure actually give to the patients you will get ten or twenty percent of people say no not for me let’s let’s move to some questions we have a couple microphone circulating is that right what do we have okay let’s start right here in the middle and do we have a second microphone okay great so go ahead why don’t you pick someone over there and right right in here hi my question first of all I think it’s a false argument to hope that Romney is joking when he says he’s going to repeal the health care bill the Republicans when they say things they’re pretty serious about it how do we convince people like this crowd or my friends at home that they need the health care bill and it is good for them even though they’re even though they have insurance that it is good for them in their children so I mean I gave you several things that there’s going to be better for them if the bill gets passed the electronic health record safer hospitals higher quality care here’s I mean their kids the keeping them on their their plan until 26 which is now part of the bill and you know while insurance many insurance company have said they’ll keep it who knows how long they would keep it but also that security that you have a mechanism separate from your employer to get coverage at a reasonable rate in the exchange I think is a really important guarantee whatever your pre-existing condition let me tell you an interesting fact that most people don’t know ten percent of the uninsured make over four hundred percent of the federal poverty line they are well off and could buy insurance and yet they don’t seem to have it most of those people it’s not because they don’t want insurance it’s because they they or someone in their family as a pre-existing condition and they can’t get it at any price this solves that problem for them you know I’d also say there are a number of ways in which the law also emphasizes preventive benefits for an event benefits Medicare the preventive benefits that you get just in the regular health care system the doctors have to provide you and there’s a prevention trust fund that is a little bit vulnerable to attack but there is basically you know we do we do have a broad problem in our system which we’ve referenced a little bit but we have an

acute care system not a health care system we basically pay for every time you’re sick we don’t pay for get keeping people well there are a number of ways if you try to in the bill incentivizes keeping people healthy both in there have reimbursements increase for preventive benefits in Medicare and there are also ways in which is trying to get information out to doctors about what the best prevention methods are so that’s another way in which we’re the bill does try to actually improve the entire health care system by ensuring that it moves away from the acute care much there’s some instant polling that shows the bills already more popular yeah yeah Obama’s numbers have flipped haha hey can you comment on on medic I’m sorry can you comment on the potential impact on medical education I have a friend who’s a Dean of a medical school and says we’re still teaching doctors as if it from 1910 from a textbook from 1900 so yeah well I’ve been convinced in my life that nothing moves more slowly than medical education and it is true that most medical schools have not adapted I wrote recently an editorial in one of the medical magazines that we should cut medical training by thirty percent we could get rid of tons of medical school education and not harm the quality of the doctors were producing a lot of it is completely unnecessary it’s anachronistic and even worse in my opinion there are lots of things necessary for them to understand about the financing of medicine about how you measure quality how you can re-engineer for quality that aren’t being taught I think there’s going to become increasing pressure on medical schools as the decade goes on to really make a big break and to really do something innovative in novel and Lord knows I think they’re going to have to do it there are also some financial pressures that are likely to come to bear on them for not the medical school training but the training afterwards because that’s likely to be cut in the next few years and that will focus the mind when one thing I wouldn’t issue and this is and this is a broader trend that does not just for medical school but medical school is kind of the crucible by which you can see it which is you know the entire manner in which people are taught in medical school really is for the idea of a solo practitioner making all decisions by themselves and as we see technology permeate other areas and other parts of the economy what we’re seeing is one of the reasons we’re hopeful about progress is that what is making it in actually getting better value out of the system the health care system is that team based approaches to medicine are incredibly effective they produce value and they make doctors actually happier so one of the that’s that needs to permeate medical education they need to change the culture as David was referencing but also I think one of the ways that that will happen is that doctors actually like to be in these approaches they like to they like salary over being solo practitioner there are ways the culture is changing in a way that they like and they’re going to have to have a feedback loop to the to their schools when their alumni to actually shift that and I think that is a that will happen it would be great if medical schools would adapt early instead of be dragged to it but that is an area that’s important it’s interesting to look at and let me see some hands again we have to climb go over here for one and then we’ll come up here for number two it’s interesting when you think about how healthcare is changing a lot of this data collection yeah patients don’t use at all yeah what the way in which it matters these doctors use it doctors hate the idea wait a second my hospitals ranked seventh in error rates even if patients aren’t actually going to check it and choosing base just quickly on that I mean electronic from their electronic medical records were great but the way they increase value is they actually can provide you more up to minute information about what’s wrong with you and what the best way to care for you is which really informs hopefully consumers but mostly doctors and what to do about it guests question or Peter Orszag I think you actually before I asked my question just quickly one of the things from one of the panels yesterday betsy neighbor who runs Brigham and Women’s in in Massachusetts indication of the changes that are occurring when asked what share of payments do in your strategic planning your internal planning what chair of payments within the next three years do you think will not be fee-for-service which is at the heart of yeah that’s a change she said a hundred percent within a hunt within three years they are assuming all of their payments are some sort of risk payment to the extent that that is being replicated at hospitals across the country a huge deal and Massachusetts is very excite my question in this let’s

speculate about what will happen if a Romney victory and then a Republican sweep because it strikes me you can’t analyze what will happen in a repeal scenario in reconciliation without taking into account other things that will have to happen in reconciliation and I suspect this is just a guess but I suspect the most attractive thing that will be part for for those new newly elected Republicans is block granting Medicaid they have to do something big block granting Medicaid is big you can do it in a way in which you put upfront payments at a higher rate to start with and then you flatline them so that looks great for the federal government and governors will facing a 50 billion dollar aggregate deficit at the state level perhaps find that attractive so the question is do you evaluate that’s a all the Supreme Court decision then becomes kind of irrelevant because Medicaid is fundamentally different at least along that dimension could you evaluate whether you think I’m crazy or at least along this dimension and secondly if that is that if that is out actually ultimately done what impact it has tyler exactly what i think will happen and furthermore if romney does not win i think there’s a very good chance that will happen over the next ten years anyway under the US system of government so i think the political tendency is that old people win all battles and as budgets get tighter funds will be reallocated from medicaid to medicare often in ways which are not value-enhancing and my five word theory of american politics like old people always win is a pretty good theory i wouldn’t focus too much on romney though i think that is what exactly what they would do but as you know the challenge with medicaid is that the the biggest growth in medicaid would cost the most and medicaid is long-term care for seniors so you know the challenge that exists in medicare and medicaid is that when actual you know when people realize that the only thing that helps them deal with the long-term care services comes to Medicaid not remit occur especially what they thought it mean it’s possible i guess you know that would be an interesting world we lived in in which we kelp kept the Affordable Care Act and denied for middle-income Americans working americans and denied coverage to poor children pregnant mothers some families I mean I guess we could live in that world but it would be a hard world to live in I think Peter don’t you know if that eventualities a passion those of us who really care about people getting coverage and not wanting to see States take the Block Grant and then screw their population or poor population especially what you would have to focus on is what are the metrics that they’d have to comply with to continue on the program and what quality and access metrics so i think democrats will need a strategy for that approach and I agree with I mean I think the one thing which is sort of worrisome about that is fiscally for the federal government it’ll look great but it transfers the risk down to the states and i think you know we’re going to see a lot more states either teeter on insolvency or actually go belly-up and it’ll make stockton look like a you know just a small at end of the wedge first first of all with respect to Justice Roberts I think it’s worth noting that i don’t think Justice Roberts really bought the taxing Clause argument I think he was actually extremely conservative in his opinion and he was simply trying to exercise judicial restraint and transfer the power to pass this kind of legislation to the Congress in he hung his coat on it moving on to the to the to the ne ne quotes Justice Holmes I think in the opinion to that effect I’m surprised that we’re celebrating a decrease in the rate of increase in medical costs in other words i think it was said that the rate of increase of medical costs is down to four percent but we have a one point nine percent gdp which means that medical cost is still increasing faster than gdp and my question is where do you think we get to in 10 years time medical costs as a percentage of gdp and how do we get to eleven or twelve percent like some of our neighbors are so that we can be competitive well i’m actually gonna take a very quick crack of that and then just just philosophically I think it’s important to keep in mind and you didn’t say otherwise but it’s important to keep in mind health care growing as a sector of the economy over time is not only okay it is good think about a rich

society right think about a rich household you’ve got two cars you’ve got four TVs you’ve got a VCR and then you got an extra hundred dollars what do you want to spend it on you want to buy another VCR or do you want to spend it on your help right and that is why over time for rich societies healthcare grows as a share of GDP and it is natural for it to grow as GDP right okay but now to your question which is how high do we how do we get in can we ever get I mean we’re so much higher than any other society steady-state forty percent will love it the other stuff doesn’t make me happier and someday the stuff will actually start to work I mean that’s the miracle so I worry for sin i’m not sure where someday where are we now seventeen eighteen eighty and other rich countries or at 12 right right so honest when we talk about cost control sometimes I slip and say cost savings but it’s not it’s we’re not going down we’re not going from 2.8 trillion dollars which is what we’ll spend in 2012 down to two trillion the question is how slow does it go up to 3.5 and four trillion dollars and that is a very important number because as the GDP grows as David said we are going to spend more there’s very good correlation across all rich countries that that happens but the issue is how slow can we get it for a brief shining five-year period 1993 to 1998 we actually got relatively steady state keeping at about eighteen percent my guess and this is just pretty crude will get to 20 probably twenty two percent over 10 12 years and then you know I think we’ll probably flatten it out assuming we get and Peter preface what he said assuming we get consistent changes in payment by the end of the decade can I just reference the Roberts you know what I thought was fascinating about the Roberts opinion writ large is that you know on the Commerce Clause where we have you know a lot of jurisprudence that essentially argues that since the New Deal the Supreme Court is not going to second-guess large-scale economic decisions by the Congress you know there’s there’s like no judicial difference to Congress in the Commerce Clause jurisprudence a case his attitude towards congressional action is is is one of contempt us choose foreign language but it is with deep skepticism a skepticism that I would argue no majority opinion has had towards against anything that touches economic activity in 30 in 100 years our clothes 200 years so so in that and that is you’re absolutely right he his language around the taxing class is essentially like it could be constitutional so I’m going to find it constitutional I’m just saying that was not the attitude towards the Commerce Clause certainly didn’t have the attitude it could be constitutional so I’m going to find a constitutional and again the dissents before consider of dissenters did call him on that and I think on that one issue they were right but you know my view is that it was an oddity for him to create a new a new essentially a new precedent that you know if you read through the opinion does not have a lot of precedents behind it a new precedent that limits activity under the cosmos okay this adds one other element to why this election is going to be a monumental election may be one of the most important in 100 150 years which is you can have probably at least two justices retire and maybe three and whoever’s president is going to appoint them so in addition to all the other stuff that is going on you know implementation of dodd-frank implementation of the health care bill all the other things that are going on Supreme Court is going to be reshaped there should be a panel next year about why Supreme Court justices don’t retire early and aren’t more strategic about it because if you think about it every Court justices take enormous risk with their own with their own beliefs absolutely i think it’s powered i heard that the number of appt applying to medical school is decreasing significantly and the quality of those applicants is also decreasing now if that’s accurate i heard it from a panel and if that is accurate how is the system going to handle it with the more and more people that we’re going to the emergency room with mandate now having insurance eating primary care physicians and there not being enough how’s the system going to handle it so there are two parts to your question one is have the applicants to the medical schools going down to the best of my knowledge it’s not true actually I think they’ve gone up because of the recession and and people going away from business school so I don’t think that’s actually accurate the second thing is there is a question

about workforce and if we add in 30 million people to the system can we actually handle it and the short answer is absolutely and let me give you a few reasons one nearer actually pointed to which is increasing working on teams where there are lots of things that I do as a doctor that I don’t have to do that a nurse could do or even a health aide who doesn’t even have medical training can do we’re going to see increasing use of that because it makes no sense for me to be doing a lot of those things the second piece of information I would suggest to you is a lot of what we do repeat visits so I’m an oncologist when my breast cancer patients come back right after we finish chemotherapy they come back I schedule them for three months for the first year and then six months where did three months come from it’s hocus-pocus no one has any day that makes any difference and there’s lots of reasons it shouldn’t make a difference and so you’re going to see a lot of change in how we handle that and the last thing I would say is if you look at Massachusetts where they brought 500,000 people into their state no change in waiting times at primary care doctors no change in waiting times at cardiologists no change in waiting times at obstetrician that’s not data from some left wing nuts that’s data from the Massachusetts Medical Society it might be left wing nuts I know we have one last question sir you’ve had your hand up almost the whole time I’m norm Ornstein from the American Enterprise Institute I have a question mostly for Tyler and it follows a bit on what Peter said imagine that Republicans take the House Senate in the White House and pass what Paul Ryan has called the mother of all reconciliation bills that means that we make the bush tax cuts permanent cut the top rate to twenty five percent cut Medicaid by thirty percent and send it back as a block grant to the states it would cut out the tax on the health care mandate and also probably cut out funding for much of the rest of it along with a whole series of other changes what do you think the odds are that Mitt Romney would veto that bill great you’re the Conservatives right close I think he is skillful enough it would not to get into that position in the first place and there are enough Republicans who want to be reelected that they would in a quiet way support Romney and I think a lot of what you mentioned is what would happen I don’t think it would be a twenty-five percent rate that sounds too low but the bush tax cuts would be continued and made permanent but I think there needs to be some kind of health care policy put on the table and it will be radically relabeled but cost control will be kept cuts to Medicare our potential cuts to Medicare will be done away with Medicare will be firmed up that will be sold to Republican and elderly voters but parts on the right will take a real hit and I don’t think the full-blown Ryan plan will ever happen I would just say I’ve been waiting for the silent majority of Republicans for a little while here over the last three years and it’s been difficult to see them on these policy issues so I hope you’re right sounds like norms on my side of the bed thank you all thank you