 Okay, so next up is Atul Gawande and before I, where's Atul? Come on up. Before I introduce him, I just want to comment on some of this young talent you're seeing up here. Two of our, obviously Dan and How Woo and Louisa who just asked the question and Emily Parker who's gotten a number of shout outs. These are our fellows. This is the New America Fellows Program. It was one of our hallmarks from the very beginning. We fund 10 to 20 brilliant thinkers and writers. We try to find them relatively undiscovered and help them put out books that are actually as one of the audience members from the publishing industry said to me, New America is the best incubator for nonfiction books in the country. So I wish we're going to quarter on that. But just to say, you should introduce yourself to the fellows as you meet them. These young voices you may not have heard are going to be the marquee names of the future. So with that, let me introduce another one of our board members. You can see we take great pride in our board members and we also put them to work. Atul Gawande, you know well. He is going to talk about health in America and there's probably nobody or a few people in the country better place to do that. He's known for many different things. His book Checklist Manifesto has been enormously important in looking at the rate of error in American hospitals and actually recommending how you do something about it. He's a staff writer for the New Yorker, which for many people would be a full-time job. For him, it's one of the things he does as he's a professor at Harvard Medical School and the School of Harvard School of Public Health. He's a surgeon at the Brigham and Women's Hospital. And as I said, most importantly, he's a board member for New America. Thank you, Anne-Marie. So I'm going to add big idea number 11 just for a chance to try to add something in there. You can't have thinking about where the U.S. is without thinking about health care. And I think the core, if I can get anything off in the next 20 minutes or so, it's understanding that the sickest people in the country is how you fix health care. Understanding the sickest people in America is how you fix health care. And I think we just keep losing sight of that. The coverage battle is over in a certain way. With the now four years of Obamacare, we've reached the point that even though it's still a debate over whether we repeal coverage or don't repeal coverage, it's now sort of, it's been implemented far enough that on both sides of the aisle, you're seeing the behind the scenes discussions are really about how to accommodate where we are and how to move forward. We do have this enormous divergence in the country between the places that have accepted money for Medicaid to cover the expansion of coverage in those places. And so, you know, right now we get to run this tremendously interesting scientific experiment for all us health policy researchers where we can look at the consequences of coverage in two places, parts of the country that are enormously different. But on the whole, you know, we describe a place like France, for example, as having had universal coverage for decades. In fact, they did not get their last coverage group under their system until 2004. That there is always in many places the left out and it's the effort over time to bring them in. What is going to be the deepest threat to whether we have coverage for the sickest people and all of us at some point become the sickest people. The deepest threat is going to be what happens to the health care costs. It's already been a major underlying factor in the economy and I could not help but hear Steve Ratner's talk without seeing all the health care numbers that I know about underlying some of those patterns of inequality. In the last decade, an insured family has seen its income rise $23,000. But in the end, all but $95 a month of that income has ended up going for health care costs. State and federal debt are largely driven by health care costs and we know the ways in which New America has been talking about for a long time the way as it's destroying the American dream. I think the central confounding fact that we haven't come to grips with yet is that it's only 5% of the population that accounts for 50% of the costs. About 10% of the population that accounts for 80% of the cost. It's the sickest folks. And the whole concept of insurance has been built around the idea that it's fairly unpredictable who those folks are going to be. But both the change in the ways we get sick because we can control illness and then have chronic illness which is a growing part of what it is to simply live in America and because our data is getting phenomenally better. The number of people as we understand genomics and also understand social patterns of people we can now predict with increasing regularity what is going to happen to people and that makes it exceedingly difficult to insure people, very difficult to allow for the huge swings in the costs that people have unless you have everybody under the system. As we do get everybody under the system though you start having an opportunity to look at what actually happens to people and you see how our policies run completely against what the reality is. There's a variety of analytics companies out there that look at healthcare data. Here after all is closing in on 20% of our economy, about one in five people in the country are employed in the healthcare sector and so the analytics companies that are exploding are pretty interesting. I visited one called Verisk. They work especially with businesses that self insure and therefore want to understand what's happening to the health of their population. The employer for privacy reasons can't dig in and actually figure out which of their people are the ones that as AOL's CEO inappropriately put it, their million dollar baby that was born to somebody at their company which of course happened to be someone who could write for Slate and say I'm that person. When you start to drill down, when I went with Verisk I sat down with a guy named Nate Gunn who's an internist to go through the numbers from an employer that was a 4,000 employee firm and they are doing what all employers are doing across the country, what the experience of being insured in America is like and that is that they are increasing their co-pays and deductibles. All of you are experiencing this, right? So we are moving in the last three years or so to a place where it's become increasingly commonplace to have 3,000, 4,000, 5,000 dollar deductibles and very large co-pays. The whole idea is to have skin in the game and the pattern that has occurred across the country is that people are responding to that. They are cutting down across the board because the economy and their co-pays, they're cutting down across the board on the medicines they take, on the ER visits they make, on the doctor visits they make, the number of hospital visits that they make. So this company which went through this policy saw this happening across the board. Every use of service went down and their costs went up. So their question for Nate Gunn was, dig into our data as a doctor with data capabilities and figure out what's going on and what he found was it's the story of the sickest. As we ran the numbers on this particular company you could pull out for me that the number one high-cost patient was a middle-aged man who had hypertension, cholesterol, elevation, coronary artery disease and he stopped taking his drugs and he saved money and then he had his $100,000 event, a heart attack. It was in fact because he ended up in the ICU and there were complications, his was higher than the cost of the average $100,000 heart attack. And so this 5% accounts, ends up accounting for more than half of the cost of this firm, the 5% sickest folks. We played around with the computer data to say, okay, let's take a look at the number one ER patient. And that's where the second lesson came up about for us, which is that the sickest actually get the worst care. So the number one ER visits patient for this company is a 25-year-old woman who in 10 months had 29 emergency room visits, 51 doctor visits, one hospital admission, total cost $52,000 for the year. And so we start drilling down into the data like, what is going on with this woman? So it's all these ER visits and headache visits and you know, Nate Gunn, he's a pretty reverent guy, he's like, this is just drug seeking. She's just looking for some drugs, headache, they're going to hit you up with some narcotic, you're going to be able to walk out with prescriptions. But then we start looking at the drugs she's taking. Yes, she's going into the ER, she's getting a head CT scan every time she gets a headache. And the story is that she's on a migraine medication and it's the wrong migraine medication. And so she's getting her migraines over and over and over again and it turns out there's a group of people with severe migraines who are in and out of the hospital and they're a group of folks, here was someone who was inappropriately treated, would go to the ER, get the same, you know, everyone would notice the medication she was on, give her the narcotic, fix her headache for the day and ship her out again. But no one fixed the problem that she had. No one was looking at the big picture. And that's where the big picture emerges, I think. It's about people who are suffering and whether we meet their needs. I'm at a young physician in South Jersey who's doing what I think is right now happening across the country. And this is kind of the story outside the Beltway, which is a radical transformation in the ways that we are taking care of people. It used to be that these folks were the ones we avoided if you were an insurer or you were someone who was in the healthcare business because you just saw them as a straight out cost. But this physician said, I think these people are getting the worst care and it's an opportunity. And there's a number of people who have begun doing that. So he made a map for fascinating reasons after seeing how hotspotting was done in the police world while he was on a citizen reform commission that got kicked off or digging into the data too much. He poked at the data to look at, well, who are the 1% of people who account for the highest cost in the city? 1%, 100,000 people in the city. It was 1,035 people. They accounted for 30% of the costs in the city. They accounted also for 39,000 visits to the hospital and ER in five years. The lowest had 24 visits. The highest had 324 visits. They had $375 million in bills. Could have paid for the amount of money that actually was forked over for them for more than 100 family physicians for just that 1,000 people. The typical family physician has 2,000 people on their panel. And so he said, I will be their doctor. And he started tracking them down one by one. And he found a blind diabetic, for example, who hadn't been taught how to inject their insulin. And so he'd go to the doctor and his sugars were through the roof. But when you visited his home and he said, show me how you draw your medicines, as this doctor did, he found that he would put it on the table in order to feel where it was, stick his syringe in, draw up, and then inject himself with air. And so no wonder his diabetes was out of control and one thing after another. How would you design a world that began to change that? Well, what you see around the country are a huge number of innovators who are designing solutions that go into the home. Sometimes they're sending a pharmacist in the home. Sometimes they're sending a doctor in the home. Sometimes it's a nurse. Or they are putting someone on staff whose job is to help everyone in that family practice figure out how to stop smoking. But these kinds of programs are lowering costs, 20, 30, and 40% in numbers. It's still at a very innovative phase. People aren't sure how to scale and drive these forward. But what we're seeing is that you have an explosion and a shift in investments from just drug and device in healthcare to how you innovate and make healthcare services change. We know now that healthcare is of a completely wrong design. We've had three main ways that you interact with the system. You go for a 20-minute office visit. If they can't fix you or address the problem or they aren't open, it's an ER visit. And if that can't fix it, then you're going to be admitted to the hospital. We know that's relevant to only a fraction of people. It doesn't address any of these kinds of people that I just talked to you about. And we're starting to see a tremendous amount of innovation that comes from, can we use email? Can we use the web? Can we call them on the phone? Can we do things in off hours? All things that are currently not paid for, generally not paid for, either under government insurance or private insurance. We are starting to see that there are ways that this begins to change. That you have innovators from a variety of different sources that are realizing that you can make those kinds of approaches viable. The question is whether we have payment systems that allow for it. Some of the most powerful changes are going to come from beginning to be able to pay for what you would call non-visit based care that is not based on your eyeball to eyeball sitting down with your physician. And no think tank in the city is tracking that ability to make that transformation. We're going from what I would call the century of the molecule to the century of the system. For the 20th century there was tremendous power in science from reducing our problems to their finest atomic components, to the gene, to the neuron, to the molecule, or to the subspecialists that you see, you know, the right finger of the right ring finger surgeon for your problem. But what we discover is we now in the 21st century are much more interested in the results that come out of these different components is that it's the networks of genes that lead to how genes work. Or it's the ways that the neurons are connected together that lead to behavior. And in a similar way it's how the drugs, the devices, and all of these specialists with only pieces of the knowledge fit together to produce the effects that we have. But we have a system that was made for the molecules, not made for the systems, in fact. We're seeing lots of folks begin to recognize this. Among them are employers. BMW, for example, taking a look at its numbers, found that the top two reasons their employees visited the emergency room were mental health visits and dental visits. So they put on site a dental clinic and a primary care clinic with behavioral health capability. But when I talked to them, why would BMW decide to do this? They were actually running a health care clinic and system in South Carolina. It's not exactly their domain of expertise. And they told me a bumper story, which is that they were building bumpers. They thought it would be more efficient to outsource the building of bumpers. And for a while it really was more efficient. And then as the bumpers started to be the same color as the car itself, they needed to bring the bumpers on the inside and figure out how to go into the bumper business. But as soon as somebody figures out how to do the bumper business properly again, they will be glad to get out of the bumper business and put it out. And that's what they're waiting for the health care system to do as well. I think our area of work and innovation is how to create success through building relationships with people in crisis. That the sickest people are largely people in crisis. They are the elderly, they are the disabled, and they are often the poor. And who will do that and be able to provide the innovations that make it possible to reach these folks? I think in many ways it opens a lot of questions about some of the limits of policy. We are at two diametric opposite poles that we're debating. Do you just leave the doctor alone, or do you mandate through Medicare exactly what they need to do? But in fact, the most effective approaches have been the building of organizations that are in the middle that make the doctor do things they may not want to do, but are close enough to the care, they're local and they're regional, they're close enough to the reality of care that they're much closer than any government can manage to be. So in Camden, New Jersey, where I told you about this doctor, it started out as a bunch of saintly do-gooders, four people on small grants at the Camden Coalition. They did in a year cut costs of that 1% group of patients, they took 100 of them and they cut their costs 56%. But two years later now, they're 55 staff, they have a $5 million year budget, and they have contracts with Center for Medicaid and Medicaid Services, UnitedHealthcare, and the state Medicaid program. And they're not stopping that growth. And it's going to come from working with these organizations that would give you, be able to create policies that give them the ability to use dollars outside of the standard office visit, generate accountable results, and then be able to be rewarded for that kind of success. I will just say there's probably over 100 cities now where these kinds of programs are really starting to take off and thrive in various combinations. And in many ways, it's a map that's parallel to a kind of debate we're having in education. We know you can't run education from Washington, but if you do nothing about it and simply leave teachers and principals with no pressure whatsoever, you just get an enormous amount of variation, failure, and high cost. And I think in the ways in which New America has been pioneering some work in education that starts to hold accountability at the local and regional level, feedback data and understanding, and be able to drive resources to the places that are successful, it's a similar map of what we're starting to do in healthcare and can be done. So thank you. So, time for questions. All right. She's got her hand up. We'll let her get the microphone, and then we'll go over there. There's one coverage right next to you. Meredith Wadman with New America Foundation. There was a really illuminating piece in the Washington Post a week or two ago about a Medicare, or not a Medicare clinic, a pain clinic in Huntsville, Alabama that was billing, I don't remember the exact number, it was something like an order of magnitude more per capita than the average for the nation for pain medication. And this came about because Medicare records are now becoming publicly available. But it raised the question of how do you get control of runaway costs without addressing provider incentives, as long as doctors make more money to do more procedures than all the good stuff going on in New Jersey doesn't seem an adequate counter to that. No, absolutely, you can't. So there's two things about it. First of all, the initiatives that opened up government data have hit healthcare in a big way over the last two, three years. And part of the fascination to me is that docs grumble about it, but there has not been the kind of screaming in the streets that you would have expected when you put on the front page of the New York Times the highest physician earners in the country from Medicare and other steps like that. I think it's mostly been used as a way that has produced more transparency and exposure of these problems and the incentives that are behind it. So there is no question that you cannot, that we're not going to be successful in a world of a fragmented fee-for-service system in which you're paying people for their components for what they do. And there's no better example than when the New York Times and everybody else published the highest earners, that when you scraped away the sort of mistakes in the data, that in the top 10 earners, half of them were in oncology and the other half were in ophthalmology, and they were all about drugs, drug called Lucentus in ophthalmology and a handful of cancer drugs. And it's because in those two specialties you get 6% of the drug price goes into your own pocket as a doctor. So it's just a crazy incentive. It's one that does not belong there. And so the, you know, the recognition that in fact doctors do respond inappropriately and aren't completely professional monks about the reality of the ways in which we're paid plays into what is going on. The experiments that have created various forms of bundled payment, whether it's at the price of the service or an entire organization, an accountable care organization, that gets a fixed amount for the patients per year, is increasingly the way that people believe we can move in this direction. No one, you know, I just would submit that it's a radical experiment. We've never actually had major sectors of the economy where you have to pay for results in that same way when the individual, when there's market failure. You know, so the blind patient as the shopper who can shop around or the elderly Alzheimer's patient who's a shopper who can shop around, I mean these sickest people are the folks that we have to figure out how to govern care for. So as we move to those kinds of payment systems we are seeing that damped down costs in those systems. It requires a lot of data and to some extent possible size and so the concerns are that these big organizations that are taking contracts for a whole payment for 500,000 people and their care, that they are becoming monopolies and that that will end up driving the prices back up. So we're in this experimental phase where we're moving away from fee for service. We're giving big med a budget to lower the costs but will it produce quality and will it still control the costs and still the debate that we're under now. Here comes the mic, why don't you go with that? Why didn't the legacy insurance system not already deal with this? I mean presumably United Healthcare could see that some physical therapist in New York's billing $10 million or that somebody is going to the emergency room 110 times and they would have had an incentive to intervene and figure out the system. Why didn't they? So there's a cynical take and then there's the sort of maybe economist take. So the cynical take is so you get, it's like a hedge fund, you get X percent of your revenue that you have coming in so why do you want to keep cutting the revenue? So that's the cynical take. If you're an insurer trying to cut your total premiums and the revenue there, then why would you want to do that in the long run? Now the argument that I hear from the executives, of course we want to cut our costs because we can try to improve our margins that way. But at the end of the day, in order to do that you have a choice. You either fight with the people who are paying the bills, the employers and others over what the price of the premiums are or you fight with the doctors to lower what they're charging. They lost that battle in the 1980s and 1990s that when they fought with the doctors over what the costs were going to be we handed them their heads and so they found it much more comfortable to battle with employers and say, yeah I'm sorry we're going to force you to pay 12% more this year than it was to tell a doctor I'm going to pay you 12% less this year. As we move into this arena the prospect of being able to make contracts that hold the providers accountable for their costs, introduce transparency and make those more visible, they've generally been on board with but very cautious about how much they think they can do. The most interesting group are really the Medicare Advantage firms which are the ones that are the one-third of Medicare now where they take a fixed amount of money for the care of Medicare patients. Those companies those insurers used to avoid the sickest now they see them as a possible profit center and are in fact competing to take those folks and are driving hard bargains with physicians or deciding to employ them in a completely new model which rewards them for spending more time with the sickest patients really keeping them out of the hospital keeping out of the emergency room and helping them be as well as possible and so we are starting to see some corners of that insurance world where the incentives line up in ways that drive them in this direction. How are we doing for time? Okay, we'll go to the middle here and then I'll keep bouncing. What do you think explains the recent slowdown in healthcare costs and do you think any of it has to do with experimentation with these new payment models? Really hard to know, there's huge debates going on and I'm certainly not an economist to be able to adjudicate on it but the description is first of all to understand for the last five years, six years we've had the last four years has been the lowest growth in healthcare costs in 50 years. That last quarter however there was what would be annualized 10% increase in costs and the reason why probably over the last quarter is that Obamacare coverage has started really kicking in and a whole bunch of people are getting healthcare that they didn't have before. Another possible explanation is that as the economy starts to improve people are spending again and spending it attending to the problems that they didn't their medicines that they didn't fill visits to the doctor that they didn't make the operations that they put off for the last years because of the economic recession. The other argument is that in fact this is a blip and that overall healthcare costs are moderating because we're making structural changes in healthcare like the ones I've described that are starting to work and there's some evidence to suggest that that might be the case. The lowest cost increases have been in the parts of the country that have been moving the fastest into these new models of delivering healthcare and arguably you probably have a mix of both of all of the above going on that it's become very clear to people inside medicine that we aren't going to be able to practice and have a system that paid us the same way we did and that we're having to move to being cost-conscious as part of what providing good care is about. People in medicine are becoming very conscious of something that is called the financial toxicity of our care that is the ways in which what we prescribe can end up bankrupting people or hurting their care because I mean hurting their well-being because we've hurt them financially and as a side effect of actually having these high deductibles and copays that cost consciousness becoming part of the professional ethos of medicine is starting to happen. No question though the last four or five years I think of the economic recession has also pinched people's wallops in ways that made them less likely to get care that they've been looking for and so it might be a mix of both. I'm Wendy Parris. I'm a fellow with New America. I have two questions. You said that a hundred cities have something like the Camden Coalition. Is that specifically doctors going and visiting high cost patients and figuring out if there's some mistake going on there? Is that what that is? My second question is I'm wondering about the impact of these urgent care centers that people go to instead of the emergency room. When I talk about more than a hundred cities what I was talking about is some variation on that because of a shift in the ways that they're being paid for care. Accountable care organizations which is what the Camden Coalition has actually become are now there's more than a hundred of them it's probably closer to three or four hundred of them that are shared savings models that is if they are able to save the money save money on the care for people and improve their quality they will be financially rewarded for doing so rather than the old way or really the way it is for still 85% of people in healthcare when you do the more you get paid regardless of whether it's for a good result or not. So as we see more and more organizations in different parts of the country begin to do this we're seeing lots of experiments and they may be sending teams into the home and really tracking them they all involve what people call population management instead of just thinking about the one patient that you have one at a time and that is they're being rewarded for the ways in which the overall population of their patients whether it's 10,000 or a million patients how well they're doing overall are they having fewer ER visits than they used to are they having fewer hospital admissions are they having their blood pressure and their diabetes better controlled those kinds of questions are going to emerge and even move into the specialty level are we making back surgery less frequent are we taking good care you know by some arguments back pain alone is almost 1% of our GDP so if we think about how we move people out of what we know to be unnecessary early surgery for a large percentage of those but a great number of people who never can find physical therapy in the first 48 hours of a severe back pain that then relates into surgical care that many of these systems are the ones that are starting to figure out oh yeah we should make physical therapy appointments available instantly within the first 48 hours for anybody with a severe back pain rather than just the spine surgeon appointment being the one you can get Lenny this is of course what some of the stuff you got to do when you were at McKinsey right so I was going to ask you a policy related question though if a large portion of the answer of restraining health costs is effectively scaling the accountable care organizations that work what are the top two or three things on your mind that would help make that happen at the policy level either at the federal level at the state level or any of those practical without having to go to congress so I generalize a little more that it's yet sure that it's the accountable care organization specific model that has to work but it is the ways in which you start to reward non-visit based care so you know I think very powerful are ideas like how you pay primary care physicians and paying primary care physicians there's some innovations now around being able to pay for a flat fee for handling people by email handling people by the web and other steps like that so I think those are going to become the sort of powerful mechanisms moving forward it's at the less glamorous level of just how do you pay the individual doctor for what they do than necessarily these large contracts with the organizations I get the sign now that we're ready to move on so thank you very much