 Now, just in case you're confused, I'm a tool. He's Hovick. What a pleasure to get to talk to you. So, people don't realize, I didn't even realize, is a doctor. You went to MIT in molecular biology. He went to Yale for medical school. But then he bailed after medical treatment. My mom has never forgiven me for that. That's right. And ended up going to Wall Street as a biotech investor. But along the way, he became a policy blogger, went to the Manhattan Institute as part of that, has his blog to the stay at Forbes, but then was invited to become the advisor to Romney, and then Rick Perry, and then Marco Rubio on health care. He is now the head of a foundation he is founded in Austin, Texas, called the Foundation for Research on Equal Opportunity. And the chance to talk across lines, we have not actually gotten much of a chance to talk to each other. We have debated at a distance, but the chance to actually talk together is something. First time we've met in person, thanks to America. Yes, exactly. And I think this is part of the opportunity to get to dig into. So what I wanted to start with is part of what is interesting to me is you have been making the conservative case for universal coverage of health care. What is the case, from your point of view, for universal coverage of health care? Yeah, well, first of all, let me just say what a pleasure it is to be here with all of you when we founded the Foundation for Research on Equal Opportunity. We modeled it in part after New America because we really want to be the kind of a think tank that focuses on what the future of America looks like and try to find the policies that address the problems that we're facing in a future-facing way. And of course, you're too young to be my boyhood hero with tools, but whatever expression I can come on with, it's an honor to be here with you. Those of us who are true believers in free markets believe that nothing has lifted more people out of poverty in the history of the world than free markets. Just in the last 25 years, the economic liberalizations in India and China have lifted a billion people out of poverty just in those two countries. Those of us again who believe in free markets believe that the competition, the creativity, the entrepreneurship is what leads there to be more abundance, more access to what was formerly scarce. It drives down prices, increases quality, increases access. So one thing I've always found puzzling about conservatives is that if this was a room full of conservatives, and I said, raise your hand, conservatives, if you believe that we need a bigger government to make sure that everyone has a smartphone, no one would raise their hand. They would actually count on innovative companies to deliver those products at a lower cost and expand access. So then why is it that we accept the narrative that the only way to achieve universal coverage is through more government? Certainly there's a role for government in providing assistance to those who need it. But I think the poverty of the imagination of conservatives has been to not apply their principles that free markets can expand access to all things, to healthcare. And so the argument of the pitch I make to conservatives is say, hey, you all say you believe that free markets can expand access to everything, particularly for poor people. So put your money where your mouth is and do that in healthcare. And instead of being against the outcome of more people having health insurance, show how our ideas can achieve that. So let me, I think this is a really fundamental question in our discussion right now. Is that outcome we're trying to achieve one that is a common cause across much of the political spectrum? Or is it fundamentally unconservative to believe that everybody should have a basic level of healthcare? And I think we see that divide in the debate around the American Health Care Act. You have the coverage caucus and the freedom caucus as if those two things are opposed and you're trying to say that coverage and freedom are not. Absolutely. And so what is the goal? What is the goal of sound healthcare policy? Sound healthcare policy in general? Well, I mean, obviously there are a lot of different people who have different points of view as to what the goal of the healthcare system should be. My personal view is, and then this just goes to the issue of whether healthcare is a right or not. One thing that I've written about and we've talked about this offline is conservatives actually, they don't talk about it this way but conservatives actually do believe healthcare is a right but in a very different way than progressives do. They think of the rights in healthcare are the rights of freedom of choice, the right to choose your own doctor, the right to choose your own health insurance plan, the way you get your healthcare. And that's what they focus on. And again, it seems to me that those things actually can serve the goals that we all share of a system where there's more access to low-cost affordable healthcare. And again, we don't have that debate in part because the conservative movement has not really thought about how to expand access to healthcare. There is this coverage caucus like you say in Congress and the Republican side but it tends to be more about what do we take the status quo to do and kind of tweak it as opposed to I think a lot of us who spend a lot of time in healthcare say we need this system to be a lot less expensive than it is. We need the quality of delivery to be higher and we need more people obviously to be able to have access. And by the way, it's not just about healthcare. I think one thing we lose when we just talk about healthcare as healthcare is that health insurance is really a financial instrument. Paul Grumman once said, well, we wouldn't expect fire insurance to protect us from having fires, right? And similarly, we forget that really the attribute of health insurance that's the most important is economic security. The idea that no one in this country will go bankrupt because of medical bills. And the irony is even though it's mostly Democrats who talk about healthcare in that way, it's an idea that conservatives feel at home with the idea of catastrophic insurance. That actually serves that purpose in the most cost effective way. So I think there's a lot to talk about. There's a lot of opportunity for common ground. And I think a lot of sometimes what we don't talk about because we argue so much about healthcare is what does it mean to have a right to healthcare? Does it mean you have a right to a $2 million treatment that extends your life by two months? Does it mean you have a right to Viagra? What does it mean? Or does it mean that basic sense of that you're not gonna go bankrupt because of medical bills and a basic standard of healthcare? And what is that basic standard of healthcare that we want everyone Americans to have? We don't have that debate often enough because we just debate the dollars and cents so on. So yeah, if I were to talk about the goals, I would say partly it's that, and I'm curious whether you agree or not, number one, that you don't go bankrupt because of medical needs. And the two biggest sources of financial insecurity now are your health and your housing, right? So those are really fundamental critical needs. It used to be food a century ago. That was 30 or 40% of people's bills. Now it's healthcare and it's housing. But the second part of it is that we have this access to a better, higher quality of life and longer life expectancy. And there are stunning and unacceptable, I think, immoral levels of difference that people are achieving varying from cities where it's a six year life expectancy difference between the top 10th percentile and the bottom 10th percentile to cities where it's 25 years and more difference in life expectancy between the top and the bottom. And some of that is about, a big part of that is about delivery of healthcare. So access to a regular source of care from someone who knows you over time, usually a primary care physician, is shown in multiple studies to be worth about 10 years of lifespan. And so getting access to not just the catastrophic event, but getting access to the benefits of having a regular source of care and being able to deal with chronic illness prevention and the reality of being frail creatures who get to live 85 years and have phases of your lifespan. Means having access to that as a system that can serve that and not just have that bankruptcy. Do you buy into that? Yeah, I would say I have two thoughts in response to that comment. The first is I do think that we underestimate, we talk about it to some degree, but we still underestimate the degree to which a lot of the challenges in terms of health outcomes are driven by things like education and economics. So there's such a correlation between say whether you went to college or whether you graduate from high school or not and your health status. And a lot of that is intractable to health policy and the traditional sense of health policy. So that's a challenge that's broader broader than healthcare. And I think another challenge that we have is that we have this fragmented system where we have Medicaid which for a lot of people means really poor access to providers. Then if they cross the poverty line or 1.38% at times the poverty line, they end up in what's now the ACA exchanges where they have a completely different modality of health insurance. And then as soon as they turn 65, they're on Medicare. And so a lot of the challenge with our particular healthcare system is this fragmentation. And one thing that I've talked about in my health reform writing is wouldn't it be great if we actually had something closer to a unified system where take something like the exchange where people are ideally shopping for the coverage and care that they want. But they can also do that when they're low income. They can also do that when they're over the age of 65. Why is it someone's on the exchanges at the age of 64 and then on a completely different system at 65? Why is it someone's on Medicaid when they're at 90% of the poverty level and then on the exchange when they're at 140% of the poverty level? Because people's incomes go up and down quite a bit in that income bracket. So that disruption, that discontinuity I think is a big challenge and a big part of what I've tried to do is say let's do what we can to have a more integrated system in that regard. Yeah, I think there's really strong case to say that employment-based healthcare is a disaster for the future, right? In a world where there is gonna be a dramatic change in the way we work having your house insurance housing insurance covered through your employer would make no sense, having your health do so simply as Matt Miller would put it, a dead idea that needs to die, right? But the problem is transitions. So we have 155 million out of 310 people, 10 million people in the country who are an employer-based insurance and it is often very good insurance, better insurance than we can provide through other means. But at the same time you have employers feeling completely saddled by that and trying to shift the cost so all of us in the room were probably experiencing higher and higher deductibles, higher and higher copays, higher and higher premiums. So when you imagine breaking out of that box but dealing with the fact that people are more afraid of the losses than the gains of a change in insurance the phenomenon we've seen is Obamacare was an example of let's do something about two groups that are missing from the system. The near poor and poor and near poor and give them all access to Medicaid and then people who have to buy insurance on their own. And so let's create a system where you have some guaranteed benefits, some subsidies and you go on to an exchange and you buy it. But you have, and you had all of the fears about what you would lose. Now we're seven years in and now that it's been established there's fears about oh my God you're gonna break that system now. What are we aiming to rip? What will happen beyond that? How do you get through, what I hear is a common belief that we have to move beyond employer based. And naturally there are versions of single payer that take you in that direction from ones that are really based on private provision like Switzerland to the French based system and others which are much more a kind of public insurance a Medicare type of thing. Where is the goal to you? And most critically you can have a pie in the sky goal but how do you begin to imagine getting there? Yeah, so one of the things that was disappointing about the American health character of House Republican bills that actually the leaked draft that came out in I think mid February had a robust reform of the employer tax exclusion, the tax break that allows basically all the value of your employer based benefit to be free from not only income taxes but payroll taxes and local taxes. So it amounts to about $500 billion a year if you add it all up in annual subsidy. So it's really the second largest entitlement in the country if you think about it that way. It's a challenge. And spend a moment on that. I think that might have shot over people. So explain the value in terms of the lost revenue to federal state and local government entities because of the value of this exclusion. We think of for example the tax break for mortgage interest, right? That's about $130 billion a year plus or minus. The tax break, the value of the tax break for employer based insurance because it's paid for and then it's not counted as your wages. And so we all ask you get your paycheck if you have a W2 paycheck or even if you're 1099, you pay your income taxes on that and you pay your payroll tax on that and you pay twice in a sense if you're freelance. But that all those taxes that you pay for anything, a dollar that comes into your paycheck, you're not paying any of those tax on employer based health insurance. So if you add up sort of the aggregate taxes that are involved in that, basically what that means is someone can give you a dollar in wages or they can give you $2 in health insurance. And so the incentive having had the system for 70 years is having more and more money routed to health insurance where it's more valuable because it's not taxed and what does that mean? That means insurance finds excuses to cover more things as insurance that normally in a conventional insurance market would be out of pocket. Like you have car insurance so that if your car gets totaled you don't have a bill for that. But you don't expect insurance to pay for your gas, your wiper fluid, your oil change. So similarly, the model of insurance that a lot of market-oriented people talk about is like, that's a great model for health insurance. Let's have a model where, again, we protect everyone from bankruptcy due to medical bills but those everyday costs that are affordable, actually they'll be even more affordable if everyone is controlling those health care dollars directly instead of routing that through insurance. But it's a big challenge to change the system because as you said, 155 million people are on it and the biggest challenge is, we talk about cancer as a silent killer, the employer-based insurance system is like the silent killer economically of our health care system because it's taken out of your paycheck before you see it. I mean, I could ask all of you, how many of you know how much money is taken out of your paycheck by your employer for your health insurance? Raise your hand. Okay, so a healthy like 8%, 10% of the audience, that's pretty good actually. Normally when I ask that question about five hands go up. So it's a real challenge and then people say, hey, you're taking something away from me that I'm not paying. People don't realize that wage stagnation is driven a lot by the fact that actually overall compensation is growing but all that overall compensation growth is going into health insurance. So the Republicans tried to reform this system in the original bill and then it was watered down and eliminated almost by backbenchers in Congress. So that was extremely disappointing and obviously the ACA tried to do something around this through the Cadillac tax and even the Cadillac tax is sort of pushed back and watered down by the ACA. So how health policy wants like us? We're very disappointed by that. We're just incredibly disappointed, right? This is this ready pool of waste and money that could dramatically decouple employment from, so the best way to put it is every dollar that your employer is spending is invisible to you. It could be yours but it's perceived politically as a tax to take that money because we don't trust that it's coming back to us, it's staying going to your employer. And so I think one of the interesting things is the idea that we still have ways if we learn how to figure out these transitions. It's a smart policy, it's one that's got wide agreement across the spectrum. It is a ready source of significant money and it could be in our personal control as individuals being able to decide how that money spent by your employer is actually deployed for healthcare and have more of our own community pool around that. I think there are many possible pathways forward. I'd like to make sure we open up to questions. And so maybe if hands can go up and the microphone's gonna go around and I'll ask one question then while you get the microphone to someone, which is, so what do you think of the Cassidy Collins bill? Which says what we need are 50 laboratories if and the Cassidy Collins bill is one that says keep the Obamacare taxes in there, give it to the states, maintain the minimum benefits, the expectation on pre-existing condition exclusions. And if you wanna keep Obamacare, you keep it. But if you wanna radically remake your state, if you're Vermont and wanna try a single payer solution, if you're Texas and wanna try a healthcare savings account solution, you can do that. A, what do you think about it? B, does it stand a chance in hell? I think, and by the way, let me just say that I think Bill Cassidy, for those of you who don't know him, he's new to the Senate, relatively speaking. He's a really terrific guy on a lot of these issues, very creative, trying to find areas of common ground and he's a guy to keep an eye on. I think that the concept has a lot of appeal, right? It appeals to, as you said, progressives who are dissatisfied with the current system and conservatives who might be dissatisfied with the current system. So I think there is, it has potential from both from a policy standpoint and politically. The challenge is, of course, Republicans campaign on repealing Obamacare and the Cassidy-Cons bill, by definition, doesn't really do that. And so I think it only gets traction with Republicans if they just fail to come up with 50 votes for something that they can market more resembling repeal. Of course, the AHA doesn't technically repeal Obamacare, it just takes some of the dollars on Obamacare and moves them to different places. So it's not actually repeal. But it's marketed and successfully, I think, to conservatives as being a repeal and replace bill. So I think that's plan A and B, and then plan C is the Cassidy-Cons approach if that fails. And it very well may, because they're having a tough time getting to 50 votes. Microphone. So I'd love to hear you, as a conservative, take on the issue of the problem is not so much the cost of healthcare, but the need for it. And why don't we invest in things that keep people healthy long-term? Starting with prenatal care, as Peter Orszag often remarks, early childhood education, better education for kids, maybe you tax sugar and you subsidize vegetables so that you get the externalities back into the food. That seems to me to be a really nice and conservative approach that might actually generate not just more care, but more health. Yeah, I think a lot of what you describe has a lot of appeal. I think the challenge is that our healthcare system is so incredibly expensive and out of whack with any norms of international standards that that dominates the debate. Both in terms of just, it's the absolute cost today, but also the future growth of healthcare spending. If you look at congressional budget office projections, which are an art more than a science, literally every percentage or decimal point of growth in federal spending as a share of GDP is healthcare, every single one, except for interest on the federal debt. So the challenge is, we have a system right now, and this is a remarkable thing, and this is sometimes when we talk about the conservative case for health reform, conservatives say they're for limited government, the amount of public spending on healthcare in the United States per capita is actually pre-ACA was higher than all but two other countries in the world. So there was more than enough money in the system to actually make sure that every American has not only access to healthcare, but a lot of money left over for a lot of the priorities that you talked about. But the challenge is that because the public spending on healthcare keeps growing at such an incredible pace relative to the rest of the economy and our ability to finance it, it starves the discussion about other policy priorities that we could fund. So it's really important to get Ben the cost curve, and it's, I think it's too bad that while progress isn't concerned, as it's both talked about Ben and the cost curve, they haven't found a way to talk about it together. Yeah, I think there's three basic ways that you can Ben the cost curve and tackle this. One is the consumer choice model, which says, let's have big high deductibles, have people have skin in the game, and they be the drivers of cost reduction. I have reasons why I don't think it's very powerful or very effective. Second is the regulatory model. Maryland has regulated prices of the hospitals and they're moving to a regulation for the total cost of care and trying to figure out how to do that. And then the third is what's called fee for value. And I think there's a fair amount of agreement across the political spectrum, and it's the camp that I'm in, which is that we pay organizations, Medicare Advantage Plans do this right now. A third of patients, people on Medicare, actually get private provision from essentially HMOs that give you prepaid or prepaid for the total budget of healthcare. And you have more and more institutions being able to deliver prepaid healthcare. And what they do once they discover that you're responsible for the whole budget, they stop investing so much in the hospital, start investing in primary care, begin investing in other forms of reaching patients, including group contact, nutrition, health coaching, and a variety of other versions of being able to lower costs while trying to constantly be attentive to the bottom line about cost effectiveness. And so I think there are actually approaches that don't get enough discussion and are very important. Microphone here. I wanted to ask about Alzheimer's and dementia, which in the top 10 diseases in America, that's the only one really going up. It already costs the nation $236 billion that'll break the back of Medicare and Medicaid by 2030. And there's no drug solution on the horizon, and long-term care insurance only covers 8% of Americans. We obviously cannot afford this. How do we address, the class act was not included in the ACA, how do we address this coming crisis of long-term care? Well, I'll say two things, and then you can jump in. Number one is, I think it's a little bit of a myth that dementia is increasing. It's actually decreasing substantially. Alzheimer's is less than 20% of the dementia that there is. The major cause is related to high blood pressure and smoking, and small strokes are the biggest cause. So we're having a dramatic improvement in how well and how cognitively intact people are as they reach 80 and 85 years old and so on. And so people are spending less and less time with need for that kind of long-term care for cognitive reasons. Second is, I actually think that we don't invest enough, and there's a major opportunity right now with a class of drugs that are in the pipeline for Alzheimer's that I think could have a really significant impact. And it's not being followed with the next generation of follow-ons, because the first round may not be the total cures. So I think we underestimate the importance of technology and implementation of new discoveries that really, really matter. That said, we are an aging society, and there will be periods of time, a couple of years, where we will likely need some serious support in our lives. And being able to offload them from institutions, people want to stay in their homes and want to have a kind of network of care that enables that capacity. And a lot of what Anne-Marie has talked about and founded in a group here around the caring economy, I think is really fundamental. There are ways to provide coverage for that caring economy, which I'm not sure the class act was able to completely solve, but it would have been a first shot at having long-term care as a provided benefit that takes a wider view of the lifespan. And so I would favor including acute and chronic care as part of what we try to cover in benefits, but I'd be curious what you think. Yeah, a lot to say about this. I mean, the first thing to mention is that it's only in rich countries where Alzheimer's disease is a problem. In poor countries, or even historically in the US, you never had Alzheimer's because you didn't die at an age where Alzheimer's was a problem. You died of a bacterial infection in your 30s, or you died in the womb. So it's actually, as we get better at caring for people at any age level, you're gonna have, hopefully, longer life expectancy. We're all gonna die of something. So there will always be high healthcare spending at the end of life, and that's why when people talk about, say, prevention will lead to lower healthcare spending, it's not exactly true, because the fact is you might prevent one thing, but you're gonna die of something else. Maybe it's not diabetes, maybe it's lung cancer, or it's gonna be something. So we're always gonna have expenditures at that back end that are higher, and the longer we live, the more there's gonna be a need for long-term care and management of things like Alzheimer's if we aren't able to come up with a cure anytime soon. So I think that problem is only gonna get bigger over time, and we're gonna spend more on people who are what we can now consider elderly over time as life expectancy increases. And of course, I wanna note, of course, there's a dispersion in life expectancy and people who don't have a high school diploma in particular are not living as long as people who have a college degree. So I think there's a lot about this topic where we have to think about what's the world gonna look like in 20 years and 30 years, and not just the world today and the world 10 years ago. But having said that, is long-term care an important policy priority? Absolutely. It's unfortunate the class act, in my view, and not just my view, the view of Kathleen Sebelius, the view of the Obama administration, was that it was poorly designed, it was not financially sustainable, and it's in the way it was structured. So that was a missed opportunity to get this important topic right. And it's unfortunate, but I think it's gonna be a long time before we get to a point, a long time, meaning at least 48 years minimum, maybe longer than that, where we're able to think about a way to do long-term care the right way, because the cost is significant. If you're gonna do it in a way that really covers everybody, you're gonna have to have something like either a Medicare-style structure or an individual mandate, as Peter Orszag would say, for long-term care, and again, everyone when they're young. And both of those ideas are just heavy lifts in the world we live in. So I think it's gonna be a big challenge and I think it's a big one. I think it's tough to deal with. Just to say real quickly, Medicaid, people don't understand, a third of it is already spent on long-term care for the elderly once you've spent down into poverty. And then the creation of buying into long-term care insurance, so you're buying when you're young for insuring in the future, that is the direction that most of us advocate going, but it requires us spending now for something years down the road, and we're not great at that as Americans. Let's take one last one, and so who's got the microphone? There you go. Hi, Attu raised the issue of the moral question of healthcare. And I'd like to ask, Avik, I will confess having grown up in England, I grew up with a national health service, I came to America as an adult. Unfortunately, I have great healthcare, unfortunately I got cancer. That's gonna happen to a lot of people and I think what struck me about the conversation about the AHCA was a discussion about moral failure, that if you can't look after yourself, that you are somehow at fault. And I think that that to me is what is missing from the debate, the idea that there was no cancer in my family, I got cancer, you can walk down the street, be hit by a bus, and have long-term problems, whether you're 18, or whether you're 30, or whether you're 60. And the idea that one sixth of this economy cannot cover every American for basics. Let's put aside end of life care, which I told has talked about a lot and we can discuss that. Having a baby, having a baby who has a complication, your natural birth turns into a C-section. You get, you know, you have a scooter accident when you're 10, there are so many issues that are not to do with your moral failure, but shit happens to you. And the idea that one would discuss health insurance the same way as flood insurance or house insurance, I think misses the point with regard to what is our collective responsibility. I think it's a great question. Can I embellish it a little further? When I talk to, I come from rural Ohio, one of the poorest counties in Ohio, and when I go back home, I was just there over Easter and talking with people. And they have no problem with the idea that Jimmy Kimmel's baby would be covered and that everybody who has a child with a congenital heart defect or someone has cancer might get it. But then we get in this discussion that says, but I don't wanna take care of those people who have mental health problems or I don't wanna take care of people who, why am I using my money to pay for people who, Craig Mulvaney recently said, who don't eat right, put on weight and get diabetes. Like why are we paying for those people? And what's your take on that discussion that there are the undeserving sick? Yeah, so I think there are two elements of that conversation that are actually opportunities for the conservative case for universal coverage. The first is that so much of healthcare is, again, about these things that happen to you where there is no fault involved. I mean, yes, maybe there's some narrow case where you might be able to attribute it, but broadly speaking, there is no fault involved in most misfortune we have in life when it comes to healthcare. And Friedrich Hayek, the Austrian economist who was the intellectual godfather of modern American conservatives in both of his seminal books, The Road to Serfdom and the Constitutional Liberty, advocated for universal coverage on just the spaces that in a wealthy country, he was actually referring to Britain in 1948, which was not nearly as wealthy as America of 2017, that there is an absolute positive case for a system of universal protection from what he described as the hazards of life. So I think that's something that an increasing number of, Mick Mulvaney is not one of them necessarily, but I think there's an increasing number of conservatives who are embracing that view. And the second point is a point I've made a couple of times already today, which is that we could spend less money in America on healthcare, both in terms of public spending and private spending, and cover everyone in this country. If we spent the OECD median of $500 per person on prescription drugs, instead of $1,350 per person on prescription drugs, we could save an enormous amount, hundreds of billions of dollars a year in healthcare spending. If the same thing was true of hospital spending and physician spending, we could save a lot of money and actually cover more people. So that's, to me, the limited government case for a better healthcare system that helps everybody. And again, it was a contrarian view when I started to articulate this five or six years ago, but I think more and more, as particularly now as conservatives and Republicans are really forced to think about what they're for. For all the years of the Obama administration, they could just define themselves by what they were against. But now they're forced to really think hard about what they're for. And a lot of the allies for a lot of the things I've been describing are people in the House Freedom Caucus, people who say, you know what, in my districts, there are a lot of people who are being priced out of the healthcare system and I wanna help them. And I wanna do so in a way that's consistent with my values. So the opportunity is there, and I think we just have to find those allies. OVIC's fantastic talk to you. Atul, an honor. Truly, thank you. Thank you both so much.