 So welcome to Grand Rounds. We're going to go ahead and get started. We're very grateful today for our guests who have agreed to speak on the topic of health care, affordable care act and health care reform. Really what we want to focus on is your questions, how it will affect you. There's certainly no way we can really, I think, teach this or learn this at a real detailed or substantial level in the time that we have. But hopefully we'll be able to touch on enough points to give us a little better picture of what's happening. So again, thank you to our panelists. First gentleman to my left is Mr. Grant Lassen. He's the Associate Vice President of Strategy, correct? And he'll have to correct me on any of these things because all of this information I'm drawing from the internet, his Facebook page. So as I understand, he did attend BYU at one point in his life. It was a dark time for him. He eventually- As a student in classes with our own norms of risk. I think norms upstairs in the meeting. As I understand, you received a master's degree in chemistry as a Iowa State. And then he came to the university. He was in Chicago. And he's come with a whole lot of expertise on strategy on kind of as an institution, how we're going to move forward. Dr. Randy Olson, who you all know, our Chairman, and Wayne Ambrosia, who up until very recently was exclusively owned by the Moran Ice Center. But he actually, some of you may not know, he's taken a position with the university. And I forget the exact title of your new position. It's the Executive Director for Ambulatory Services. So the Executive Director for Ambulatory Services. Fortunately for us, we do get to keep a portion of him. I'm not sure how that all worked out. We keep his best part. His right arm and his left brain. Thank you to the panelists. So this is how the day will go. We've asked Mr. Lassen to take five whole minutes and give you kind of a broad introduction to healthcare. That's really unfair. I have already seen his slides he prepares. And it would be wonderful to go through everything in detail. But again, I think for the purpose of this discussion, really getting to some of the questions that you've submitted will be helpful. Then we'll allow each of the panelists to comment on the Affordable Care Act, how it will affect the institution, how it might affect you, your patients, Moran. And then we have a few questions. There is a mic in the center of the room. If you do have a question, feel free just to walk up to the mic and we'll get your question. I apologize. I am leaving around 8 a.m. this morning. I'm actually going to Washington D.C. with the American Academy of Ophthalmology for some similar topics. So anyway, with further ado again, Mr. Lassen, please. Are we blocking the screen from where we are? I think you're fine. Be careful. That's the pot calling the kettle black. All right. Good morning. I do. I have what could be either an hour long, a 15-minute long, or a five-minute long. So we're going to do the five-minute version. And I'm going to, this is going to be pretty fast, but you'll get an idea what's going on. I thought it would be interesting just to talk about four areas for a second. The insurance companies, employers, providers, and how this is all going to be funded. I'm going to skip this. Many of you know what this curve looks like already. But actually, the message here is that there's a disproportionately small group of people that account for a lot of the spending in healthcare. So when the ACA Act was written, a lot of pressure on insurance companies. In fact, if you had to say who is kind of at the bull's eye of that arrangement, you have to guess the insurance companies are part of that. What are the major things that are happening to them? Well, they have a regulated medical loss ratio now. And that means you can only make so much money. This number here, 85% for large groups, 80% for small groups, is just for how much they have to spend on healthcare. It doesn't include the buildings and administration that they have to supply, the care management, other things to have that. So they have a business now where it's a limited upside. There's something called guaranteed issue. And that means that you can't be turned down for insurance. Period. You can enroll anytime. You send your, if you're in a car accident, you can send your spouse off to enroll while you're in the ambulance and you can get on. When I went independent in consulting, I signed on at SelectMed. It took me about a year to get accepted. And I was a perfectly healthy person, family. Unbelievable how that's going to change. Community rating. That is, you're not allowed any longer to rate people on an individual basis. You have to do it on the population basis. Again, very, it changes the business model incredibly. They did get something in terms of this temporary high-risk insurance, which is there's kind of a tax and then a pool. And if you draw an adverse selection because of the way things enroll, there'll be some money for you. I think there's some real skepticism about whether that'll be enough. And then you've heard a lot about exchanges and essential health benefits is kind of where they just say, for exchange-qualified offerings, you have to have a certain package of benefits. So what does that all mean? Really, it's my interpretation, but I think insurance, health insurance is in a life-and-death struggle for a reason of the. And that struggle is pushing them to do new things. Some of the things Etna is doing, some of the things others are doing, really is showing that how serious they are about it. So the effects really are limited upside, unlimited downside, and a forced commoditization. All the plans will be comparable. They'll be at the supermarket or the exchange. It's really going to be a dramatic difference in the world of insurance. Okay, so I'm going to skip all this. Come to employers. What are the main things that the employers have? Well, if you have more than 50 employees, you're required to offer health insurance or pay a penalty. And they've been good, I think, about capturing the would-be evaders. If you have 100 people and they're all part-time, but they're just, you know, if you added them all together and divided by a typical employee number, would they be a full-time employee? You're forced to do that. So you can't all have just part-time employees. Or you can't divide it all up between a dozen companies. At first when I heard this, I thought, well, everybody just grow their company to 49, start another company. Go to 49, start another company, go to 49. Actually, they make it hard to do that, too. This, there's, qualified insurance has a floor and a ceiling now. The ceiling you might have heard about is this Cadillac tax on high-cost plans. That doesn't come for a long time, but they're, you know, they're trying to say that's, that'll be more like a ceiling. And the floor is 60% of actuarial expected medical expenses. So if you offer a plan that only covers 50% of expenses, it's not going to be qualified. And then employers got some things with it. They could require. And I brought the journal, but we won't go through them. But if you're reading the Wall Street Journal in New York Times or other things, you're reading a lot of healthcare stories about things that employees are going to be required to do. Big story last week was CVS Pharmacy and their biometric testing program. You had to report your BMI. You had to report your smoking status. And you have pretty big penalties if you don't do that. So that, that's part of the way that goes. What does this mean for employers? I think that generally there'll be fewer full-time jobs created. Whereas if you have more than 50 employees, FTEs, you have to offer insurance, but you don't have to offer it to all part-time people. And so I think there'll be a shift towards more part-time jobs. You've seen that in the, was it Darden? Darden restaurants, the Olive Garden people, they're bringing hours down in order to be able to avoid that. Second point is a greater proportion of spouses may not be offered coverage. The ACA requires children to be covered and the employee to be covered, but not the spouse. And so you can expect one of two things, either less offers for coverage or more expectations about compliance as well for spouses. You can expect that they'll pass along a greater proportion of total cost. There was a study recently published by Towers, Perrin, and the National Business Healthcare Group, something like that, where 37% of the premium now has passed along. We can kind of expect, because of the floor, that that's going to move to somewhere near 40%. And we can expect personal accountability for more healthcare choices. There's a lot of good reasons for this. And so I personally encourage this. I think it's been the one tool that's shown an ability to affect healthcare costs consistently. All right, let's skip on to providers. What does it do to providers or for providers? It's done some interesting things. I was glad for this opportunity because I hadn't sat down and worked on a list like this, because we focus on so few aspects, but one of them is it created the Center for Medicare and Medicaid Innovation. And if you're tracking those things, there's a lot of interesting work going on out of there. There's bundling exercises. There's some of the ACO work. And what you're kind of seeing out of the government is a willingness to try a lot of new things to solve some of these problems. Created the Center for Patient-Centered Outcomes Research Institute and funded it. That's, for an academic medical center, a very interesting topic, because while the NIH funding is going down and getting tougher, the PCORI, they call that PCORI, that funding, because it's a tax on healthcare consumers, there's going to be a lot of funding in that. And I think you're going to see a lot of people move into comparative effectiveness research, not the least of which will be our competitors across town. You know, they increase some payments to primary care through Medicare and Medicaid. We're going to have some reduced hospital payments because we have, if you have hospital-inquired infection, if you have high admission, those things are going to, in some cases, not be reimbursable at all. In some cases, it's substantially reduced. So we have to up our quality, essentially. And they're going to take the dish money, disproportionate share. That's been money that we receive for caring for Medicaid and underprivileged patients. And they're going to redistribute it somewhat. So we're taking a vast reduction there. It's not going away, but it's being redistributed. They created the Medicare ACOs, accountable care organizations, specifically by removing antitrust things. Value-based purchasing, it's more pay-for-performance. The practical effect of that is that we see that kind of reducing net payments to hospitals over time. And we have the expanded Medicaid request that, not sure what our state's going to do about that. So I've said this, that we have some nice features for academic medicine. But net-net, we should expect more patients with fewer dollars. So we have to plan on becoming more efficient and effective. That's our takeaway. Okay? Let's get through this. And then, you know, just to summarize how are we paying for all this, that you've heard a lot about some of these and you haven't heard at all about a couple of them. I'm sure. You have this individual mandate. And the penalty for that rises over time. You have an employer mandate. If you're required to offer insurance and you don't, it can range between $2,000 and $3,000 per person per year right now, where it's starting in January 14. There's this medical device, excise tax. And excise tax is a revenue tax. It means it doesn't matter if you made money making it, you pay it anyway, like a sales tax. And, you know, that's considered to be onerous to the medical device manufacturers. There is a recent Senate vote to rescind it. We'll see where that goes. There's a Medicare high income tax that raises the percentage almost 1% if you make enough money. There's a health insurance tax. This just hit the airwaves this spring. And I think this is less than a month old. But for all covered health plans, they expect that there'll be a 2-2.5% charge of premiums to fund some of this. You have a PCORI tax, that's the patient-centered outcomes. You have Medicare Advantage. This is another one where it's a little bit of a question because they had a chance to maintain pathway just a few weeks ago on the reductions. And they elected not to. They caved. Due to huge pressure from the big insurance plans. Exactly. And I think one of the things about a year a year and a half ago you might have said is Medicare Advantage will go away. Yes, I can. There's two forms of Medicare. The one's traditional where you pay money and it's like a traditional insurance. You have a copay. Medicare Advantage is like managed care for Medicare. And when you sign up, they essentially do away with the copay aspects. And you get some more benefits. A lot of times the pharmacy benefits, ophthalmology benefits, there's things that are improved. And that's done through private companies. In our market it's United. Altius. Select does one. We talked about doing one of our own. And Humana does one. So, I mean, that wasn't a popular thing with the original ACA Act. And I thought it was going to squeeze it good. But it's proven so popular. I think it's going to be difficult to reduce. We talked about the disreduction, the value-based purchasing, and probably there's a lot more to access we could go through. But one, just to emphasize how broad reaching. If you use a tanning salon, 10% revenue tax on that as well. So, what would we say about health care? I'm going to confess, I'm not exactly sure what's going to happen. There are a lot of parts in motion. This fall with the exchanges coming on, with everything going on, I don't know what's going to happen exactly. There will be changes. I'm not really a doomsday on this. If something doesn't work, I think they'll be mitigating actions taken to remediate that. And so, I think the parts that prove unworkable will be worked on. And as far as ourselves, we just need to stay focused on value and improvement. Health care's not going away. We're not going away. We just need to make it better. We need to be responsive to society's needs. And you all are largely. And so, I want to encourage that. We're just going to keep on that pathway. Okay? Thank you. Well, we get Wayne's presentation taken up. Anyone have, we'll just take one question now. If anyone has a question for Mr. Lassen. So, my question then, there are some questions that people had sent in previous. Can you just explain what the individual mandate is? Me? Yeah. One of the main problems with the way we've structured our health care insurance market is that you have some people who consume a lot and some people who don't consume very much. But over the course of your life, you tend to consume more. And so, younger people have tended to not enroll in insurance thinking it was a relatively wise gamble to go without. What that does is it takes money out of the insurance markets over time. And so, the ACA requires each and every person in the country to buy insurance, health insurance. And that was the subject of a Supreme Court ruling, a huge, huge legal fight. And the Supreme Court essentially decided that that was okay to require that. There are a few exceptions if you need subsidization or you don't have the means. But mostly it's required. And it's probably a good idea for the funding, general funding of health care. The risks about it are that the guaranteed issue and the penalty are pretty modest. So, we still think there'll be a lot of people who will decide not to buy insurance and who will get it only when they need it. And that puts at risk the general funding model for the Affordable Care Act. The problem is that the penalty is not very big. Well, but okay, but let's put it in perspective. The average cost per employee per year for insurance is maybe per person is in the $4,000 range. The penalty for the individual mandate in year one is $95. Sure. It just won't balance the books. A lot of people may choose to forgo that part. So, let me just add the second part so you understand the full picture. And that is that one of the little arcane parts of the law had to do with the battle over what's risk rating. There's very little that's risk rated because there's no pre-existing conditions. But one of the important risk ratings is age related. And the usual insurance risk rating for age based upon actual actual cost, which is where you get is about five and a half to one. In other words, your youngest group, 18 to 24 versus your older group just before Medicare. It's about five and a half times different cost. So, double ARP who agreed to go on board lobbied aggressively for those people because they sign up people at 55 that they wanted it two and a half to one. And there was a big battle that went on over this. It finished in the House version at three to one. And everybody was saying the law of unintended consequences is going to have a huge impact. But the way the whole bill came together is when Ted Kennedy died the Senate didn't have a chance to change the bill and they had to agree to it through a process called reconciliation. And there's a favorite cartoon I love that I showed to the residents a week ago and it's a picture of Harry Reid as Santa Claus with this big bag he's trying to get down the chimney and it says it was heard throughout the hill on the day before Christmas. I don't care how bad this is get me a bill. So they were stuck with this. So what is a consequence of the fact it's only three to one? The 18 to 24s particularly a lot of those people who were families and the rest have traditionally had insurance and they've been in very important part of the overall equation. The older ones obviously are going to have less cost. Their cost is going to go somewhere between 180 to 225 percent of what it's been and it's going to make a lot of sense for a lot of people insured therefore to pay the penalty and wait until they get their insurance when they have a problem. And for a long time the administration denied this but Sebelius just finally came out and said you're right that's a flaw. You can't go up on the very younger people. Well you can't avoid the math on that. So there is a feeling that a lot of those young healthy people are going to be better off paying their penalty waiting until they have an illness and of course the whole purpose of insurance to spread that out. So that's one of those things a lot of people who are very involved in this are looking at it carefully but no question for younger people insurance rates are going to go up dramatically. So I've been asked to talk a little bit on the topic of what we're doing to prepare for all of this when it comes to an outpatient kind of operational perspective as well as a high level institutional approach to structuring things for success. So you can put whatever year you want up here as far as health care crisis in America goes this slide just demonstrates that it's unsustainable. This is I'm sorry for the size of this but it shows the per capita spending on health care in America compared to other countries and we all know that that's unsustainable. So we realize this and began about six years ago focusing the organization operationally not around the jure of the day or whatever we were getting dealt to us that particular year from Congress but what could we do at the core of our operations to ensure our success as much as possible moving forward operationally. We made that decision that we were moving into a value based kind of health care economic environment where it was no longer we were going to get paid for everything that we did but we had to bring value to the marketplace and we defined value within our organization and others do across the country as the quality or outcomes of our patient divided by the cost. That truly is the value that we bring into this world going forward and to that end we started to focus around the exceptional patient experience our quality outcomes and our financial strength and we have held to this direction for the last six years operationally and it has served us well and will continue to serve us well going forward in the future. I'm happy to report to this group for the last two quarters within the Moran part of the health care delivery system. We've reached our exceptional patient experience goal the last two quarters in a row. We struggled a little bit to get there but now we're there and we just need to maintain that and sustain that going forward as far as quality this is playing a big role. You probably know this but for several years running now we have been in the top 10 nationally as far as our quality rankings in the university health care consortium. This is a big deal because we can demonstrate to the people that we serve that we have a quality that we meet or exceed consistently. An example of that is we recently launched a new part of our organization focused on business development and going into other markets and looking at things. Our team went down into the Nevada market and had a discussion with several hospitals down in that environment and lo and behold they were sending all of their tertiary care to the University of California health care delivery system to Stanford and to UCLA and in the Bay Area as well UCSF and when we sat down when the team sat down and talked with them we were able to demonstrate that none of those organizations who are in that quality measuring group had been in the top 10 let alone consistently in the last couple of years and we were able to demonstrate that our costs were about 30% less than what they were receiving from those University California system operations so that really helps us then to compete in a larger marketplace for patients because we are becoming and focusing into this value driven organization and then of course the financial strength of the organization is always something that we've been focused on but it's not the only thing now because we have a balanced scorecard going forward. Another thing that I'd like to just make you aware of and all of this is on the intranet site so if you want to do a deeper dive or understand what's going on you can go to intranet you can go into either Dr. Vivian Lee's blog area or as well into the area of health care transformation it's right at the top bar for choices when you get into the intranet and you can see on our intercom intranet there'll be this section here on health care transformation and how we've organized in these committees that are focused in on managing patients managing populations managing resources and finances and then managing the market with senior leadership all the way across the line. They publish routinely their activities and what they're working on and the goals that they're setting so I encourage you to look there as well but this will be very important going forward and it's co-chaired by Dr. Mulvihill who was the previous chair of the Department of Surgery who elected to leave that position after working his whole career to arrive at that point to be the CEO of the medical group now for those of you that are physicians or otherwise in the room that don't realize that that was a pretty profound step for him and I guess that demonstrates institutionally that throughout the organization leadership now is stepping up taking on other roles and responsibilities to help move this organization forward. Co-chaired with David Entwistle who leads the facility side and so the unification of the physician group with the facility at the top end of this governance committee is something that I'd like to note as well. Here again this is just straight forward we're now defining that we're moving into this value based economic world in health care where we have to demonstrate value to be effective and to compete and to do what's right for our patients defined by quality outcomes divided by cost. At first slide had a time article from 2012 about you know how health care was broken I don't know if any of you have seen the recent time article that was written about the costs of health care and the whole transparency of what those costs are all about it was almost damning to the health care delivery system in certain ways but I think it is making the point that we have to truly understand our costs in health care. Dr. Embodied gave me a recent article to read on health care costs and surveys that were done in hospitals across the country major delivery systems were surveyed and asked based on a certain DRG what the cost was for a certain procedure and it was almost embarrassing the numbers of institutions across the country that could accurately quote a price for a service. To that end and I'll give Dr. Olson a little bit of credit here with my last slide. He brought forward to the organization that we really needed to understand our costs and Dr. Vivian Lee the senior vice president was an ambassador for this as well and said you know we truly do not understand what a cost us in this health care delivery system to do what we do back to the point the major point of the time article. So we have put together what we call our value-driven outcomes or operation task team that has been able now to formulate and we're starting to refine this the ability to compare. So what you see in these columns here if we were to think of this as different surgeons doing an orthopedic surgery and comparing the cost of the one over here at the left of about $18,000 compared to the one over here that's about $9,000 for the exact same procedure relative same complexity of case and broke down by what it costs us for facility costs, laboratory costs, operating room utilization and the list goes all the way down to supplies. This gives us a base start on understanding what our costs truly are compared from one doctor to the other then we have to overlay on the top of this the staffing costs related to doing this kind of work and then most importantly the outcomes these doctors and these teams create for patients when they actually do the procedures. We can never lose sight if we just focus in on how much things cost us we would go amiss in starting to just target and say you have to reduce you have to reduce. We also have to overlay the outcomes because there's a potential that somewhere in the middle of this is the right cost for the procedure because the outcomes are at the sweet spot and the patients get the best outcome at the most approachable cost which then gives us the greatest value for the procedure. So those are just my opening comments and I'm sure this will create a lot of questions going forward as well. Dr. Mbadi yeah so actually the biggest cost you're talking about this one right here I would say those are supplies yeah sorry the slides tiny and it's hard to read from the back so I've asked Dr. Olson to comment on how this may affect the Moran and ophthalmology more directly you how this will goes when he's finished he'll return down to the panel and then I have some questions I can ask but really the time is yours to have the questions you have asked for the sake of order to make sure everyone gets their questions answered please come up to the mic in the center so there's a bit of a line and you can just get your questions answered that way. We'll end at 8.30 although I believe everyone can stay a little bit longer for questions and we understand it if you do have to leave Dr. Bill Barlow will sort of be taking over the manning of the meeting here in just a moment so thank you. Thanks Jeff I appreciate a chance to get to talk about this important subject turns out that the residents got a complete lecture on this a week ago and I had a chance to talk about kind of a big broad picture that was happening with the healthcare reform so it's good news and bad news for ophthalmology the bad news is that we're relatively unimportant in the big scheme of how these costs are all aligned that's the good news there are certain groups out there in which this is an absolute tsunami. Radiology I mean radiology is already getting hammered and it's going to get worse there was a big announcement that came out that a whole program decided to just close their radiology including their residency and they were going to contract through tele radiology of a group out of the Midwest in New York and they said we'll cut our costs by about we'll cut our costs down to 30% of what has been in the past poor residents were caught out there and no other residency program would pick them up now it turns out they back down so why is it that I feel like we're not going to have nearly as big impact for our areas down good so why is it that we feel as though I feel we're not going to get impacted nearly as much as any well it turns out there's certain things that probably are paid best on a widget system on doing an item of business and if you've got somebody with a cataract even major socialized countries like Sweden have back down and realize they're better off with cataracts for instance paying per individual case it's going to be different we'll get paid for the entire procedure and for a longer period of time so once we declare there's a cataract that's important and needs surgery you'll probably get paid from that time out through six months for everything there's not going to be any additional charge that's going to be allowed they're going to factor that into what's called an episode of care but that's not that different from what we have now we can certainly easily handle that those involved in chronic care I could see some of that could potentially get paid around a year's service for people normal like glaucoma I could see glaucoma get into where you're going to get so much for a year the huge explosion in regards to ancillary services services particularly imaging is the reason why radiology is getting hit and that's true with us as well and so all of a sudden what was a profit area will become a cost they'll amortize that if you've got somebody who says glaucoma that person also okay you got X amount per year you manage it and so the whole idea there is to try to decrease this huge increase in imaging we just did an analysis for instance of two different groups where we're taking care of our now our own Medicaid contract we have essentially our own Medicaid risk contract here at the university and one group we looked at was for the same overall group of patients was about five times as expensive they had their own MRI scan and they were doing MRI scans at the rate of about five times the average of everybody else in the valley well that's got to stop those kinds of changes and I promise you if there's not a profit in it it'll stop people stop doing that kind of thing I could see in those involved in diabetes there's going to be big emphasis on trying to decrease that risk burden try to bend that that's a big part of the cost curve we've got all kinds of historical things pushing that in particular childhood obesity I've seen some figures saying that to children born today if we don't change it will have a 50% chance of getting diabetes in their lifetime that's pretty tragic so those are going to be interesting to change but a lot of that I don't see a big impact for us in ophthalmology we'll get caught on these societal things who's going to be insured who's not insured guaranteed we're going to get paid less per unit of activity but we'll have a lot more people inside the system so I predict in many ways we're all going to be busier there'll be periods of time to transition to look at it but we do need to absolutely emphasize and look very carefully at what our costs per unit of activity and so we're very very aggressively looking at the cost for everything that we do so that we can look for opportunities to change and I think all of us need a partner together to figure out how to do that how to make sure we do it now you can't do it by just doing it in a way that's not as good because quality is going to be very important and a huge thing that we're just getting started with is going to be transparency how many here are aware of the are aware of the fact that all of the faculty at the University of Utah with their press gainie score that it's publicly listed now out on the web you could go into Google and look up your name how many here aware of the fact sounds like most of you aware of that fact turns out that it's not been a huge negative impact we're all on things like craigslist anyway and a lot of that was blatantly unfair and so you're going to see more and more of that kind of thing costs are going to become very transparent they're already a big battle on different websites going out to share this part of the problem is a lot of the systems that can't even say what their costs are but that's going to become a more and more difficult to do so if you're going to get a hip removed you're going to find out well if you do this at IHC facility it's X amount versus something else there's going to be transparent pressures for those kinds of things and I think that that's not necessarily bad that those kinds of things are going to change I think the hardest part for all of us are going to be the unknowns what we have now in regards to the Affordable Care Act is an experiment and it's an experiment with moving parts the bill clearly had some significant flaws and there's good parts about it but there are a lot of unknowns those are changing a big part of this was the health exchange a lot of states have opted now to be out supposedly the federal government was supposed to step in where they were out they're not ready to do that they've already announced they're not going to be ready until January 1st of 2015 and a lot of pundits don't think they're going to be able to make it even by them so you can see that in those states that don't have it and we're not clear right now it looks like I probably more likely than not will not have an approved exchange in the state you sense the same thing I mean they're trying to get H approved but right now it appears it has to be substantial change they're calling for small employers on H not individuals so just they're going to do so not individuals in regards to that one and then this whole thing about Medicaid it turns out that the one thing the Supreme Court did to the law is they said it is constitutional but you can't force states to do Medicaid so now you're hearing about which states are in and out and right now we have about half the states that look like they're going to be out and so they're not going to be forced they're not going to take the additional money that was going to expand their Medicaid population we may in some states have the unusual situation that people now on Medicare are going to get kicked off because of the law so I think those kind of unknowns are going to create a lot of uncertainty and a lot of change but for those with pre-existing conditions I think it's a blessing that finally that's going to be done away with I think that was an awful game that we were playing in this country and there's going to be a lot of uninsured they're going to have some opportunities so some positives but a lot of concerns about where it's going to go so anybody who can look five years in the future they know what's going to happen don't believe it nobody knows exactly where all of this is going but I think that we do have the opportunity to not quite get caught up in the melstrom right away and yes we need to make sure we have higher quality and we got to look in regards to being more efficient in what we do because as long as we're focusing on that we're going to do just fine so that allows us to open up for some questions some of you had already submitted some questions so has Jeff already taken off he gave us some questions yesterday do you have some of those written out the questions that were did you save any of those have you got them why don't you come up here and I'll read off some of these questions here some of you had already submitted okay how does the legislation ensure more people I think Grant already talked about that we have multiple mechanisms where that's in place first of all being able to be insured and understand it wasn't just that you could lose insurance a lot of times people could still get insurance but they had to pay an outrageous amount you cannot risk rate for any pre-existing condition except for one who knows what pre-existing condition does get a risk rating who knows yeah you know what's one pre-existing condition that does get a risk rating smoking so there is an increased cost if you're a smoker they try to get obesity risk rated but that was not they didn't do that age and smoking the only two things nothing else then therefore can have a change then of course those that are between 133% of the poverty level and then it's a slow margin that you can get starting out 100% of your insurance essentially covered and then it decreases down to where you don't have any coverage again and so there's a big group that were caught in that magic middle sometimes called the working poor who didn't have insurance but they weren't low enough that they get Medicaid they're going to get subsidies to help them buy insurance and supposedly on the exchange but the exchanges may not be up yet those are the kinds of moving targets the whole idea was try to dramatically eliminate the number of uninsured the latest figures I'm seeing suggest that we will cut the number of insured in this country over the first year by about in half so not quite as good as they had hoped originally they thought they were going to cut it down by about 70% to 75% but because of a lot of the states opting out now it looks like it's going to be about in half yes Jim well if we pick up the number of uninsured by 50% and now they suddenly have coverage with the overall idea that a lot of the uninsured have been waiting on things in particular waiting on things now until they get insured that there could be a huge expansion of activity at that particular time we're talking an additional group of people in the country that will be insured in the range of 35 million so it's a lot of new people that will be on the system all in one fell swoop so how much that is wildly different predictions but I do think we'll see a lot of people who all of a sudden have mainly taken care of their on the cheap or when they had to in emergency rooms it's the worst way to do it that will now move into the usual care system so I think indeed we will definitely see a big increase of number of people who are insured now those who have agreed to go with the Medicaid program so it gets expanded federally subsidized hand who have aggressively put together their insurance exchange will see the greatest increase right now that's not going to be I don't think a big issue for in this state I know it's not 100% decided but it looks like we probably are not not going to be opting into the new affordable Medicaid plan and we just heard that our exchange is going to be limited so it won't be quite as much in our states some states who have a very we have a somewhat smaller burden than most states do in regards to uninsured those with a very very large burden who are fully in they expect to get inundated yes Roger so it just so happens we have the director of businesses and that has to do with the whole primary care conundrum sitting right here in the room so there's a lot that's ongoing in regards to that but this is a lot of what Wayne's time is involved in so let's talk to the guru and I certainly Grant and I can give our two cents on that Wayne so I hope I can live up to that introduction it's a daunting task but it's absolutely certain that we have to increase that and so in understanding as we increase we want to increase with quality providers and we understand that the medical training system is not generating enough primary care providers to really move forward in a robust way other strategies are starting to be deployed looking at mid-level provider compliments coming into the system looking at partnering with already existing health care delivery systems within the marketplace so that we don't have to create all of those providers ourselves is a strategy that Grant and I and several other people are working on as well at the same time we look at the strategies and how we're going to increase the number of available providers that we need to deal with the populations we're going to serve there's another initiative moving down the road of how we improve the quality of the care that we deliver in our primary care delivery system and to that end we've launched an initiative institutionally called the certification for the patient centered medical home this is a nationally accredited process that we're going through so that our primary care delivery system will be standardized to the point where we have a way of keeping track of outcomes being able to understand clinical pathways costs associated with that so that we can be able to better manage the populations that we're serving so we anticipate we'll be able to make application for that and receive a tier three rating which is the highest rating you can receive nationally by January 1st that's one of our primary objectives right now is to get that certification that allows us then to go to the marketplace in a very concerted way to demonstrate that we have defined quality and in managed care kinds of arenas are in reputated kinds of arenas where you're getting lump sums of money to manage populations and we can demonstrate additional value by the quality that we are producing within our system and measuring so it's a two prong approach here of getting the providers that we need in the right place the right kind of partners we want to partner with and then at the same time making sure that we've got the maximum value that we bring to the marketplace at the same time so you have a comment on that one? Wayne's given a good description I think I have a friend of mine who's a vice president united and he tells me that two thirds of the people enrolled with them each year don't see a doctor at all and we know from the plan data that there's a group of people that really use very little and so I think part of our primary care strategy has to be physician time on those that are more sick and using the extenders and other preventive models all kinds of technology face time whatever we can work out to help the others stay healthy and of course nationally the big feeling is that primary care rather than trying to take it all are going to be more and more involved with teams and that the teams are going to include physicians and assistants and not necessarily nurse practitioners but a lot of RNs and a lot of lower tech people that are going to be spending time they're going to be going to homes pick at that high risk group so we'll see a substantial change in regards to what that looks like going forward we also though have a very interesting trend that's happening in some of the areas of the market where primary care is particularly short that is that the inundated burden that group have been dealt with have pushed them into the option of instead of going concierge and so we have large areas of the country right now where the majority of primary care people have said that's enough I'm giving up with this and instead what I'm going to do is I'm going to take say five thousand dollars per person I'm going to limit my panel to you know maybe fifteen hundred or two thousand people you have unlimited access to me you can do whatever you want with that and I'm not seeing anybody else and that's become particularly popular in Florida I understand in some areas you can't really see primary care hardly unless you've agreed to pay concierge down in the desert Southern California that's now become all of our snowbirds that go down if you're not paying for concierge you cannot get primary care covered under Medicare right now can't do it so we've got those kinds of trends that are happening in the country that raise this financial issue about what exactly are we going to do about this that's part of the reason why we'll see more and more where emphasis is how do we get better reimbursement for primary care how do we try to entice more of our medical school classes to go into primary care so you'll see that kind of dynamic happening at the same time let's go on with our list here says what does the law do for pre-existing conditions we already talked about it's gone that's pretty amazing you think about it I'll point out another area is that for a long time a lot of insurance companies were able to essentially ignore anything having to do with psychiatric illnesses and that they didn't have to pay and that's going to get mandated where they're going to have to start taking care of it I think that's a big blessing for those people who struggle with those kinds of issues huge burden huge number of people a lot of our homeless are there because they have bipolar schizophrenia and they have no coverage no payment and could be treated and pulled out and could be taken care of and I think that's going to be a big positive change we mentioned the one is smoking so it turns out that the risk rating is 1.5 meaning smokers can be charged up to 5% more and no more it's going to be essentially 50% so that has not been a differential for a lot of places but that will be and it turns out that that does not cover the full cost it turns out that the average amortized cost for smokers versus non smokers is actually 2 to 1 we were not it it's double the overall average cost but for a lot of it's going to be a shock 50% more costs that they're going to have to pay for their insurance and I know a lot of plans out there for a lot of companies they're just saying you're going to pay the whole amount so that's going to be an interesting change you've heard about the individual mandate I think you've already got pretty good idea what that is it's a pay or play situation going forward either you have insurance it's also true in regards to any company over 50 will have to pay the penalty now there's a variation we haven't talked about and a lot of companies have tried to provide good coverage and they have seen the biggest significant increase in their overall cost year to year in association with their insurance coverage we heard a CEO here in town at a little meeting I was out recently talked about over the last three years he has seen his insurance cost because of the risk pool that he has of people and you don't hire people based on the fact that maybe you know maybe they've got an aneurysm or maybe somebody's got high cholesterol what have you you don't even know that he just happened to have a risk pool that insurance his insurance cost increased a minimum percent each of the last three years and so a lot of those people are going to pay the minimal amount to not pay the penalty they still want to cover insurance and they're going to dump them on the exchange that means that the people who have such that kind of coverage are going to have to pay dramatically more money for their insurance care to cover it and I think the shot heard around the world is when Rahm Emanuel the famous mayor of Chicago who's had his huge battle in regards to the education union and all that's involved in Chicago that he announced some people think it was a negotiating ploy but he announced he was going to pay a fixed amount and to all the teachers and then have them all go on the exchange so if you start getting large government entities and the rest doing that then obviously that'll put huge impact on what's happening and an incredible burden back on the individual trying to get that kind of coverage they want so we talked about the employer mandate we have that here's an interesting question how do you think personalized health care and new modern diagnostic and treatment options both pharmacological and surgical will affect health care costs Grant you take that I'm willing to take a shot at that one for quite a while I was employed at a company called CSC Computer Sciences Corporation and they owned some drug companies and this was one of the big conundrums for them was as you got to personalized medicine the development cost went higher and higher and your effectiveness got a lot better but the cost was outstripping the ability of patients to maybe conceive a pain I think personalized medicine in the next iteration will be a little more aggregate than that and we'll focus on which drugs work with which patients to greater effect and in the long run that kind of approach has promised to be less expensive we know from a lot of cancer drugs are minimally effective over large groups of people but if we were able to segment and say which cancer drugs works for which cancers and which people then your effectiveness would go up and your cost could come down so I think that's one of those where you're just not quite sure which wins in the tug of war if we went straight to individual gene therapies for every person of course we'd be a budget breaker but if we can take these incremental steps towards understanding the pathways of action and which drugs work and being more effective at the same time we'll have better health outcomes which we know has lower total costs and we'll get us some leeway to keep developing the more expensive more exotic stuff that would be my thought so I think that will eventually be a payoff that will essentially save us money by it's a long time in the future and a lot of it depends upon how much flexibility we continue to have and what you can charge if indeed you've got a monopoly on that as of now it's almost essentially whatever the market will bear and so you see some of this personalized medicine and some breakthroughs in areas and the costs being charged are in some instances like a half million dollars a year well that makes it pretty difficult to amortize those expenses now that's dramatic for those who are impacted if it has a huge impact which it has in a few instances in their ability to survive but that's because society's paying for it so it's going to be interesting to watch I'm a big believer it's a very important breakthrough it's going to be very important early on not so much and really we keep thinking that's the major cost of what we're dealing with the biggest costs we're dealing with are really personal choices by far the whole reason why we're seeing some of these runaway costs are chronic diseases and those chronic diseases are really associated largely with lifestyle choices and I'm not saying that those are easy for people and I'm not saying that this is an easy solution but there is no question that that's way more important than say any dramatic breakthrough on an individual cancer or something else and there was a big study that came out of the Dartmouth Center for Health Policy which has kind of in many ways been the guru of this area and I told the residents so they can't answer this question but they did a complete analysis and far and away if you wanted to have a bang for the buck for the health care cost the best investment you could make was in education increasing the number of people who graduated from high school and college for dollars spent was far and away the best thing you could do to decrease the cost of health care in this country because there is a dramatic correlation everything else being equal depending on how much education your overall health care costs are amazingly so so high school graduates dramatically less overall net expense college graduates much less than just high school graduates so personal education being involved in your own health care is way way bigger than anything else we're dealing with in regards to our overall cost today so I see some people are leaving let's just see if we can tackle a couple more questions and then we'll call it a day how to maintain clinical efficiency and cost containment in the face of ever more burdensome rules and regulations rules and regulations there is no question the bureaucracy part of this is becoming a pretty big burden as we move forward there was a lot of hope that electronic medical record would help in some of this so that more and easier access to it the net early result in regards to electronic medical records as it's being analyzed reviewed is that it's actually adding expense to the overall health care system so that certainly isn't helping those who have gone concierge say they love the fact that they avoided all that insurance stuff and all the battles with different agencies so there is no question that I think there's going to finally get to a point where there is a significant pushback about some of this incredible regulatory burden if you add all of the overall costs we have in health care how much is going to filling out paperwork on our side and how much is going to filling out paperwork on the insurance side I've seen figures net of all of that it could be as much as the 20% of the health care bill just involved in that process that's pretty ridiculous that it turns out to be about the same as what all physicians are paid in the country is about 20% of the health care bill I don't think anything we have now is forcing people to close their doors I think people are closing their doors and concerned that that's going to happen and the big change that we see happening is that hospitals are buying practices and so a lot of people are joining that tsunami because they see a chance to make money on their practices they don't think that they'll be able to sell their practices in the future and that because of accountable care organizations they want to be aligned and so that trend is huge and it's not just hospitals that are doing it insurance companies are starting to do it they want to get vertically integrated to be able to survive so you've got this amazing trend that's happening the main people that they're taking on are primary care and so not necessarily so much the other areas I think anybody who is running a really lean efficient organization paying tremendous attention to patient satisfaction and making sure their quality measures I mean I think it's going to get so transparent that everybody's capsule to breakage rating cataract servers are going to be sitting out on the internet I see that day coming your end up minus rates they're going to be out there they're going to be posted and so they just need to understand that those things I think are going to get evident and are going to be clear and people are going to know about it I think those that are doing well will do just fine and a little bit anybody making a move now based on paranoia assuming what's going to happen I don't think anybody knows exactly where this is going so I recommend when people ask me don't panic you got to focus but the things to focus on are your quality and your efficiency you want to look to see what you're doing that makes sense and in particular you want to start thinking about things that have been profit centers that are going to become cost centers in short order and I don't think it's going to be very long to every time you think about the fact that you want to do an OCT of the nerve fiber layer that's going to be additional amounts you can build I think some of those kinds of things are clearly going to get bundled so imaging huge focus on that one of trying to get that under control because that's been expanding at the rate of about 25% per year in cost and that's why the radiologists just got hammered here recently and they're going to get hammered even harder so I think there's going to be flexibility where maybe there'll be some larger groups that'll try to get together to cover this cost I think that's possible but I think well run efficient private groups are going to do just fine particularly in ophthalmology because for a lot of what we do it turns out that widget pricing is still going to be a good way to go it's going to be hard to come up with a more efficient model like I say the one I follow carefully is Europe and where I see now Germany and particularly Britain and Sweden and Denmark have all gone back to widget pricing and they can show that it was immensely better for them it cost them a lot less money so neck you had your hand up back there the so-called death panel so IPAP is an interesting one turns out organized medicine has really got a target on that trying to get rid of it the administration has aggressively defended it so why is that so important you're going to have a group of people that are so-called technocrats and gurus in the field they will have the right as this moves along to put new policy into place and if Congress does not get together and overwrite it and these days Congress has a hard time making a decision whether somebody's going to go to the bathroom so the odds of their stepping in place and overriding this it has the full rule of law after a period of I think it's just 60 days I think Congress has only 60 days in which they have to formally get together and both houses agree to overwrite it so we've never had a group that's as powerful now those who support this say for the first time we've got a group that can make the kind of changes we need to have those that are against it said we've never had such a small number of people with so much power to make such a change in a system before and that's pretty scary so it'll be fun to see how that moves forward tort reform been talked about for a long period of time with the trial law's association the largest donor the Democratic party I don't see tort reform happening anytime soon next film yes Jean so you raise a good issue but I can tell you that that's being tackled right now in a couple of major systems and some of the biggest case histories of a positive nature have to do with exactly what you talked about right now most of that is not reimbursed and most of those systems that are doing particularly well on that most expensive 10% of the population are not PAs and they're not nurse practitioners and not primary care docs they're dietitians they're counselors people going into the homes aggressive intervention and so I think we'll see more of that at a much lower tech level I'll see the primary care provider is more of a team leader and more and more you're not going to see the primary care necessarily on such a regular basis but there's a whole team out there and a lot of us going into their home and so I think we're going to see interesting changes I see a lot of interesting things in telehealth involved in a lot of this a lot of devices coming along devices that you'll be able to check your intraocular pressure I hear people talking about that check your blood pressure check your glucose so that is probably the most interesting area of medicine in one that's going to see a lot of evolution but I and unless we dramatically change how we're doing it as physicians I see that moving actually kind of a way and it's going to be more lower cost people than even primary any primary care physicians that are going to be running that I'm not saying I encourage you discourage you I just know and there's a Boeing is the perfect example they had a return on investment 101 they did a very low tech solution it was essentially run by a few nurses one and a couple primary care people for their entire employees they went after their most expensive 10% of people that represented about 50% of their costs and they cut their net costs down by about 12% with their turn on investment of 100 to one didn't hire a single individual doctor so a lot of people that that was a study just came out that's got everybody looking at that with their eyes wide state of Vermont did something similar after that and they say they're reporting about the same type of thing so it's going to be interesting to see where all that goes I think we got time for one more question yes Mike I have a question regarding finding the right often times the provider nor the Affordable Care Act doesn't really address that so I think most people who look at it carefully do not feel that the Affordable Care Act is going to do much in bending the cost curve I think that's pretty apparent it has other issues and it's trying to address that one but most people don't see the cost curve really being impacted much by this. Wayne you want to talk a little bit about this is an option it's actually been strongly supported by conservative elements is the idea that you have catastrophic coverage for that huge amount then you have a medical savings plan to cover your core cost and if you could include with that transparency so people could actually put it in a shop for their care that that would force prices down yeah I'm not a health care economist but it makes practical sense that when people have choices and control in life that they can make good educated choices so I think having the transparency knowing what it costs the fear that I would have is if too much is put into the hands of the public and they have too much flexibility with that money then what would they spend that money for you know the evidence based part of this is if you prevent things in advance and invest a lot of that money into preventive care so people had accounts but they could only use the accounts for taking care of problems that already exist versus being able to spend it on preventive measures as well I think that some consideration needs to be given into the preventive measures in a big way but consumer choice that's what makes America great and putting it in the hands of the consumer with transparency and having that safety net for the catastrophic part I think would be a very useful model so I'll just give you a little personal situation why I think that many are concerned how that's going to work and that's how much choice you really have so I had a dentist and I had a tooth who was just killing me and he had an anodontist who I'd gone to before and that anodontist was out so they sent me to a different anodontist now mind you I'm sitting there in the emergency room and this tooth is just about ready to drive me to suicide it's just throbbing away says you need a root canal and the lady walks out and says we don't cover any insurance says you will pay $1,500 right now or we're not going to see you we're not going to take care of this so what kind of choice did I have now I had insurance and I could have had this covered with probably a 10% copay and they said they couldn't find anybody at that particular time so I clopped up the $1,500 and you know and he did the root canal and I was relieved of pain too many times I think the person who's insured under a lot of conditions doesn't have much say I think under those circumstances you know where you think somebody is better you don't have good evidence and they claim that you got to do X, Y and Z is going to cost this so it's not clear and economists argue over this how much free market flexibility you have when you're dealing with healthcare particularly under emergent and painful situation just something to think about so that was the last question I'm glad we've got a lot of questions that are out here that means that you're all thinking about it yeah I saw Al's hand up but just before that I said you can come up and we can talk about it Al if you want to thank you very much thanks for making some time for us it's good to get you in front of the group here