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The Health Care Decision

A panel that discusses the Supreme Court's ruling to uphold the Affordable Care Act. The emphasis is on where do things go from here? The ACA can be broken down into three basic parts: expanding insurance coverage, paying for that expansion through taxes, and bringing down the overall spending on health care.

Speakers: Tyler Cowen, Ezekiel Emanuel, Neera Tanden, David Leonhardt

Festival: 2012

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The Health Care Decision

Aspen Ideas Festival transcripts are created on a rush deadline by a contractor for the Aspen Institute, and the accuracy may vary. This text may be updated or revised in the future. Please be aware that the authoritative record of Aspen Institute programming is the video or audio.

THE ASPEN INSTITUTE

ASPEN IDEAS FESTIVAL 2012

THE HEALTH CARE DECISION

Greenwald Pavilion,

1000 North Third Street,

Aspen, Colorado

Monday, July 2, 2012

Soft Scribe LLC

www.softscribellc.com

(703)373-3171

LIST OF PARTICIPANTS

DAVID LEONHARDT

Washington Bureau Chief, New York Times

NEERA TANDEN

President, Center for American Progress

TYLER COWEN

Professor of Economics, George Mason University

Author of The Great Stagnation and

An Economist Gets Lunch

EZEKIEL EMANUEL

Vice Provost for Global Initiatives and Chair of

Medical Ethics Health Policy Department, University

of Pennsylvania, Columnist for The New York Times.

* * * * *

P R O C E E D I N G S

MR. LEONHARDT: What a great crowd, thank you

all for coming. I'm David Leonhardt, I'm currently the

Washington bureau chief of the New York Times. I'm

formerly an economics writer for the Times and I spend a

lot of the last few years writing about the whole battle

over the health care law. Before that I spend a lot of

time writing about health care before there was a law.

And I'm your moderator this afternoon.

You really have three wonderful folks to talk

about this law. And we're each going to talk very briefly

less than 5 minutes each, I promise. And then we'll have

a short discussion among us. And then we'll open it up to

you all, to your questions and comments from you all.

And I probably don't really need to introduce

the topic. It has been the topic that everyone has been

focusing on, not only this week but much before, which is

the health care law, the state of health care and I think

you'll hear from us we're all really going to emphasis,

where do things go from here?

I'm in fact the only one in my brief opening

remarks who's going to really focus on the past, which is

I'm going to try to give you the shortest summary of the

ACA or Obamacare that has ever been delivered.

MS. TANDEN: And when that works we'll show the

campaign.

(Laughter)

MR. LEONHARDT: So I'd say it has four major

parts. The first major part is it vastly expands

insurance coverage and it does it through two major ways.

About half of the expansion in insurance coverage is the

stuff that's gotten all the attention, it's the mandate.

The law says all Americans who can afford it must have

health insurance. And to help them get it, it sets up

these market places where you can more easily compare and

see health insurance and then it subsidizes anyone of

moderate income. In the medium term that should cover

about 17 million more Americans or about one out of every

three people who would otherwise not have insurance.

The second big part of it is Medicaid. They

take Medicaid, which is now a big complicated mess;

depends on what your income, what your family situation is

and it sets a standard on it. As long as you are, I

think, 133 percent of poverty level or below you qualify

for Medicaid. Big expansion in Medicaid. That is the

second half of coverage expansion. That covers another

one in three people who don't have insurance. That still

leaves one in three people who won't have it, a kind of

mix of -- not one in three overall but in that pie -- a

mix of illegal immigrants and people who do not want to

have insurance. That's part one of the law, expanding

insurance coverage.

Part two of the law is paying for that through

taxes, a combination of taxes on high-income people,

raising their Medicare taxes and also taxing companies.

That's part two of the law.

Part three of the law is over the long term

trying to bring down the spending on health care. And I

think you'll hear Zeke Emanuel talk a lot about this. And

I'll introduce each one of the three of them when -- once

I'm done.

And so the idea with that is that it -- it wants

to -- people want to bend the curve as Peter Orszag and

Zeke and lots of other people often say, which is to say

they want to reduce the growth rate of health care going

forward. And the law tries to do that through a variety

of ways, trying to change incentives in health care,

sometimes trying to just cut spending of overall health

care. That is part -- wait a minute, I've got my numbers

mixed up.

SPEAKER: Part three.

MS. TANDEN: That's right. That's part three.

MR. LEONHARDT: That's part three of the law and

what's part four of the law?

SPEAKER: Well, all the quality stuff, reduce

hospital re-admissions, reduce --

MR. LEONHARDT: Right. Improve the quality of

health care regardless of whether it's financial or not.

So try to have a health care system that not only doesn't

grow at the same speed but also provides better results

because right now we spend more than any country in the

world by far. And we do not have better results than any

country in the world by far; it's a mixed bag, we're

better at some things like some forms of cancer care,

we're worse than others. So that's the law, four parts;

cover more people, pay for it, try to reduce the deficit

over the long term, and try to improve the quality of

health care.

The Supreme Court effectively uphold -- upheld

every single part of that law with one significant

exception the Medicaid expansion. They made that optional

for states. So if you remember I said about half of the

expansion in coverage comes from Medicaid. So if every

state opted out of that expansion, which is an option the

Supreme Court just gave them, the law would only cover

half as many people as it otherwise would have. No one

expects every state to opt out of it. The blue states

will not opt out of it. It remains unclear whether the

red states will; you'll hear all of them talking about

that today.

But basically, what the court said is that

somewhere between 50 percent and 100 percent of the health

care coverage expansion that goes on may continue and

parts two, three and four of the law may all continue.

So that's the Affordable Care Act. You can see

why people would not put it on a bumper sticker.

(Laughter)

MR. LEONHARDT: But there it is. And the

question is, where do we go from here both legally and

otherwise? And to talk about that we have Neera Tanden,

who is the chief executive of the Center for American

Progress, one of the most important research groups in

Washington. It leans left or leans progressive as Neera

might prefer I say.

MS. TANDEN: We go with progressive, if that's

okay.

MR. LEONHARDT: Neera is previously the chief

policy advisor to Hillary Clinton during her campaign.

After that she was the chief domestic policy advisor to

Obama in the general election and she was then a top

advisor to Sebelius in the making of the health care law.

Tyler Cowen is a professor of economics at

George Mason University. He's the author of the extremely

well read, Marginal Revolution blog, co-author of it. He

also is maybe the single best source for good food in

Washington. He writes a blog. If you are ever looking

for a restaurant in Washington just google Tyler Cowen

restaurants and he's the author of a new book, "An

Economist gets Lunch."

And Zeke Emanuel is the former head of bioethics

at NIH, he's a former advisor to Peter Orszag and to the

President at the Budget Office specifically on health

care. And is now a vice provost at the University of

Pennsylvania.

We're going to start with Neera. I've done the

past you guys get to do the future.

MS. TANDEN: Great, so I think I'll talk a

little bit about the decision and what it means.

Essentially, just to summarize for those who have not read

about it recently, the decision says essentially that the

mandate, the issue that got the most attention in the

deliberations is constitutional. Chief Justice Roberts

found that it was unconstitutional -- I mean, it was not

constitutional via the Commerce Clause, which I think it

is fair to say had the most amount of energy around it.

There are two arguments around the Commerce

Clause, whether it's just -- is it necessary and proper --

there is a necessary and proper argument, and just a

straight commerce clause. But under both findings -- we

can talk more about them -- under both findings he found

that it was unconstitutional, it was not -- it did not

pass constitutional muster. However, he found that it was

constitutional under the taxing power of the federal

government, which is interesting in that no lower court

found it constitutional under the taxing power.

And now part of that is because courts that

found in favor of the law found in favor under the

Commerce Clause and therefore didn't reach the taxing

power. There was only one judge, Judge Wynn in the Fourth

Circuit who actually said it was both constitutional under

the Commerce Clause and adjudicated. But that was not the

majority opinion.

So it was quite a day on Thursday to find that

that was indeed the rationale. It was argued by the

solicitor general. It was in the solicitor general's

briefs. But it was not a persuasive argument in the lower

courts. So it was -- that is the argument that it was

found unconstitutional.

Now, on the Medicaid issue, as David said. The

Medicaid expansion was found constitutional but the

authority by which it can be the power of the federal

government under Medicaid was limited. So what that was

really -- what the court said really was that the federal

government cannot use the entire Medicaid program as the

leverage point upon states.

So as we all know Medicaid has existed for 40

years. It provides a subsidy of between 50 to 83 percent

to states to provide coverage for this amalgamation of

people. In some states it's relative -- you know, it's --

I wouldn't describe it as generous but it is more generous

than other states, it's only the exceedingly poor, others

are bringing in more working poor people. But that

essentially said to the federal government that you can't

use the existing Medicaid subsidies to cover it.

So right now states have a Medicaid expansion

before them, which they can choose to expand or not for

the first several years of implementation, it is a 100

percent match. So let me just say that again. For every

dollar the state expends, it receives $100 -- 100 percent

of federal dollars for it. It spends no money in the

first few years. It declines to 90 percent.

Now, what I find interesting about that, and I

will just discuss it for one moment because I would like

everyone else to speak is that, what is interesting about

the Court's -- how it has approached Medicaid it is

seemingly more concerned about a regime that provides a 90

percent -- 100 to a 90 percent match, than it is ever

expressed about a regime that was 50 to 83 percent match,

which I find an interesting and odd outcome of the

litigation. And one of the reasons I believe that judges

are sometimes -- it's hard to adjudicate policy issues in

the courts.

MR. LEONHARDT: Thanks. Thank you.

Tyler?

MR. COWEN: I'll try predictions. Let's say

Obama wins. I think the key to the future is to keep

one's eye on the Medicaid issue. I don't think the

Supreme Court ruling on Medicaid is itself important, I

think the governors, once they stop making noise, will

leap on board.

But the public itself doesn't know how much of

the bill's coverage comes from the Medicaid expansion. So

you hear mandate, mandate, mandate but Medicaid is quite

an unpopular program. And the state governors have

financial incentives over time to want to push people on

to the subsidized exchanges.

So I think we'll see a huge tug of war between

governors at the state level; including Democrats I might

add, who would rather spend money on wealthier and more

influential voters; and the federal level, where there is

an incentive to keep people on Medicaid and away from the

subsidized exchanges in too great a number.

And who wins that tug of war, is to me the key

question, I'm not sure. I think what is probably the best

available outcome is for over time if ACA moves to

something like a means tested voucher system where most

people are buying on the exchanges, Zeke has written on

this, I would favor that. But the problem is the way the

exchanges are set up now that would be too expensive.

There is even a part in the bill that says in year 2018 if

so much is being spend on subsidies through the exchanges

it has to be cut.

So I would like to see it evolve into something

where you have catastrophic coverage on the exchanges and

a mandate which is really extremely modest relative to a

lot of current expectations. And then for cheaper

expenditures have something more like a market competition

system. And I wouldn't quite say that's a prediction.

But that's one path through which the law could evolve

into something quite different.

Now say Romney and the Republicans win and also

take the Senate. That's a harder set of predictions but

my gut feeling is they don't actually want to have to

replace, that's a huge embarrassment for them. They

wouldn't know what to do, there are tax credit plans,

maybe in the abstract they make sense, but you spend more

money to achieve kind of the same result and the fact that

you avoid the "M" word sounds great in a campaign --

mandate, "M" word.

(Laughter)

But it doesn't do them that much good in terms

of doling out benefits to people who actually vote and

support them. So my guess is they'll pick on a bunch of

parts, get rid of them and declare victory. And the key

problem for them is they can't just leave the mandate in

place. There's been so much talk about the "M" word, and

I don't know how they'll get rid of the mandate in words

without getting rid of it in practice. I'm personally not

creative enough to figure out how this will be managed.

But my prediction is they are more creative than I am.

(Laughter)

And if Republicans win everything, we'll end up

with more parts of the law than you might think hearing

the rhetoric today. Anyway, I think my time's up.

MR. LEONHARDT: Thank you.

MR. EMANUEL: So let me say a word to pick up

where Tyler said. If you look at the Medicare situation

going forward it really is perfectly economically rational

for every state to adopt the Medicaid program. Because as

Neera said they get 100 percent in the first three years

and it declines to 90 percent of the costs being borne by

the federal government. So state has very little money

going out. Not only does it have little money for getting

more people on Medicaid it actually is going to save money.

MS. TANDEN: Right.

MR. EMANUEL: Because first every state now has

what's called the cost shift. It buys insurance for its

state workers and buried in that insurance is actually

payment for uninsured people. And so that will go down.

In addition, every state has some program for paying for

the uncompensated care that people who are uninsured have.

That will go down when people have insurance.

So from an economic rationality standpoint, and

actually the Council of Economic Advisers analyzed this in

September '09, it makes perfect sense for every state to

go in and adopt the Medicaid. The only reason I can think

of that they wouldn't is ideological. We don't want to do

it, we don't want to expand, you know, you might think

that Texas or Florida will decide that this is, you know,

more a federal program even if it would make sense for the

state from an economic standpoint. And we've seen a lot

of that sort of behavior, where it's not in their interest

but they do it anyway. All those states would -- who --

which want state control of the exchange and yet haven't

invested a nickel in getting the exchange up and running

are not going to have an -- not going to run their own

exchange come next year when they have to go live.

Let me talk about -- as David said -- you know,

I would say a word about cost control. Cost control is

extremely important whether you are a liberal or a

conservative for the following reason. If we can get

health care costs to go moderate and they have moderated

by the way over the last few years then the cost of the

subsidies go down. The cost of Medicaid goes down. The

cost of Medicare -- not goes down, but stays lower as a

portion of the budget, and for private employers obviously

they also have moderated health care costs.

It is a huge advantage to every sector of the

economy if we can actually moderate the health care cost.

Now, one of my -- I've spent a lot of time working with

Peter Orszag, who's somewhere over here --

MS. TANDEN: Over there.

MR. EMANUEL: -- on the bill and trying to get a

lot of this cost control in the bill. And I'd say that we

got a lot of things but one of my big frustrations is we

did not get enough deadlines on cost control. So there's

deadlines on the mandate, you know, the exchanges open

2014, there's deadline expanding Medicaid, there's lots of

other deadlines, but on the cost control we didn't get as

many deadlines as we should. And that is very important.

Because big health systems need to understand

when things are going to change to schedule their

investment and to see that it's real. I think what you're

going to see going forward is a real focus on this cost

control because of its effect on the budgets and its

effect on private employers.

And if you are very interested from a standpoint

of getting more people insured it's also in your interest.

Because the more the costs go up the more precarious this

whole arrangement is. And so I think, again, whatever

your stripe, liberal or conservative, Democrat or

Republican, going forward, that really has to be a top

priority for you because it's the only way the system is

going to be able to keep stable.

MR. LEONHARDT: Neera, you want to jump in?

MS. TANDEN: Can I just make two following

points, Zeke, first on the Medicaid point. There is a

sort of political economy problem on Medicaid, which is

Zeke is absolutely right that states save a lot of money

from their Medicaid expansion because they are --

essentially, they pay a lot of costs right now for

uncompensated care and they -- and they'll get a lot --

that will all be paid for and 90 percent paid for.

The problem for some states is that the

challenge is that that occurs often at the municipal

level, at the city level. So Florida is a perfect

example. Florida at the local level has a number of

programs. Dade -- Miami Dade County pays $170 million or

something like that for uncompensated care through a tax

it pays at the local level. So Florida, overall, will

save but it's not clear -- entirely clear how much that's -

- Governor Scott will save.

So I would say as a good leader of a state you

should care about both the state level costs and your

municipal costs, but it's not entirely clear that every

governor will think that way. And I think that will be a

friction hopefully some -- I know there's some mayors in

this audience that, you know, mayors will recognize that

they are also bearing the brunt of these costs and they

get a big windfall -- and I hate to use the term windfall

but a big windfall from the Medicaid expansion.

On the issue of costs I am -- I agree with Zeke

on the overall issue of how this is a drain on our economy

and we need to get going on costs. The challenge that we

saw through the polarization of the debate, and you know,

Tyler isn't one of these people. But there were a number

of people, I mean, the truth is that for decades it was

Republicans who were leading on cost control issues. And

there are a number of Republican senators who had been

strong advocates of cost control issues; compared

effectiveness research was an area in which there were

Republican senators who had been farther more -- who had

shown greater leadership on that issue.

The challenge with the debate is that it became

so polarized that those same senators made cost control --

basically they called it rationing and hyper polarized the

debate. And my hope actually is that now that we've gone

through the Supreme Court and we've seen -- you know,

we've had final affirmation around this that hopefully

we'll see some of those Republican leaders come back to

the fold and demonstrate that leadership. I will say they

were -- many of them were better than Democrats on this

issue.

But the -- one of the reasons why we didn't get

stronger cost control in the legislation, and I believe

there is strong cost control in the legislation, but maybe

we didn't get stronger cost control is it's only

Democrats. There was -- arguing within ourselves did not

provide enough leverage points because it would have been

really helpful to have Republicans pushing but they walked

away from the whole bill and were really attacking things

like compared effectiveness research as rationing in a way

that made it difficult to make those decisions not easier.

MR. LEONHARDT: Let's spend just a minute on the

politics because you all I think were sort of predicting

that that -- you used the phrase "final affirmation,"

Tyler, you said that the Republicans, if they find

themselves in office aren't going to repeal everything

they're going to -- they say now.

I guess I want to get you to go into a little

more detail on that, because that's not clear to me right.

The history seems to show that what people campaign on

they do, right. And Mitt Romney is campaigning on

repealing Obamacare. He appeared before a sign that

said, "Repeal Obamacare," the day of the Supreme Court

ruling.

MR. COWEN: Repeal and replace, I think it said.

MR. LEONHARDT: Okay. The House is again going

to repeal Obamacare sometime soon, right, they're going to

vote again. So I guess I don't -- let's imagine a world

with a Romney presidency, a Republican House, and a slight

Republican majority in the Senate, which I think if you're

imagining a world with a Romney presidency is probably

most likely, it's certainly entirely plausible. How in

that world does a world in which they don't deliver on the

promises that they made, right, in which the Republicans

come out and they repeal through reconciliation. They

would need only 51 votes through the budget. They get rid

of the Medicaid expansion, they get rid of the subsidies,

and then you're left with the sort of little insurance

market reforms like about 24 year olds being able to stay

on their parent's insurance. How does that --

MR. EMANUEL: Well, first of all it's always a

lot easier to take a symbolic vote that has no

significance and you know will die like the House taking

this vote on repealing. I think that they're not going to

be able to do -- I think Tyler is right, they're going to

do something, they're going to call it repeal but it's not

going to be full repeal because first, there is this

budget problem. That is the health bill actually saves

money over the decade and they're going to -- they would

have to find money to fill that hole and they can't find

that money.

Second, it puts them in the pickle of the

replaced part of it, because a lot of the bill is popular

like the insurance reforms and the keeping kids on until

26 and many other things. And you're going to have to

then have a full set of policies and the Republicans don't

have a policy. We learned all through the debate that

they have lots of things that they would argue about but

it was never a policy. It was never a whole thing that

addressed the problems of access, cost and quality.

The last point I would make is, Romney is going

to need cost control just like everyone else for budgetary

reasons. And I don't think he can throw out the whole

bill because of that. He's going to have to have a

mechanism to keep health care costs down because he's

going to have to get the budget into some more reasonable

balance. And health care; as you know, because you've

written many, many articles on it; is the long-term threat

to the federal budget and it's even a medium-term threat

to the federal budget.

So I just don't see -- I mean, I think Tyler is

right. They'll do something, it will be relatively

modest, they'll call it repeal, but most of the bill is

going to proceed.

MR. LEONHARDT: Tyler.

MR. COWEN: This is what I think they'll do.

They'll take a big axe to the Medicaid sections of the

bill because people who receive Medicaid are not in

general supporters of Republicans. And here's another way

to think about Romney's problem. He wants to get

reelected. You can either govern through --

MR. EMANUEL: He hasn't ever been elected.

(Laughter)

MR. COWEN: Once he gets elected, if he does.

MS. TANDEN: We're living in the theory.

MR. COWEN: If Romney simply governs through

what some people would call the extreme right, he won't be

reelected. It's not that popular a stance. So one

possible strategy for Romney is in the euphoria of having

defeated Obama, if this happens, to immediately do

something to deeply alienate the hard right, establish

popularity with centrist voters, and then slowly over time

as reelection approaches move back towards the right as

campaign contributions matter again.

(Laughter)

MS. TANDEN: Wow.

MR. COWEN: And if you think you're Romney, how

are you actually going to do this. Are you simply going

to take every decision the way that most Republican

members of the House would want you to? I don't think

he's going to do that. There is nothing in his past

record which suggests that and there needs to be some

break, you might as well do a break where you in your own

terms get something for it. So that's my prediction.

MS. TANDEN: So you know the one thing I would

say about this is that I think we should take a lesson

from the recent past, which is every Republican campaign

on repeal and replace, it was the number one issue that

they argued in 2010. You know, but the truth is that the

Republican, House Republicans had two anvils with the Bush

-- with the Obama administration. You know, they had the

government shutdown and they had the debt limit

negotiation.

In both cases they could have used their -- I

mean they had a number of issues. It wasn't just one

issue versus another, but if it was the number one

motivating issue for them they could have used the

government shutdown as an anvil on repeal and replace or

repeal. And the truth is that what was the last issue

been debated. It was actually Planned Parenthood. So it

was not actually Obamacare at the end.

Now, in the debt limit deal there was an issue

about the mandate, et cetera, percolating in last, but it

was actually not repealed. That was I mean they made a

decision, it's always a decision. They made a decision

between -- as between revenues and Obamacare. And that

was probably a rational decision for them, but they did

choose another issue over Obamacare.

And I think -- and I would say just the issue

for Romney is that he is the architect of Obamacare. So

it is a complicated --

(Laughter)

MR. EMANUEL: At least a consultant.

(Laughter)

MS. TANDEN: -- where the world -- it's a

complicated world we live in when he would be the person

to undo it. And what he honestly feels about that about

Obamacare, I mean I'm not trying to be negative. I just

don't really know because a lot of people in Massachusetts

I mean Zeke and I both stayed in Massachusetts, he was

very proud of it.

I mean and people around him argued that he knew

this issue inside and out, in fact, I would say the best

defender of the individual mandate in public life in the

last 5 years has been Mitt Romney. I mean, he's argued it

more effectively than any Democrat. So how that actually

plays out, I can't really determine.

MR. LEONHARDT: He even did it in one of the

Republican debates actually.

MS. TANDEN: In one of the debates recently, it

wasn't like 7 years ago or 5 years ago. It was like

during the last 2 years.

MR. LEONHARDT: Zeke is fan of bets, so I'm

going to -- after this panel, I'm going to design a bet on

the idea of if Romney wins what happens to the bill and

Tyler is going to pick the restaurant.

MS. TANDEN: Zeke only likes bets that he

organizes so he can win, it's not really --

(Laughter)

MR. LEONHARDT: Let's talk for a minute about

the health care system, right. So we had a story on the

front page of the New York Times, a couple of months back.

Looking at the fact that health care cost growth has

already slowed, right. And the article said this is not

mainly because of the bill. The bill appears to play some

modest role as people are trying to organize the health

care system to get ready for the bill.

It's mainly because of the recession; people go

without health care in the recession, the same way they go

without fancy dinners, and the same way they go without

lots of things. But a fair number of experts also think

the health care system itself is beginning to change.

It's beginning to reform itself.

Again not mainly because of the bill yet,

although the bill appears to be playing a positive role

there and there is some debate among health care experts

on this. More optimistic ones think yes, we're already

starting to see -- to use the term of art -- the curve

bend. We're already starting to see a reduction in the

growth of health care costs because people are making

different decisions and more pessimistic ones say no, it's

all the recession.

And when the economy comes back the curve will

unbend right back. I know, Neera, that you are a slightly

more pessimistic about it, right, because we talked about

it.

MS. TANDEN: No, no I'm just -- I'm not -- I'm

just -- I wouldn't be wildly optimistic about what has

happened so far.

MR. LEONHARDT: Yes.

MS. TANDEN: I'm more optimistic about what will

happen in the future on this issue.

MR. LEONHARDT: But so far you don't think

people are changing their behavior, doctors, patients,

hospitals.

MS. TANDEN: No, no, no. I think people are

changing their behavior. I just don't think that we've

been able to -- I don't -- I think most of it is

attributed to the recession, but you know, I think we're

seeing some -- my concern in that article was that it was

just a tad more optimistic than I think we should be as of

this point. I do think that we are seeing -- we're seeing

some movement and positive movement.

And we're seeing that every day and in different

systems. There are -- the big challenges we have really

costly systems that continue and we need to continue to

push that envelope. I just want to emphasize one thing, I

mean, we've had lots of discussions about competitiveness

and American competitiveness over, you know, over the next

several decades.

Zeke is absolutely right. The reason why this

is so critical is that employment in the U.S. is

constrained by health care costs. And it is a continual

drag, and I'd say to put my -- put another pat on this.

You know, if health care costs are constrained, if we can

realign these issues some of the budget wars we've had

between the Ryan budget, whole descriptions of what we

need to do to Medicare as a program.

You know, the most livewire issues will actually

be completely mitigated because if we're actually able to

get Medicare costs under -- or health care costs under

control that will also lower Medicare costs and that will,

you know, that would make the kinds of things that

Republicans and Democrats have argued about, you know, on

the right of voucherizing Medicare in 2020 to -- past 2020

or whatever term we'd like to use, that would make this

unnecessary.

So I do think the real ballgame actually is not

in the mandate or the Medicaid expansion, as policymakers,

the real ballgame is in our ability to lower health care

costs over the next several decades really and use the

Affordable Care Act as it should have been used, as a

leverage point to push this reforms to speed along even

faster.

MR. LEONHARDT: Tyler, you recently wrote a book

about sort of stagnation writ large in the American

economy and society, so I guess the question is how

optimistic are you that we'll escape stagnation in health

care?

MR. COWEN: Here's my pessimistic optimism on

health care.

(Laughter)

I think the economy has recovered. We just

haven't recognized it yet. We haven't faced up to the

fact that this is what recovery looks like and it's not

entirely pretty.

MS. TANDEN: That's pessimistic, right.

MR. COWEN: That's pessimistic, but here's the

quasi-optimistic side of that. If that's your view then

you're very likely to believe we have somewhat broken the

health care cost curve, and that the revenue projections

and budgets still remain overly optimistic, but I actually

tend to think we have seen a turning point and it will

stay with us.

And at some point when we get a much higher rate

of what I call total factor productivity growth and a lot

more innovation then we'll be a lot wealthier and have

broken the health care cost curve. So a 20-year time

horizon, I'm multiply optimistic, but on the health care

cost curve alone I'm optimistic right now, but only for

bad reasons.

(Laughter)

MR. EMANUEL: So first of all, I do think that

the recession has had a big impact. I don't think it's

had 100 percent of -- it's 100 percent explanation. I

mean health care cost growth has gone from 7, 8, 9 percent

MS. TANDEN: Yeah.

MR. EMANUEL: -- down to under 4 percent this

past few years. The problem for all of us is 2 years is

just too short to know whether this is a real structural

change or whether this is just a temporary change out of

the recession. The reason I think it's structural and

going forward over the next decade will be structural is

when you go out to hospitals and health systems compared

to what happened in the 1990s, everybody is figuring out

how to do better.

First, everyone is installing electronic health

records which alone won't change, but that combined with

lots of other stuff will make a big change. Second,

they're all working because of the law reducing the

hospital acquired infections, their error rates and lots

of other things that are going to save money. They are

all working to reduce their readmissions because of the

law. They are all anticipating change in payment formulas

and the need to bring their cost structure down. So

they're all figuring out how do we reengineer delivery --

and I could go on and on.

All of those things take time, but over the

course of the next 3 to 5 to 10 years -- so my time

horizon is by 2020, we're going to have a transformed

health care system, where we're going to be delivering

care in different ways. And we're going to structurally

be saving a lot more money over time. And then as Tyler

says we're going to be richer and then, you know, we can

tolerate a little more health care inflation.

And let me say those transformations out there,

they are all going to benefit you. And I know many people

who are well off don't think Obamacare has anything to do

with them and let me say they are wrong. First of all,

all of you are going to have an electronic health record

as a result of this bill by 2020 guaranteed. And it's

going to be interoperable, you'll go to the Aspen Hospital

or your hospital in New York or LA or wherever.

Second, all of you are going to go to safer

hospitals that are going to have less infections and less

errors. And so that you can be a lot sure of the care

you're getting. Third, you're all going to have a

situation where doctors are better at focusing on chronic

illness and better focusing on how to take care of

patients who actually are sick and do a lot more

coordinated care.

All of those are pretty much guaranteed and I

could go on and on, but I think you -- I know you don't

think Obamacare has anything to do with you, but actually

you're going to be big beneficiaries of the bill.

MR. LEONHARDT: It reminds me of a story that

Bob Wachter who is a doctor and an administrator,

University of California, San Francisco told me, he said

when they first started think about error rates around

their cardiac care they went into it with the assumption

of well, we don't have a problem with that. We're UCSF,

we're great. And they looked at it and they had a pretty

big problem with it.

They were UCSF, they win Nobel prizes, they do

ground breaking research, they weren't actually that good

at getting someone who was having a heart attack from the

door to error-free care to -- in the cathlab. And so -- I

mean, it's really fascinating how much quality improvement

there is to be had in this country at all levels.

MS. TANDEN: Right. The one thing I would --

just to bring this back to the court case, you know, we

spent about 5 minutes maybe 10 even talking about what we

think is a central element to the bill, which is lowering

health care costs. I would say something that I was

relatively shocked by with the court case was that the

Supreme Court had four justices who were ruling to throw

out the entire bill because of the Medicaid expansion and

the individual mandate, which we could argue about whether

the entire exchanges are operable based on the individual

mandate or not.

Someone argue -- I mean, its important part, but

you can still have exchanges, but they were willing to

throw out all the work that is in the legislation around

health care costs and they didn't even address it. I mean

they didn't even talk about it in the legislation -- in

the court opinion, they talked about the employer mandate,

they talked about the exchanges, they talked about the

Medicaid expansion and the individual mandate, they didn't

even address that, would -- be willing to throw it all out.

And what I thought from that was it's just, you

know, it was really scary that and one another reason why

I think a lot of policy makers were so concerned that this

issue that should have really been resolved in the --

among policy makers was being litigated by the courts who

are making law not policy.

MR. LEONHARDT: Does it change your --

Department of Health care for 60 seconds -- does it change

your estimation of what happened on some of the other big

issues before the court. Do you now think it's more

unlikely the court gets rid of affirmative action next

year?

MS. TANDEN: Well, you know, obviously there are

a lot of people who think that Justice Roberts was giving

himself a lot of leeway. I mean, you know, I'm -- there

is now leaking out of the Supreme Court so -- which I may,

you know, I went to law school and we worked on the amicus

brief. So I'm shocked that there are conservative --

parts of the conservative wing are now leaking to

reporters about it.

But I'm going to continue to believe, perhaps

falsely, that they will adjudicate law and make decisions

based on interpretations of the Constitution rather than

the politically expedient role.

MR. EMANUEL: Well, I'm not a lawyer, I did

teach at a law school for one semester --

(Laughter)

MR. EMANUEL: -- which gives me authority to

render this stupid opinion. But one of the things you --

I think you saw in the immigration case and in the ACA is

what I'll term -- it's not a great term -- a sort

of "Solomonic approach." So what you got in the decision

on health care reform by Roberts was, you know, on the

Commerce Clause the conservatives are right. On the

Medicaid the conservatives are right and --

MS. TANDEN: Sort of.

MR. EMANUEL: -- then you have -- but the bill

is upheld for the following reason. And I think you got

the so -- the conservatives get some of this and then the,

but the thrust of the bill goes to the President. And the

immigration bill you got pretty much the same thing, you

know, this -- so they'd stop and ask for papers. That

will uphold the rest of it; we're going to affirm federal

control over this area. Again they're sort of trying to

cut the loaf halfway.

But I do think, you know, Roberts clearly is

worried about his legacy, and I think the reason he didn't

want to overturn the law was his court would have looked

like the most politicized court since the Dred Scott

decision. But I think one should not think that his

decision was not politicized.

I think it's heavily politicized; notice it does

restrict the use of the Commerce Clause going forward. It

does restrict how the federal government can incentivize

states to do certain things. And as Neera said, it does

immunize him to some degree going forward as not being the

conservative political judge. So I think it was a very

well-crafted crafty decision.

MR. LEONHARDT: There is not much tort reform in

the bill, right. And that's one of the main -- it's one

of the main complaints. How much, Tyler, could tort

reform help?

MR. COWEN: One percent. Now 1 percent is a

lot, no one should laugh at 1 percent, and I am all for

doing that, but I think it's often overrated, and I think

we'll see it in some form or another within 10 years so -

-. But there's a lot of medical mistakes and I'm not sure

malpractice suits discourage them, but it's not as if

everything is fine and dandy, and is just a lot of, you

know, cry baby patients. Malpractice reform is very

tricky. It's very hard to get right and a lot of people I

think would actually regret it when we end up doing it so.

MR. LEONHARDT: Because there is less

accountability for doctors and hospitals.

MR. COWEN: That's right. I would support it,

but very cautiously, and I would not want to oversell it.

MR. EMANUEL: So let me make two points about

that since I was very active for malpractice reform in the

bill. The first is make no mistake about it, the

President was for malpractice reform. He really wanted

malpractice reform. Prior to running for election he

actually wrote an article in the New England Journal of

Medicine for malpractice --

MS. TANDEN: Yes, with Hillary Clinton.

MR. EMANUEL: -- with Hillary Clinton. For

malpractice reform. He has made clear he's not for

malpractice reform that simply puts a cap on how much you

can sue for. And I think the main reason to do

malpractice reform has nothing to do with the money,

nothing to do with the money. I think Tyler was being a

little generous on the 1 percent. It might be half a

percent, it might be zero percent. It's small money, its

chicken feed as far as cost control.

What it's really important for doctor's

psychological state, because when I go out, and I go to

medical schools, and I go to hospitals and I talk about

health care reform invariably one of the first two

questions is why isn't there any malpractice reform.

Doctors have three or two good excuses before they begin

to focus on what they can do to improve the system.

The first is malpractice. I got to do x, y, and

z that raise the cost or -- because of malpractice. And

the second is those patients, they demand everything.

They want the robot; they want the latest and greatest.

You've got to get rid of those psychological crutches for

doctors to focus on the real thing which is how do they

reengineer care to make it safer, better and higher

quality.

MR. COWEN: I sometimes worry that a lot of our

health care problem is cultural. It's that -- it's not

even so much doctors, it's not even so much incentives in

the system. It's that we're Americans and our instinct is

do more, try everything, never give up, do the latest, do

the greatest, do the most and that that cultural instinct

has enormous benefits, right, enormous benefits. When it

comes to having a cost effective health care system, it's

not so great. Do you buy that at all?

MR. LEONHARDT: It's all true.

(Laughter)

MR. LEONHARDT: It's why we will always spend

more than almost any other country per capita that will

never change.

MS. TANDEN: I know, but I think the issue here

is, is the recession actually impacting this as well,

right? And I mean the question is do -- and it's not

going to be true for everyone, people who can afford it

are always going to ask for more and push for more, that

you're seeing in a wide variety of arenas, people are

recognizing that we live in a time of constraint.

One of the reasons why we have lower costs is

because people are consuming a lot less themselves.

Perhaps there will be some, you know, perhaps there will

be some cultural shifts and also one of the -- another

tragedy of the bill is one of the areas we have a lot of

costs are in end-of-life issues. Those issues were

heavily politicized. Zeke could talk about that since he

was I think "Dr. Death Panel", but you know, there are no

death panels, et cetera. And so I think that's also an

issue where hopefully we can have those conversations

culturally and change things culturally before the

windstorm starts.

(Laughter)

MR. EMANUEL: David, I think one shouldn't put

culture in one category and incentives in a separate

category.

MS. TANDEN: Yeah.

MR. EMANUEL: They intersect and some incentives

reinforce the culture and some incentives undermine this

culture of always more, more and more. And I think we can

get -- create a set of incentives that actually look for

higher value care that is better quality care at lower

prices that will change the culture. There is no reason

we can't get better technologies that are actually cost

savings in health care the way we have in many other

industries.

The problem is there is no incentive to do it

now. Under the future situation where we're paying

doctors and hospitals differently you will have an

incentive to do things that actually can reduce cost but

give you great technology or better than technology,

better medical care at a reduced rate. It's not like

every technology, as I wrote for your paper, is

necessarily better.

We have a lot of technologies which people think

are the latest and greatest and they may be the latest and

greatest technology, but don't add anything to your

quality of your health care. You know the da Vinci robot

for any man about to get prostate surgery, you know, four

armed robot, every hospital advertises it as the latest

and greatest technology. There is no evidence it's better

and there's some evidence it's worse. You know, so yeah

it's great -- it's technology, but it's not such great

technology that it's a real advance.

MR. COWEN: And there is some of this work by

the -- is it -- it's a group in Boston where they're

giving people more information, the idea. There have been

some of these studies where when you really lay out in

detail to people --

MR. EMANUEL: The shared decision making model .

MR. COWEN: Shared decision making, thank you.

MS. TANDEN: Yeah.

MR. COWEN: -- lay out in detail to people the

sort of risks and the benefits and the side effects you

see people choosing less intensive --

MS. TANDEN: Yeah, making --

MR. EMANUEL: So what ends up happening is

almost there are scores of studies like this and they

almost all show the same thing. Give the people

information, 10 to 20 percent of them will say, no, I

don't want that procedure, whether it's a prostrate

procedure or a knee replacement or something else.

And the bill actually has a sleeper clause about

shared decision making, which hasn't been implemented by

the government to try to incentivize us because we knew

there was data and we thought that they were really

important if you made every doctor before he or she did a

surgery or some other procedure actually give to the

patients, you will get 10 or 20 percent of people saying

no, not for me.

MR. LEONHARDT: Let's move to some questions.

We have a couple of microphones circulating, is that right?

What do we have, okay? Let's start right here in the

middle and do we have a second microphone? Okay, great,

so go ahead, why don't you pick someone over there and

right in here.

SPEAKER: Hi, my question -- first of all, I

think it's a false argument to hope that Romney is joking

when he says he's going to repeal the health care bill.

The Republicans, when they say things they're pretty

serious about it. How do we convince people like this

crowd or my friends at home that they need the health care

bill and it is good for them even though they -- even

though they have insurance that it is good for them and

their children?

MR. EMANUEL: So let me. I gave you several

things that was going to be better for them if the bill

gets passed. The electronic health record, say for

hospitals higher quality care. Here's -- I mean there

are kids the -- keeping them on their plan till 26, which

is now part of the bill, and you know, while many

insurance companies have said they'll keep it who knows

how long they would keep it. But also that security that

you have a mechanism, separate from your employer to get

coverage at a reasonable rate in the exchange, I think, is

a really important guarantee whatever your pre-existing

condition.

Let me tell you an interesting fact that most

people don't know; 10 percent of the uninsured make over

400 percent of the federal poverty line. They are well

off and could buy insurance. And yet they don't seem to

have it. Most of those people it's not because they don't

want insurance. It's because they or someone in their

family has a preexisting condition and they can't get it

at any price. This solves that problem for them.

MS. TANDEN: And you know, I would also say

there are a number of ways in which the law also

emphasizes preventive benefits, preventive benefits in

Medicare, the preventive benefits that you get just in the

regular health care system that doctors have to provide

you. And there is a prevention trust fund that is a

little bit vulnerable to attack. But there is, basically,

you know, we do have a broad problem in our system which

we've referenced a little bit. But we have an acute care

system, not a health care system. We basically pay for

every time you are sick. We don't pay for keeping people

well.

There are a number of ways that you try to --

the bill incentivizes keeping people healthy. Both in the

-- reimbursements increase for preventive benefits in

Medicare. And there are also ways in which it's trying to

get information out to doctors about what the best

prevention methods are. So that's another way in which --

the bill does try to actually improve the entire health

care system by ensuring that it moves away from the acute

care model.

MR. LEONHARDT: Isn't there some instant polling

that shows the bill is already more popular?

MS. TANDEN: Yes. Yeah, also and Obama's

numbers have flipped. But just temporary.

MR. LEONHARDT: Sir.

SPEAKER: Can you comment on -- can you comment

on the potential impact on medical education? I have a

friend who is a dean of a medical school and says, we are

still teaching doctors as if from 1900 -- from textbooks

from 1900. Right?

MR. EMANUEL: Yeah. Well, I have been convinced

in my life that nothing moves more slowly than medical

education.

MS. TANDEN: Yes.

MR. EMANUEL: And it is true that most medical

schools have not adapted -- I wrote recently an editorial

in one of the medical magazines that we should cut medical

training by 30 percent. We could get rid of tons of

medical school education and not harm the quality of the

doctors we are producing. A lot of it is completely

unnecessary. It's anachronistic and even worse, in my

opinion, there are lots of things necessary for them to

understand about the financing of medicine, about how you

measure quality, how you can reengineer for quality that

aren't being taught. I think there's going to become

increasing pressure on medical schools, as the decade goes

on, to really make a big break and to really do something

innovative and novel. And Lord knows -- I think they are

going to have to do it.

There are also some financial pressures that are

likely to come to bear on them for not the medical school

training, but the training afterwards because that's

likely to be cut in the next few years. And that will

focus the mind.

MS. TANDEN: One thing I -- one issue on this is

-- and this is a broader trend that -- it's not just for

medical school but medical school is kind of the crucible

by which you can see it, which is, you know, the entire

manner in which people are taught in medical school really

is for the idea of a solo practitioner making all

decisions by themselves.

And as we see technology permeate other areas

and other parts of the economy what we are seeing is --

one of the reasons we are hopeful about progress is that

what is making, and actually getting better value out of

the system, the health care system, is that team based

approaches to medicine are incredibly effective. They

produce value and they make doctors actually happier. So

one of the -- that's -- that needs to permeate medical

education. They need to change the culture, as David was

referencing.

But also, I think one of the ways that that

happen is that doctors actually like to be in these

approaches. They like to -- they like salary, over being

a solo practitioner. There are ways the culture is

changing in a way that they like and they are going to

have to have a feedback loop to their schools when they

are alumni to actually shift that. And I think that is a -

- that will happen. It would be great if medical schools

would adapt early instead of be dragged to it, but that is

an area that's important.

MR. LEONHARDT: It's interesting to look at and

let me see some hands again.

SPEAKER: We have Dokine Peter (phonetic).

MR. LEONHARDT: Go over here for one and then we

will come up here for number two. It's interesting when

you think about how health care is changing a lot of this

data collection --

MS. TANDEN: Yeah.

MR. LEONHARDT: Patients don't use at all.

MS. TANDEN: Yeah. This is a huge issue.

MR. LEONHARDT: The way in which it matters is

doctors use it. Doctors hate the idea. Wait a second, my

hospital's ranked seventh in error rates even if patients

aren't actually going to checking and choosing based on it.

MS. TANDEN: And just quickly on that. I mean

electronic medical records are great but the way they

increase value is they actually can provide you more up to

minute information about what's wrong with you and what

the best way to care for you is which really informs

hopefully consumers but mostly doctors in what to do about

it.

MR. LEONHARDT: Guest questioner of Peter Orszag.

(Laughter)

MR. ORSZAG: Thank you. Actually before I ask

my question, just quickly, one of the things from one of

the panels yesterday -- Betsy Nabel who runs Brigham and

Women's in Massachusetts, indication of the changes that

are occurring when asked what share of payments do you --

in your strategic planning, in your internal planning,

what share of payments within the next 3 years do you

think will not be fee-for-service, which is at the heart

of the change.

MS. TANDEN: Yeah, the challenge.

MR. ORSZAG: She said 100 percent. Within 3

years they are assuming all of their payments are some

sort of risk payment to the extent that that is being

replicated at hospitals across the country, a huge deal.

MS. TANDEN: Yes. And Massachusetts is very

expensive.

MR. ORSZAG: Now my question. In this -- let's

speculate about what will happen if a Romney victory and

then a Republican sweep. Because it strikes me, you can't

analyze what will happen in a repeal scenario in

reconciliation without taking into account other things

that will have to happen in reconciliation. And I

suspect, this is a just a guess, but I suspect the most

attractive thing that will be part -- for those newly

elected Republicans is block granting Medicaid.

They have to do something big. Block granting

Medicaid is big. You can do it in a way in which you put

upfront payments at a higher rate to start with and then

you flat line them so that it looks great for the federal

government, and governors will, facing a $50 billion

aggregate deficit at the state level, perhaps find that

attractive.

So the question is how do you evaluate -- that's

a -- all the -- the Supreme Court decision then becomes

kind of irrelevant because Medicaid is fundamentally

different, at least along that dimension. Could you

evaluate whether you think I'm crazy? Well, at least

along this dimension. And secondly, if that is the -- if

that is actually, ultimately done what impact it has.

MR. LEONHARDT: Tyler, you go for that.

MR. COWEN: This is exactly what I think will

happen and furthermore if Romney does not win, I think,

there's a very good chance it will happen over the next 10

years anyway under the U.S. system of government. So I

think the political tendency is that all people win all

battles. And as budgets get tighter, funds will be

reallocated from Medicaid to Medicare often in ways which

are not value enhancing. And my 5-word theory of American

politics like all people always win is a pretty good

theory.

MS. TANDEN: Well, I mean --

MR. COWEN: And I wouldn't focus too much on

Romney though I think that is what exactly what they would

do.

MS. TANDEN: But as you know, the challenge with

Medicaid is that the biggest growth in Medicaid -- what

costs the most in Medicaid is long term care for seniors.

So, you know, the challenge that exists in Medicaid is

that when -- actually, you know, when people realize that

the only thing that helps them deal with those long term

care services comes through Medicaid not thorough

Medicare, especially --

MR. COWEN: That's because (inaudible).

MS. TANDEN: Yeah, I mean it's possible. I

guess, you know, that would be an interesting world we

live in in which we kept the Affordable Care Act and

denied for middle income Americans, working Americans --

and denied coverage to poor children, pregnant mothers,

some families -- I mean, I guess we could live in that

world, but it would be a hard world to live in.

MR. EMANUEL: I think Peter, though, you know,

if that eventuality comes to pass and those of us who

really care about people getting coverage and not wanting

to see states take the block grant and then screw their

population, their poor population especially, what you

would have to focus on is what are the metrics that they

would have to comply with to continue on the program and

what quality and access metrics.

So I think Democrats will need a strategy for

that approach. And I agree -- I mean I think the one

thing which is sort of worrisome about that is fiscally

for the federal government, it will look great. But it

transfers the risk down to the states. And I think, you

know, we are going to see a lot more states either tether

on insolvency or actually go belly up and it will make

Stockton (phonetic) look like a, you know, just a small

end of the wedge.

SPEAKER: Well, first of all, with respect to

Justice Roberts, I think it's worth noting that I don't

think Justice Roberts really bought the taxing clause

argument. I think he was actually extremely conservative

in his opinion. And he was simply trying to exercise

judicial restraint and transfer the power to pass this

kind of legislation to the Congress and he hung his coat

on it.

Moving on to the -- to the -- and he quotes

Justice Holmes I think in the opinion to that effect.

SPEAKER: Yeah.

MS. TANDEN: Yeah.

SPEAKER: I am surprised that we are celebrating

a decrease in the rate of increase in medical cost. In

other words, I think it was said that the rate of increase

in medical cost is down to 4 percent, but we have a 1.9

percent GDP which means that medical cost is still

increasing faster than GDP.

And my question is where do you think we get to

in 10 years time, medical costs as a percentage of GDP,

and how do we get to a 11 or 12 percent like some of our

neighbors are so that we can be competitive.

MR. LEONHARDT: I'm actually going to take a

very quick crack at that --

MS. TANDEN: Okay.

MR. LEONHARDT: Just philosophically, I think

it's important to keep in mind, and you didn't say

otherwise but it's important to keep in mind, health care

growing as a sector of the economy over time is not only

okay, it is good. Think about a rich society, right?

Think about a rich household. You have got two cars. You

have got four TVs. You have got a VCR and then you got an

extra $100. What do you want o spend it on? Do you want

to buy another VCR or do you want to spend it on your

health? Right. And that is why over time for rich

societies health care grows as a share of GDP and it's

natural for it to grow as GDP, right?

MS. TANDEN: (Inaudible).

MR. LEONHARDT: But now to your question which

is how high do we get and can we ever get -- I mean we are

so much higher than any other society.

MR. COWEN: Steady state 40 percent will love

it. The other stuff doesn't make me happier. And someday

the stuff will actually start to work. I mean that's the

miracle.

MR. EMANUEL: So -- 40 percent I'm not sure

where someday is.

MR. LEONHARDT: Where are we now, 17?

MR. EMANUEL: Eighteen.

MR. LEONHARDT: And other rich countries are at

12?

MS. TANDEN: Right. The most --

MR. EMANUEL: So, when we talk about cost

control, sometimes I slip and say cost savings. But it's

not -- we are not going down. We are not going from $2.8

trillion dollars, which is what we will spend in 2012 down

to $2 trillion. The question is how slow does it go up to

$3.5 trillion and $4 trillion. And that is a very

important number because as the GDP grows, as David said,

we are going to spend more. There's very good correlation

across all rich countries that that happens. But the

issue is how slow can we get it.

For a brief shining 5-year period, 1993 to 1998,

we actually got relatively steady state keeping it about

18 percent. My guess, and this is just pretty crude -- we

will get to 20, probably 22 percent over 10, 12 years.

And then, you know, I think we will probably flatten it

out. Assuming we get, and Peter prefaced what he said,

assuming we get consistent changes in payment by the end

of the decade.

MS. TANDEN: Can I just reference the Roberts --

and you know, what I thought was fascinating about the

Robert's opinion writ large is that, you know, on the

Commerce Clause where we have, you know, a lot of

jurisprudence that essentially argues that since the New

Deal, the Supreme Court is not going to second guess large

scale economic decisions by the Congress.

You know, there is like no judicial deference to

Congress in the Commerce Clause jurisprudence. I mean you

read through the case; his attitude towards Congressional

action is one of -- I wouldn't -- contempt is too strong a

language, but it is with deep skepticism -- a skepticism

that I would argue no majority opinion has had towards --

against anything that touches economic activity in 30 --

in 100 years or close to 100 years.

So and that is you are absolutely right that he -

- his language around the taxing clause is essentially

like it could be constitutional, so I'm going to find it

constitutional. I am just saying, that was not the

attitude towards the Commerce Clause. Certainly, he

didn't have the attitude it could be constitutional, so I

am going to find it constitutional.

And again the dissents -- the four conservative

dissenters did call him on that. And I think on that one

issue they were right. But you know, my view is that it

was an oddity for him to create a new -- essentially a new

precedent that, you know, if you read through the opinion

it does not have a lot of precedence behind it, a new

precedent that limits activity under the Commerce Clause.

MR. EMANUEL: Let me state this adds one other

element to why this election is going to be a monumental --

MS. TANDEN: Right.

MR. EMANUEL: -- election, maybe, one of the

most important in 100 to 150 years, which is you are going

to have probably at least two justices retire and maybe

three. And whoever is president is going to appoint them.

MS. TANDEN: Yes.

MR. EMANUEL: So, in addition to all the other

stuff that is going on, you know, implementation of Dodd–

Frank, implementation of the health care bill, all the

other things that are going on --

MS. TANDEN: You are right.

MR. EMANUEL: The Supreme Court is going to be

reshaped.

MR. LEONHARDT: There should be a panel next

year about why Supreme Court justices don't retire early

and aren't more strategic about it because --

MS. TANDEN: It is really -- but there is an

argument about --

MR. LEONHARDT: If you think about Supreme Court

justices enormous risks with their own beliefs.

MS. TANDEN: Yeah, absolutely. I think it's

power.

SPEAKER: I heard that the number of applicants

applying to medical school is decreasing significantly and

that the quality of those applicants is also decreasing.

Now if that's accurate -- I heard it from a panel, and if

that is accurate how is the system going to handle it with

more and more people that were going into the emergency

room with a mandate now having insurance needing primary

care physicians, and they are not paying enough, how is

the system going to handle it?

MR. EMANUEL: So there are two parts to your

question. One is, have the applicants to the medical

schools gone down? To the best of my knowledge, it's not

true. Actually, I think they've gone up because of the

recession and people going away from business school. So

I don't think that's actually accurate.

The second thing is there is a question about

workforce and if we add in 30 million people to the system

can we actually handle it. And the short answer is

absolutely. And let me give you a few reasons. One,

Neera actually pointed to, which is increasing working on

teams where there are lots of things that I do as a doctor

that I don't have to do that a nurse could do or even a

health aide who doesn't even have medical training could

do. We are going to see increasing use of that because it

makes no sense for me to be doing a lot of those things.

The second piece of information I would suggest

to you is a lot of what we do, repeat visits. So I am an

oncologist. When my breast cancer patients come back

right after we finish chemotherapy, they come back. I

schedule them for 3 months for the first year and then 6

months.

Where did 3 months come from? It's hocus pocus.

No one has any data it makes any difference and there's

lots of reasons that it shouldn't make a difference. And

so you are going to see a lot of change in how we handle

that.

And the last thing I would say is if you look at

Massachusetts where they brought 500,000 people into their

state, no change in waiting times at primary care doctors.

No change in waiting times at cardiologists, no change in

waiting times at obstetricians. That's not data from left

wing nuts. That's data from the Massachusetts medical

society.

MR. LEONHARDT: They might be left wing nuts.

(Laughter)

MR. EMANUEL: I know that.

MR. LEONHARDT: We will take one last question.

Sir, you have had your hand up almost the whole time.

MR. STEIN: I'm Norman Stein (phonetic) from the

American Enterprise Institute. I have a question mostly

for Tyler and it follows a bit on what Peter said.

Imagine that Republicans take the House, Senate and the

White House and pass what Paul Ryan has called the mother

of all reconciliation bills.

That means that we make the Bush tax cuts

permanent, cut the top rate to 25%, cut Medicaid by 30

percent and send it back as a block grant to the states.

It would cut out the tax on the health care mandate and

also probably cut out funding for much of the rest of it

along with the whole series of other changes.

What do you think the odds are that Mitt Romney

would veto that bill?

MS. TANDEN: Great question.

MR. LEONHARDT: You are the conservative.

MR. COWEN: I think he is skilful enough not to

get into that position in the first place. And there are

enough Republicans who want to be reelected that they

would, in a quiet way, support Romney. And I think a lot

of what you mentioned is what would happen.

I don't think it would be a 25 percent rate.

That sounds too low. But the Bush tax cuts would be

continued and made permanent. But I think there needs to

be some kind of health care policy put on the table and it

would be radically relabeled. But cost control will be

kept. Cuts to Medicare or potential cuts to Medicare will

be done away with.

Medicare will be firmed up. That will be sold

to Republican and elderly voters. But parts on the right

will take a real hit. And I don't think the full blown

Ryan plan will ever happen.

MS. TANDEN: I would just say I have been

waiting for the silent majority of Republicans for a

little while here over the last 3 years. And it's been

difficult to see them on these policy issues. So I hope

you are right.

MR. LEONHARDT: It sounds like Norman's on my

side of the bet.

Thank you all.

SPEAKER: Thank you.

(Applause)

* * * * *

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