Transcripts For CSPAN2 Key Capitol Hill Hearings 20141220

To me that the connection between the military, the activeduty military and the va was terrible symbolized by the fact that we had incompatible electronic record systems. And that apparently have given up trying to harmonize billions of dollars in ten years at least. I wont get into a number, i will accept wholeheartedly the spirit of your question and answer it in a couple of different ways. The military Health System in the va system initially had Different Missions and the whole idea was after the Second World War and the words before now if you got ill or injured you are going to move on. That degree of of coordination at a time when health care was simpler served its purpose. Fastforward purpose. Fast forward to the 21st century and that is neither acceptable or desired because of the complexity of care. We have committed to harmonizing and working on that transition, and i cochaired the Health Executive committee with the under secretary of the va to work across some broad areas , Information Technologies i want to address these enabling systems like the Electronic Health record it was a little bit naive by everyone to think that just because if we built a single system that i would talk to each other, kaiser, geisinger, whatever and look at all of their hospitals, particularly their early experience because they inserted a software program, and it turns out because there is something called data standards that you have to deal with, so if i were to ask everyone to hold up her cell phone we would see a a variety of cell phones, iphones, galaxies, but you could text each other, email each other, phone call, send each other documents, manipulate those documents because their are data standards. Within standards. Within Electronic Health records and what really was a nation Business System which was originally designed as an archiving system. If i encountered a patient i would record their history, what would happen is you would see in one system they would call a water bottle of water bottle and another system they would call it a goblet and another system of plastic vestal. You could not talk to each other. What am i saying . We have gone a long way dealing with the interoperability of data. Data. And so we particularly last year have made Great Strides in harmonizing between the va and the military Health System, this issue of Data Transfer interoperability, and we expect to make more strides even as we modernize our system. Complex issue, but i appreciate the spirit of your question and it needs to be solved in real working on that. I think we are out of time. Time. Thank you for listening to me. [applauding] thank you. I invite the panel to come up. We are glad you could stay for a little bit. Thank you. Again, thank you for those remarks. I will be i will be brief in introducing our distinguished panelists. We really have an extraordinary panel. The cbo alumni gathering. Only only henry aaron has now worked at cb a lot of this crew. I will get to her in a moment, but sitting immediately to my right thing made up for that part of his career by doing Amazing Things thereafter. Controller of the air force. This is the year he is glad going into the Christmas Season because he is the guy that had the handle sequestration. In terms of his workload like the grinchs dog. He got through it remarkably actually. Its a huge credit to bob and many others in the military. They they kept functioning. A lot of other compliments as well. Military compensation, department of defense. She also worked at the pentagon but is now at the Congressional Budget Office and has what recent options papers and studies on Defense Health care that it talked about the ways in which among other things some of the cost might be shifted a bit more within reason to the actual members of the military and their families because as many of you no this is a generous system in terms of the costsharing. Most of most of us would agree with that philosophy that it should be generous one of the questions it has to face is can it really afford to be quite that generous. This is an issue we we will be talking about as well. In addition to having founded the Congressional Budget Office Budget Office as brookings nears its 100th anniversary i would nominate her, scholar public servant. Not only the not only the founding director of cbo but the director of office of management and budget, vice chairman of the fed and decided to try to help dc fix its finances and last year needed a new director she volunteers for that draw. One of the greatest healthcare economists in the country and has been at this for a long time. Affiliated with a number of other organizations in the country that work on matters of Health Care Including the institute of medicine, American Academy of arts and sciences and the number of other organizations. I looked i looked to the resume recently and realize we should make greater use because his masters masters degree was in russian studies. That may even help executive Vice President , we have been glad to have part of our brookings efforts over the years has bob and others have kindly helped as previously. Check check runs the military Health Care Program he was at the Congressional Budget Office. We really have a great deal of experience across all these issues. You deserve the here to here the credentials as with versus big topic. You could put the military Health Care Problem within broader dod budget perspective for us. Thank you and thanks for the chance to be here. I want to talk about it more from a budgetary perspective. There have been significant changes in military health care that have slowed the growth. Just a few examples, five years ago the administration on the department of defense significantly reducing cost. The congress the Congress Allowed the use of medicare rates for small hospitals and outpatients. Dod has implemented the Defense Health agency. Congress mandated a fiveyear test program of making mandatory use of mailorder pharmacy which has cut costs significantly and benefit reductions are increased fees by 15 percent, indexing partially and significant changes in copays for pharmaceuticals. 3 4 billion of savings per year which we will go on in perpetuity unless they need to be reversed and has actually reversed the growth of Health Care Cost over the last three or four years which has helped the department of zork budget times. The budget restraints will continue. Continue. More needs to be done. I will finish up the sensor. In terms of further changes in military health care, one as john alluded to already which is some changes in the fees and copays and the tricare tri care program. This is to be looked at in the context of overall military compensation and two years ago the joint chiefs participating lead in overall look at compensation the suggested changes like holding down pay raises some of which we will be adopted by the proposed significant increases take taking healthcare that is free. Congress did not act on it but i hope the department will resubmit. They will save a couple billion per year. The other thing i think the apartment is to do is tough one, streamline streamline the military treatment facilities, significant underutilization. The military services have tended to resist because they are not convinced they we will keep the savings. Services may not get those savings for modernization and training. One of the things they may need to do is think about changing the way it budgets for healthcare and requiring the services centrally manage and centrally run the activities requiring that they pay for them on a feeforservice basis using a structure called working Capital Funds that are pretty common. Maybe that would change incentives and make it easier to streamline these facilities because some of that is going to have to happen. There have been important successes that we need to recognize. But there is more to do with regard to changes in benefit structure and some streamlining of healthcare. Before we go on let me ask you one more question, obviously a hard question to give a short answer to. The military compensation. As we talk about potential Cost Shifting toward more for the families and personnel should we think about the backdrop. They have to maintain a strong compensation program. We would all probably agree a generous one to recognize the service of men and women in uniform. At the same time the department is recognized senior military leaders in the slow the growth and compensation cost of free up money within a constrained budget. Some of some of that has occurred, limits on pay raises, large dollar amount, and i think there is more to be done. You are right, we need to look at the healthcare in that context. More needs to occur as part of overall compensation. I will do one more followup. If they were going to be a big reform because what you and doctor was another zip, correct my premise, bigger, broader reform and any element of military compensation policy. Do policy. Do you think it could conceivably or should conceivably be with healthcare . You come out of these looking at questions in great detail. There has been significant reform. Reform. It has not change the structure of military compensation. I am not sure that is realistic but i think it needs to look at all of the elements, not just focus on one because all of them are important to the military members but also important to the efforts to slow the growth. You have written about options that might save in the ballpark of may be eight to 10,000,000,000 a year within military health care, not necessarily reducing the overall cost for shifting the cost more, the more to the beneficiaries and especially military retirees who are not in the system but who are generally in reasonably good health and that made up other jobs. Obviously that is complex issue and the complex group of people with a lot of challenges. Could you explain a little more about your options, the logic behind them, and how much more they might say he is beyond what the department of defense has been requesting . When i think about these sorts of questions i think it is useful to think about what the drivers of healthcare costs of been. By my calculations spending on dod health care since 2,000 has more than doubled. Increased by 130 over and above inflation and the general economy. It is worth spending a minute talking about what has led, what was driving that increase and what might be driving increases in the future. In addition it is also useful when we think about options to kind of think about the sorts of relative magnitude of the sorts of options. So you can assess really where you want to put your effort. For example, you know, what sort of options are going to give you savings. So in a report we took that approach and we looked at what the drivers of military Health Care Costs have been. And you no one thing it is not was the cost of the wars dod spending on contingency related medical care peaked in 2000 2,000 that about 3 billion. It has come off since then. A 50 billion program. So that has not been definitely important work being done, definitely resources needed to be devoted to medical care to support the war, but it was not a primary driver of that hundred and 30 percent. Instead we felt that one driver has been the increase in new benefits and the expansion of benefits by the congress. Tri care for life is one of those. It is medicare Wraparound Coverage for those retirees who are eligible for medicare that is over age 65 , and it has been a popular program. 2. 1 Million People have enrolled. Essentially reduces the essentially reduces the outofpocket cost for military retirees and their families almost to zero. Basically medicare pays. Medicare part b pays an tricare try picks up the remainder. That has been in driver. A second driver is the financial incentive to use tri care so that the outofpocket costs are for activeduty members, their families and for military retirees, significantly below what other options are , to the private Insurance Market or employment based insurance. And these financial incentives, military retirees can purchase care and tricare tri care prime which is the Health Maintenance Organization Type plan, and they can purchase that with an enrollment fee of about 550 per year for the family. But as they use the system that is below what most civilians face. So this creates an incentive first of all, it encourages people to join the system. You saw that. The enrollment fees were constant basically. So you saw people joining the system. And that financial incentive is continuing so far. In addition you see people use more health services. Those who are are in tri care tends to use about 50 percent more Healthcare Services than people using civilian hmo plans of comparable age. You see more people joining, and those people who join tend to use the system more. For those reasons we looked at what different options might be an looked at some on things that have been suggested of the civilian sector, things like instituting disease management programs, programs programs, programs where you try to coordinate care more and get more routine maintenance prescription drugs and care so that you avoid the flareups and the need to go to emergency rooms. We looked at options like relying more on scholarships and putting medical students, training medical students through civilian universities and closing the dod operated medical schools we looked at management related efficiencies along the line of creating the defense help agency, trying to to eliminate administrative duplication. The sorts of options may be worthwhile from a budgetary effect. Sure the costs borne by mitchell is to Fund Military operations, and we found that you were able to save more like billions of dollars per year compared to some of these other options for you are talking millions of dollars per year. In the cbo judgment increasing the share of cost paid for by military retirees and their families addresses both the primary drivers of healthcare cost and has the potential to generate savings in the billions of dollars per year there are other considerations. Thank you. That is helpful. If i could turn to you with two big questions. First of all, taking all of this sin, how does it strike you from your broader perspective and healthcare reform debate and secondly our experience with obama care, the care, the Affordable Care act, the reason Development Summit civilian healthcare front, any lessons, new opportunities, and choices. Outlined beautifully some of the special missions of military health care. Nobody i think would want our activeduty military to have less than optimal care and followup. There are some special needs for search capability. But also suggested, i am struck by the commonality between the problem, the challenges that we face in the civilian systems as the military systems. But this is paradox. Everybody faces. Increasingly effective increasingly effective medical care coexisting with a lot of inefficiency and lack of coordination. We talked about the Electronic Health record that is also true in the civilian sector and other evidences of duplication and overuse of care. Now, on the physical civilian side people are tackling this in two ways one is to try to get more organized Competition Among health plans so that consumers can make more intelligent choices and providers or health plans can make more intelligent choices about what to offer and how to reduce their premiums and still offer good care. That is one avenue. The other is changing incentives. Providers and bundling payments so that you arent using lots of different uncoordinated services. Think about what the patient really needs and also the incentives alluded to for patients to manage care more efficiently. There is a lot of commonality, and i have the feeling that we ought to be addressing these problems together because at the the other two challenges are the american lifestyle is not very healthy and the aging of the population which certainly shows up in the va system and retirees system. One thought about how we might be addressing all of these things together it it is a little radical, but should we be thinking about how some of the military systems might transition their people to the aca exchanges . And especially in sparsely populated parts of the country where one of the problems for the Affordable Care act exchanges are not enough people who live there. Military bases that problem as well. Tri care as an option for sparsely populated places. Maybe this should come together. Maybe these should be thinking about whether we can put those military personnel and their families and veterans choices on the aca exchanges with the appropriate subcommittee, and that would benefit everybody. Thank you. By the way, i want to make sure i understand, you would consider that for military personnel who are currently be provided healthcare as well as some veterans. Just a thought. The other thought would be, can we go the other way . Underutilized military facilities that civilians could then opt to use a plan quick to begin one click data point, and there are many people who know this issue much better, but for those who were generalists, of course we are talking primarily today about the department of Defense Military Health Program which is the 53 billion annual operation from the department of Veterans Affairs we have referred to several times, but it is a separate organization with a separate budget in the overall Veterans Affairs budget is now about a hundred and 70 billion he year, three times the military health care. Much of that is direct payment, but i believe roughly half of the Veterans Affairs budget exactly the Veterans Affairs program which is separate from all the increasingly related to an interlinked with, we hope, dod. I wanted to make sure everyone understood that basic set of bureaucratic and budgetary fax. Over to you for your perspective on what you have been hearing and where you think we should go. The case to have a dedicated supply system is weaker. And that suggest the possible deal of the option that alice he just mentioned and which is to help families of active duty military have their wellfinanced access to the General Health care system. In particular is seems to meet we should step back to look at this from the other side. We have a Health Care System if your income is less than four times the official poverty threshold scaled down for smaller families of course,. Youre eligible for subsidies and refundable tax credits in the assistance with cost sharing on a sliding scale that starts with complete coverage of what is a Silver Health plan. With the premium charged for the Health Care Plan that covers 70 on the actuarial basis. Plans can provide that coverage in many ways. Or through employer sponsored plans if you live through the Health Exchange they could cover it up today the of the cost of coverage which leaves relatively small amounts for deductibles. Perhaps not as generous as it tricare but close. So the question and i have would mitt be desirable as part of the national Health Care System to provide for the base level of coverage to be a general responsibility not with the department of defense but the overall Health Care System that is surveying the rest of the population . Now for special reasons to provide more generous coverage with the Health Care Package they want something approaching or surpassing platinum coverage. If that is the case that is a responsibility of the Defense Department as an extra our recruitment and a particularly generous Health Care Plan, higher Cash Payments or another form of compensation . To judge what is the best way that the Defense Department needs . My fundamental point is is is the nation that has embarked sat with uniform access and the hell scared system it is not a Defense Department obligation. So that active duty personnel it is the Defense Department responsibility. Faq very much. I know there are additional questions if his overall system strikes huge hue as is the fishes of fundamental reform of whose of beneficiaries is is it anything else you would like to address. I appreciate the introduction but i cannot claim that mantle because it is more from a perspective of a Management Consultant in the past with military health care. I appreciate the doctors comments to think about the work force that it is only one component of the system in to change that military Health System been repaid to think of as the system innovatively. To have multiple populations you have the active duty population i have never heard anybody thank you should do anything other than the the best health care possible. Certainly from the history and the burn centers with a dramatic break injuries nobody does that better in real benefit from things like that. But the second population is dependent and as a businessman, you have to do is think of the benefits but not everybody is in the military can take advantage of the benefit of full medical care for the dependence. Is the military benefit program you thank you have a baseline that everybody is covered. They are sharing in the cost is rare a business provide for the health care for all employees. Again for the third population that has retired from the military only 10 percent retire from the military. So we are not talking about huge numbers with military experience but a majority of them go on to other careers to do other things to have the opportunity to would join health care sears the aca or other employers in. And a to have a program where they can get Free Health Care and to do with it as often as they want to see this to be a burden the American People should not have to bear. There has been the steadiest done that as soon as you provide a free good so we know that. So looking at Health Care Costs under control onto individuals with the co pay san the deductibles. Part of what the military is doing is tell they improve the lifestyle of the military think of their own health. This is important. But it is not just by the people that are responsible for health care because so much is influenced by of leadership and command. We all know it has tremendous impact and it cost a lot in the military Health Care System and obesity is bad. The net yet in the military we still subsidize the sale of cigarettes so it is far below of a Walmart Store Something Like that. You cannot keep everybody smoking but you should not subsidize it. A adulterants out the Health Habits those the have standards that they have to maintain it is also those Healthy Eating habits so in order to do it in the future the key very much. Now we will go to you. So i guess we will work with it so to get a few comments on the table the gentleman here is a the fourth row and the second . To mitt good morning. I am always concerned when i hear comments from the panel i appreciate your expertise but looking at the challenges as a retired professional army officer why is there never any comments made with acquisition . Day well publicized office the 500 billion of cost overrun that could pay for the sequestration. Why is that never addressed in fly does that focus golan with of low hanging fruit . But the second part is the engine for leadership in the uniformed leadership in particular asks why they want to reduce for the rankandfile of the military . So i m concerned how you would address those either of those two points. I asked everyone here today to speak about military reform but the rest of your points are worth addressing. Ina war college in moving to of reserve forces based on the nations needs and from my perspective with the most difficult challenges moving in and out of the system to be like a patch quilt system from the top down. Very difficult filled with congressional is an individual complaints that takes time to do deal with. So from a different perspective or responsibilities if your reform will include how the reservist access the system . To come up with a fresh point of view from the individual up . Because we know with dod reform it has to be a part of the solution it will save us money also. If we can redefine the program then perhaps to have the benefits correlate with their Social Security number as they are authorized to go into active duty or that approach. The reform eventually will have access to that system. Maybe also like to give the secretary said chances of something still needs to be said or what ever is better for you . Yes. Thank you for that question and one thing i tried to allude to with my comments is we need to reexamine the cold war policies to tap into the reservist. I may reservist and also responsible for mobilization i will hear from the reservist i love the work that is true patriots do not hesitate to be called up but i hate that transition from inactive to active duty so one of the things i was alluding to the is to create these comprehensive packages for select groups of reservist to bring one easily to manage benefit spread of better. Going to the gentlemans question of the other issues that the Panel Focused on health care there has been a variety of proposals you are familiar with i cannot speak as an official but to look for ways to hold down cost ladin for ways to make fewer civilian hunter. To gathers together in ledbetter buying initiatives there are some of fundamental constraints there. End with that competition is that we have but there is the number of initiatives taken in. In into made that is the only thing that dod looks that. Anybody else . There are a vendor of transitions in excess of the live in the sector as data share income more job security, the general point is how to have of identifiers if you move from one system to another your records move with you and they know who you are. Fin if we can to think of a national Health System than maybe we can make some progress and it may be with a system that moves people in and out of their different status. Concern was expressed about the higher cost sharing in the restricting of medical benefit with the of relatively low paid members of the military but Health Benefits are a big part of the of compensation of the sergeant not so much of a colonel. So if you are raising a cost of health care are you disadvantaging fellow the state . Period there is a lot of ways you could have the income related premium it is the essence of the way Health Reform works you could have additional compensation and other forms that is part of the package of the changes of Health Benefits. So the issue of distribution compensation across different rinks ranks is separate from the question of the cost of health care should be shouldered personally by those in the military but i think it is a problem that could be dealt with. Last year there was lower copays so there was an attempt to do just what you said there were concerned for the more junior enlisted. Bellow executive here at brookings active duty coast guard officer i enjoyed the discussion and i will say that i very there is opportunities for reform and compensation with the ideas are worth considering. But my contacts with the budget politically can we ever get there or should we without a broader discussion on the other drivers for the rest of the population . Similar it to the acquisitions questions and i feel like it would be difficult to do get that military peace politically without balancing the budget or dressing Medicare Medicaid rising entitlements and looked at that going forward. Wendy is karen with the National Military Family Association and also the wife of the activeduty army officer. To streamline that its end i am o well aware there is a lack of resources but to offroad what was the plan b that they have adequate access to health care . It and other People Better brainstorming. And i just want to underscore that point. For either of those questions. One of the problems is there is political opposition been to that applies to military retirees handed is one of the reasons into hold down cost. With those paid reforms to use those beneficiaries for those choices reduce the resources more efficiently. It seems to be starting to happen. In wondering how we solve the problem together the more we can pull the specific herbs with what happens to us . With though sparsely Populated Areas to throw them into inadequate facilities. But if you have various if there are not enough facilities then this is a problem. It might involve using those facilities. Or it might involve for veterans are whoever really talk about. And then theyre not that many people. Also to think about the revenue side of government. The jury gsa and the secretary had decided they need to the Cash Compensation programs to include health care because the law limits military spending and therefore they dont slow the growth of military compensation. There is not adequate trading right now. In the nightcap of a total spending. I will talk about my good friend and as she says that we have to use secret contracts. One is to take care of the every and their families the way Abraham Lincoln in spoke of with the other is to make sure they are the best prepared for the fisa when there is a fight they live and the academy dies. It is the good way to know there is a tradeoff with the budget cuts. [inaudible] have a question as well . Are you factoring the fact the military Health Care System could be more efficient did lowercost he just by using medicare hospital rates to negotiate prices for drugs . Is less expensive than civilian health care. Move gave the families to the national Health Care System is that taken into consideration with cover vacation in pledges is the expense of that and the time constraints . To require more clarifying thing but that is more theoretical level it is not an active proposal of 51 and is the department to be clear. With the use of race there has been progress. Five years ago giraudouxs not using medicare rates is that has yielded some savings with the drug pricing schedules. The companies sued eric lost so there may be more but i think it is important to rid knowledge there has been progress. But to think of us dod Health Care System so could you comment more generally . One thing i was struck at there are 140,000 dod fulltime employs in the system is 60,000 that our military. But it does that look inefficient or expensive but do you want to add a word . Cover mitt would never be efficient it is not designed to be that way. So what has to take care of the active duty military. But the organizations ties to the way they have done things in the past has become very difficult for what drives people to come up with that changes when they do things with a higher priority. When they say there is so much money but they will spend more money modernizing and i am sensitive to the a. D. Is to be depleted over seizing and there are challenges interns to get medical care but holding to places in the air force may be only getting 10 people through the facility the day is probably not in anybody is best interest because the overhead costs to maintain that facility sell when we talk about innovation it is not the most efficient way because of that mechanical approach to do things for the future to let the past go. Of wood to go back to the issue of the deficiency in cost. In the reference to the impact of the price of care. Expenditure price times quantity. Is now one quarter of a century since the largest expense the of was with the impact of cost sharing previous and differences with the use of health care done by the rand corporation. Resulted in about 30 more use of Health Care Services in did in normal Health Insurance plan. We just heard the statistic that the use of health care under trade care the quantity of services for comparable populations and even larger percentages now if there were evidence the difference of quantity of care had a big impact on health care than you are into the business of doing a tradeoff and is it worth it to spend more to get the initial benefit . But the impact on health is negligible. And i suspect you would find some if you did a comparable study today but so i think it is unfair to ask if this is a good expenditure of funds by a the cash strapped perhaps not sufficiently trained and ready military at the present time. One other comment and is triggered by the reference to the inconsistency between the federal government is a deficiency about 10 years ago a very careful study was done of the likelihood that people would receive the care indicated for the condition and they had when they go into a hospital or to see a physician. Tens of thousands of records the results were startling. It didnt make it needed for if you were rich or poor or old or young or male or female or black or white there almost didnt call. One place stood out for having the attire of probability for what was recommended and that was the veterans administration. Now that was the one part of the Health Care System in the chant run by the a government he used to be a scene kolbe said it had a terrible reputation but then during the nineties a real revolution occurred. A pioneer electronic elves records and was way over the previous standing will hold the government manage Health Care Delivery system did a better job to deliver the recommended care of the average. Dow within the private sector the places that did sterling jobs is to with those innovative ministers who are given their heads a and are supported and given the flexibility of reform you can see efficiency in both plays is. Thinking. Date you. It was of similar thoughts along those lines. As an analyst i found it very challenging and i have not seen one answer if health care is cheaper than private sector care. Depending how you mitt digit how long does it take until you replace the need with the military or civilian patients wait for how much physical therapy. And Hotel Amenities in woodwards aversive is private rooms so the rates are fantastic way you can get them. But that decision is not easy. Right to. But the reinforces the point that to all of the average sarah is a lot of improvements to be made in to you need to seek about the mission in the same way for both of of some of bedmate get Better Health care. Just a couple more questions. Fet very rich for your time. I am with the military Officers Association of america at. I appreciated the quotation in you had about the military the d to be the best prepared to take care of the people in uniform today. My husband is active duty read headachy the understand for the of military to be best prepared but absent is that 10 percent who have given in their life as the sacrifices and could that panelist the june how close are with health care and i a military Family Member what is the obligation in terms of providing health care . I would be interested to find out about those obligations to retirees a and military families civic good morning. I with the National Also attractive to the Family Member. Part of the rational to include those in the Health Care System is military Health Care Providers have a sizable issue of where they will practice so affair removed either by to participate or by removing the financial incentives incentives, what impact would that have . Would dare try operation population in suffer our wish to practice . Speesix talk about the people of eric is is with someone comes into the voluntary and they want to continue to the retirement age that there is a contractual obligation to adhere to that. So those who are currently in the military that you meet that obligation. I dont think that needs to be something that is perpetuated far into the future. I think so whether we can afford to reduce debt for is the new people so there is a sister reassures those our grandfathers the he has different fruits but indeed we saw that great turmoil in the governor change the. I am not proposing to read things better idea. The benefits is part of it as part of the total package to continue to attract in the in the past they could defend the country in a rehab a volunteer really peripheral were not here with the economics. Host way down back clear. Bid to distinguish what is the obligation . What type of health care do we want people to have . That obligation of the active duty military good politically but of every obligational and she she had she wants him to be in. And with a more effective system but it is quite independent of what the subsidies are with those categories of beneficiaries. And respond today into this the details that we explored are available of the web site for those people i would encourage you to go look at the website. For the options that weve the dat, is to say what would the enrollment the year and the co pay spee if you took them in 1995 if they had kept pace with the increase of her capita medical inflation what would they be today . So to take that financial burden that was established for the retirees to Service Members to keep that to burden the same to adjust for inflation . Been the results practically doubling fuel mcfee going private to 52 and 1100. But what you see is that people do vive but ive replied a. Binge consumers protect so you have these behavioral effects. Id want to give the up of freshmen you were forced out if you change but tried care. Look for initially to be attractive to many people. The department of defense recognizes they have an obligation to retirees and active duty fear remembers. But would fundamentally change that it would take from the largely have been no copays to maybe fairly modest c 04, jr. In 1,010 or 20 for the network but that into many other proposals would save 2 billion per year and half of that comes from the revitalization that we discussed here already. Only half of that actually comes from the fees themselves but i dont think there is any question in that there remains of commitment. We will take one of the last round of questions and i will start with bob to respond or added the final comments his there lead to make sure that we hear today that we have not yet. My david is kathy with the military Officers Association and a retired the feeders in the system over 30 years to write them well acquainted with military medicine. We have discussed in the past the cost of readiness. There is a cost of various forms and can you comment on that . Good afternoon they get everything you have said i of the our readers tenure veteran in the the two points i was concerned about to talk about separating the military Health System is in readiness purpleheart that goes to court every day, to take care of the soldiers on the home front even with no war. So we need to be cautious as we proceed because we have to maintain our medical readiness to treat with or without war. As stated be deployed for ebola. The second question is did is we talk about over utilization has there been research into new frivolous health care the appointment kept secret as the er usage in potentially once they are deemed as frivolous has there been consideration of that to recoup those benefits . Thankyou. Ready is is one of the hardest things to define. That is why the base portion is using those forces is in conflict. To put with the 50 billion range but we should back off from the specific numbers it and recognize there is the strong commitment in this department of defense and especially facing many threats with health care is most assuredly a part of that. I can tell you from personal experience what we will do with military readiness is always something that gets raised and should continue to be. One final question with the responsibility or homage to contributed to realize you are out of service id i hear you say that the military Health Care System is in reasonably good shape but these work but there is some specifics and we dont need an overhaul but working in specific areas. Is that a fair summary . The eric if you started with the clichy to life the get is brookings. Is very complicated. Is the art of the possible. Is therefore to say yes it is doing the fundamental goal it to talk about the emergency room. I dont want to speak for dod. [laughter] they have wrestled with what i hesitate to call frivolous but in the civilian sector but if you go to the e. R. The deductible is high period there is a fee. At selfie those sorts of things have been proposed official the officially . Frivolous is the unfortunate word usually. And there certainly is good studies that will tell you that care coordination for chronic disease particularly will help the board rending tuesday of urgency room when you are really sick and avoids getting really sick to get into a condition where you have to go to the emergency room. And some of these are what you dont believe big cub as health care. Like pediatric asthma. If you can get children into a cleaner environment then they are which less likely to have emergency room visits for asthma a. That is not health care. But it is disease management that can save money. Nine yes continuing on alices feet, with virtually any context or contact that you have with the medical system, i have some probability to help you. It to me be difficult if you walked in and the likely the harm that is to occur, and there is no clear distinction anywhere on the probability distribution with a contact with the medical system in one case about a a policy change in some misuse bath there. Variate sarah strong possibility of benefits. Values the non are given to of term from wrote but to see that vaccinations are free but to have that payoff in time. But for other things publisher there is a tradeoff but the evidence is the medical benefits that are sacrificed our relief very small. But medicos services arent going into it the ships were issued. Rigo that he needs in the military service but we had to get that change possible. Not what each stakeholder once but what it is possible. Of the members in this room today i strongly encourage you to get in the fight. Not to justify or protect what you have, but to establish what is right for the future, the country country, eric your constituents. Bob, last word to use. I dont see with dash and the department of defense meet the appropriate adjustments so there is the rate moves mitt it byword but then to your appropriate spin victory lot of serious run the country we have the kentucky but health care. We thought we could do it more effectively with a broader set in that is the debate steadied to happen. We are committed to a restaurant but were also applauding the azusa into rigid so much and happy holidays. Thank you for being here. [applause] [inaudible conversations] what is your problem with ted kennedy . Minutes like we said where this came from was the 2012 convention when they showed the tribute video. At 7 00 p. M. Eastern on cspan. Washington journal inues. President and ceo for the unmanned vehicles international. What is that . It is the largest Nonprofit Organization for the aggrandizement of unmanned aircraft, things apply and navigate, but things and the capability to do that. Its been around for 42 years and we start with the military emphasis and we shifted to the commercial and the Public Safety side. Host are you a drone lobbyist . Guest we advocate for the use of drones come as you call them, as well as other vehicles and those systems that go on the water and in the water as well. Advocacy is one of the things that we do, but we also try to provide that information hard of association is educating people, decisionmakers, and others of the full potential of this. Host as we sit here today, what kind of regulations are there with regard to drones flying around the country . Guest many people have acknowledged that the technology has outpaced the regulatory side, but that is true of any revolutionary technology. So the loss have to catch up. Here we are 50 years later and we are writing bullying laws because people are misusing the technology. So then you need technology where there does have to be a regulatory process that has to allow things to come up to speed and for unmanned assistance, safety is paramount and that is the aspect of it that we have to make sure before we ever utilize the technology and understand all of the benefits that we can derive from the technology. Host recently spoke at a house hearing about drones and Airlines Come here is what he had to say. Output supports, the state use of Aircraft Systems, we recognize the potential benefit to our economic competitors and we also recognize the potential for a safety risk if we do not treat them as what they are, airplanes in your airspace. We have seen photos of the damage that can be caused by a strike in flight. A land aircraft can be much smaller or larger, but they harbor added risk and that they carry battery and motor is another hard metal components and this is a bird strike. Please take a look at this on a commercial airplane and this next photo of the military airplane encounter with an unmanned aerial vehicle. It is in the wing root there. We must not allow pressure to rapidly integrate this to rush a process that must be solely focused on safety. Standards and technologies must be in place to ensure the same high level of safety currently before it can be occupied to occupy the same airspace as airliners are operating in areas where it might inadvertently strayed to airspace used by commercial flight. And we also need to make certain that the pilots are properly trained and understand the consequences of possible malfunction. Host Michael Toscano, reactions . Guest i concur with his sincerity of concern that we have to make sure that things are safe in the matter of following the rules and that we do it in a safe way. There are two things you. One is that if youre going to fly into International Airspace, you cannot bump into anything else in International Airspace and you have to have the ability to detect a void. Secondly if youre going to find the National Airspace come you cant pull out of the International Airspace. So those are the two things that the faa focuses on and that should be the premises that all aircraft manned or unmanned, you have to follow the rules. The difficulty that we have with any technology, especially one like this, as there if there are people out there that dont know what the rules are and havent been trained on how to operate or dont care. So as mentioned in the testimony, it is spot on and we have to make sure that we integrate in the systems and as we heard they supported this technology and they understand the benefit that can come from this, but like with any technology you have to do it in a responsible way and hold people accountable if they misuse the technology, just like if you misuse driving a car going 55 Miles Per Hour and youre going 100, youre going to be fine and go to jail. Host will this be part of air Traffic Control responsibility . Guest you have to understand there is a spectrum most people think that the low altitude ones will be utilized for his and then the very High Altitude ones and then the medium altitude. Its where most cargo and Passenger Carriers fly. So if you look at the low altitude ones, most people say youre talking about 55 pounds or less, youre talking about altitudes of probably 400 feet and below and you could go probably up to 3000 feet or we havent figured out exactly what that is. And you also are talking these first applications. Eventually when the technology is mature enough it will be an extended line of sight. But for right now if you look at the possibilities of utilizing technologies for low altitude, most people think 400 feet and below there is a lot of good applications you can utilize the technology for and almost all fifth wing or airplanes dont fly unless theyre taking landings. Obviously have these applicators popping up in some applications and those are usually confined to a specific operational environment. If you do this in a smart way with the introduction of any technology, you have to understand the cause and effect and if you do it in a proper way, then you hold people accountable and then you can take full of vantage of this technology. Host is there anything preventing us from buying a drone on amazon going on to the National Airports runway and flying that thing off . Guest yes, youre not supposed to fly within 5 miles of an airport and you cant use any technology in a dangerous way. The faa can find you 10,000, but most importantly if you hurt me, im going to see you in your going to lose everything that you have. So when you stop and think this technology, you can go and buy one of these things online, if you misuse it, if you take a hammer and hit somebody with it, youre going to hold me accountable order. Youre going to say, okay, you did something irresponsible with this tool that wasnt meant to be thrown into the middle of the crowd. Host we are talking today about domestic drones. Guest yes, the world has art he gotten to experience that and that is something that we do not have here in the United States with a technical edge. We do have the busiest skies. Therefore the rules and regulations have to be appropriate to make sure that we have safe utilization. And safety is understanding what the risks are and what the acceptance is going to be. We have Technology Today that we use all the time that we accept the risks for. I mentioned the internet which has some downsides. There is photography, Identity Theft and other things, which was never intended for the technology but people were misusing it. And so you have to hold it accountable and you have to make sure that they understand what the rules are. Host we are going to put the numbers on the screen if youd like to participate about drone regulation and safety. How many drugs are currently flying domestically in the United States . Guest we dont have an exact figure, but its hundreds of thousands if not millions. When you stop and think how many people are buying from amazon, google, wherever it may be, robots are cool and this is the technology that inspires young people to get involved in the science and technology and mathematics and things of this nature. Until i can imagine over the Holiday Season there will be hundreds or thousands of these things purchased. One of the companies that does this, they have said since the inception they have sold over 700,000 of their platforms, phantom ones in phantom twos. Each version of the Technology Gets better and better. We have a technology called geosensing were they putting ordnance of all the airports to make sure that none of these are within 5 miles of an airport. So its almost like putting up electronic things. They say you cant go past these dimensions. So the technology is maturing every day. What i would think this is more of a leadership issue than a technical issue. Because people dont question his ability, but when they question it, its how safely can you do it. That is what we have to address. Host how big is this industry in the . Guest the numbers are going to be wrong and they are probably going to be low. In the year 2000, 2 of the world had a cell phone. Here we are 14 or 15 years later, 80 of the world has a cell phone. In the year 2000 you could not have predict did this large increase that happened. Once the technology was given and they started using it, they came up with ways to utilize the technology and enhance their life. But seven years ago you wouldnt have even known what it was. And so now creates jobs, it creates opportunities, it makes your life that are an easier. That is where you get that risk acceptance and what its going to be. Giving you the example of the automobile, which is a tremendous capability that we have. We killed over 33,000 people and this year, 6. 3 million and it cost us almost 300 billion each year in medical costs and damages and yet we drive cars every day because the benefit is so large to us that we are willing to accept the downside of it. And so if any technology once you start utilizing it, then you have to understand what the rules have to be and the laws need to be and understand how its going to improve your life. Host Michael Toscano is our guest. Please go ahead with the first caller. Caller hello, yes. And regarding having drones [inaudible] regarding the white house and obama and how they come together and put together a drone they just dive into it. [inaudible] and that is what i have an issue with. Host what do you feel . Guest with any technology you have to hold people accountable as i mentioned earlier. You can use technology to your advantage and my dad once said that you cant stop people from doing bad things, you just have to hold them accountable. Whether they are educated on how to use it right or if they choose to act in an appropriate way. So if any possibility that you have, yes, the Technology Like any technology can be used for not the appropriate application. Host paul is in Mountain View california. Caller thats right, you cant hold accountable people you cannot identify. How are you going to stop korea, russia, isis, from using drones to spy on and extraordinaire americans two it wont be the faa regulations. Guest again, a situation with any technology, whether its this or satellite cameras or other things that we have, it people really do inappropriate things and then you have to make sure that you have the resources to protect ourselves and again, this is a technology that could help our defenses to make sure that we keep a prize of things that are being done against us or in an inappropriate way. Host matt sends a tweet saying drones are to be used with impunity. How can we stop that . Guest again, you have to hold people accountable. And if you say to me that the privacy laws that we have today are adequate, then this is just another platform that allows you to do that. So we have the fourth amendment, we have keeping tom laws. If i took a ladder and put it up against your house, i would be breaking the law. If either from across the street with a highpowered lens or camera, i would be breaking the law. And if i did a with another system i would be breaking the law. If you break the law and the privacy law, then you need to be held accountable. And if youre saying theres no anonymity, there are things that we can do and i believe that every commercial application or drone should have a chip in it or identification just like every plane has a number that identifies this plane belongs to soandso or this drone wants to soandso. So we can instill verification if thats what it needs to take. The upside of this technology, the agriculture is going to be one of the best uses that we see a net. Right now we have about 7 Million People and then that is a net gain of 2 billion more people. So the secretary of ever culture said that we have to do 70 more in the next 35 years. This technology will help grow more food for people and be able to apply pesticides in a more efficient and effective way so we put less of it into the groundwater and more that needs to be used. So there is a tremendous upside to the Tech Knowledge he. And if people are going to use technology, they need to be held accountable. Caller greetings. I have two questions for you if you would please allow me quickly. Personal, with the drones. What are the requirements for one to look at a career . Back in the spring time on the washington journal they said that it the Online College was opening up the drone program. Im wondering if you have to be a pilot and secondly i was thinking about the usa and our country. And the drones, like you said, i think you just admitted that there are hundreds of thousands that are not there. And its just another dagger that they can use. Host thank you, sir. Mr. Toscano . Guest if youre going to utilize any technology, if youre talking about small and low altitudes, then there has to be some proficiency to make sure that you understand. And you operate the three aspects. You have to make sure that the platform or aircraft is airworthy. Do you have to do what you need to do. And Second Coming have to make sure that the pilot or the operator is properly trained to be able to utilize the technology and 30 need to make sure that you understand what the federal regulations are worthy operation environment from a safety standpoint. So youre probably only going to fly anywhere from 10 feet to maybe 100 feet and its very few people that are going to be in the middle of a cornfield. So that is a great application you can have. We talk about firefighting and search and rescue, powerline monitors, pipeline monitoring, wildlife monitoring, whether determination. These are all things that can save lives and we dont even fully understand all of the applications. What i mean by that is that if you have one of these systems after an earthquake or natural disaster, on the 14th street red, you close down this lane of traffic and you suspend people downloaded to do the same thing. But when you close down a lane of traffic, how many accidents how many people die because you close on a lane of traffic. And that includes flying one of these drones or Aircraft Systems to do it. So its much more Cost Effective and doesnt cause all those accidents and loss of life. So there was a tremendous job creation that will take place with this technology as well and will create the impact in the billions that youre going to see it. This is why its a better mousetrap to do the difficult jobs that human beings do everyday. Host or would you like to see from congress in regard to this . Guest the faa is responsible for the National Airspace and what i would like them to do with the decisionmaking is to make sure that we put enough emphasis on getting out the rules and regulations to allow this to be done in a safe way. And i think the aviation subcommittee, i was very pleased at the tone in which they asked the question. The question was more on the line of what is it going to take for us to feel this technology and why cant we do it now. How are other nations during this and is the United States falling behind. It was a positive attitude in understanding that this is a technology that brings many benefits and we have to make sure that we do it in a safe and responsible way and hold people accountable if they misuse it. Host from maryland, you are on the washington journal with Michael Toscano. Caller hello. I was wondering. Im not so sure that we understand, but also should we be worried about the possibility of them being hacked depending on what they are being used for. Thank you. Guest with any technology that has computers or software in it, you always run the risk of people hacking it. As to what cars and others and thats definitely a concern. And so you are spot on with that concern, that is a concern that we have as well. So looking at most airliners right now they have an Automation Capability to them. We hope we have provisions in place to make sure that we have encrypted it correctly or prevented them from getting there. And Remote Control planes are a drone. And i mean only call them in on unmanned aircraft, it has a communication link that goes between the operator and if the person doesnt understand how to use the technology, they need to be held accountable. And thats what it comes down to host Michael Toscano, using drones domestically at this point, is the government doing that . Guest the military has utilize the technology 40 or 50 years ago and its just now in the last five to 10 years this technology is transitioning to the Public Safety and commercial applications. This is no different than the internet gps, satellite, things that we continue it. So these are technologies that were developed for military purpose and they were very costly at that point in time. They become much more reliable and affordable. So now we are going to see this technology involved in almost any apps out of our lives. And so again many women know how to do their job better than anyone house. With the school does is allow them to do it in a much more efficient and effective and lifesaving way. Caller thank you so much for having me on the show. An excellent conversation as usual. In regards to a different set of standards, with his exist legally, a different set of standards within a Government Entity within my state of nevada versus as myself as a personal citizen . Guest instance of that bs. If you are a public servant, you took an oath whether you are a firefighter or a park ranger or Law Enforcement entity, whatever it might be. And its another tool that allows those men and women to get out of harms way. When you read about the firefighters in arizona are the ones in texas that lost their life come of this is a technology that does two things very well, its very good at Situational Awareness or the ability to extend the eyes and the heirs or its really good as a delivery system. So i Situational Awareness, i firmly believe that if you give good information to smart people they make smart decisions. And in many cases and that includes getting good information in a tiny manner. Having that information where you dont have to put human beings into harms way or love is people that you have to go into harms way to do it in a much more effective and efficient lifesaving way. Host what is your connection what is the connection between what we are talking about . Guest theres a lot of similarities. Whether youre in the air or the ground or the maritime. A lot of those have to do with Situational Awareness and understanding the operational environment, making sure that it doesnt bump into anything. Detecting a boy. We have smart cars that have the ability to look 360 degrees around, they will tell you if youre getting too close to the vehicle in front of you, the cars are smarter and it allows us to be able to take the technology and make her decisions and as i mentioned to you we killed 33,000 people, we had over 6. 3 million accidents. Between 87 and 93 accidents are caused by a human being and we are the weak link in the system. So if you want to reduce those numbers via a magnitude, human beings inherently cannot improve too much moron whereas technology will allow you to do this and it can assist human beings and in some cases can do a better job with it. Host ryan from michigan. Caller hello, theres a long way to go at this. So if i own a lot of hunting land and ice in one of these drones over and i shoot it down, and i know it is a drones, is that illegal and who gets the spoils . The remnants of the drone . Im not advocating that, sir, but we understand everything in the Aviation Industry. And we are running off of all great stuff from decades ago and now youre putting more mechanical things in the air. Host do have a connection to the Aviation Industry . Caller i dont have a connection, but in the military service we are running off of antiquated systems and we have a lot of things going up. And then recently with the cyberattacks and this is going to be run off to the base programming, i think all sorts of problems. Im not against you, michael. Host let me ask you this. Okay, i hung up on him, im sorry. Well, go ahead. Guest he has a question about the technology where if you build an unmanned system especially the small type systems, youre going to have to have a sensitive technology. That technology is going to have to be at a proper price point to utilize this technology. I actually believe that we will make general aviation safer because the technology that you have developed to fit into unmanned Aircraft Systems and especially the small drones, that technology can be migrated and i think that we are actually going to make manned aviation safer by utilizing technology that will be cost efficient to be utilized from this standpoint. And as far as shooting them down, this dislodging a firearm, or what have you, would you shoot a plane over your house or helicopter or anything of that nature . You take responsibility for the actions that you have herriot and it is someones property that is utilizing it. But if they are doing it inappropriately, they need to be held accountable. Host along what he was talking about, this is a tweet they came in. Is the position on common law property rights. Space arty redefined at once. Does somebody on the airspace above the property . Guest you know, this is a question that has been in the courts since aviation was created. When aviation was created, and Wright Brothers broader reform the faa in and the faa was dont own from u the ground to the heavens. The law will have to be done. And theyll have to and Court Decisions that go down. I think you have words like reasonable for your domicile, what you own. Is that ten feet above your house or 100 feet above your house . It will depend on the cases we have, and we have numerous lawyers that are asking these questions and determining what that could be. Host robert is in sacramento. Hi robert. Caller hello. This is a great