Transcripts For CSPAN2 Tonight From Washington 20120919

to lower health care costs. then a discussions previewing cases the supreme court will hear in the new term. it's followed by remarks from paul on the last supreme court term. tomorrow's "washington journal" senator tom harkin efforts to avoid the fiscal cliff. the accusations that the president is engaged in so-called war and a recent washington monthly article profoils the consumer protection bureau. we talk to washington monthly editor in chief. washington journal begins live at 7:00 a.m. eastern time on c-span. next oregon governor john on efforts to reduce health care costs in his state using a coordinated care model where doctors are paid health outcomes not for each medical procedures. this new model is also part of the affordable care act. from the center for american progress, this is just under an hour. >> and the person that worked on health policy for over a decade, i'd say the governor dr. john kitzhaber helps -- a hero for the work he's been doing for decades. and we're particularly excited today for him to discuss his innovation in the medicaid program. as many of you may know, he has devoted a lot of time and effort to the issue of lowering health care costs because we see this as an issue for the federal budget but also state budgets, employers, employees, and basically an issue in america's competitiveness over the long-term. and so we have devoted a lot of resources to looking at new ways for us to lower health care costs. and one of the great innovations are what state are doing. today governor dr. john kitzhaber is going talk about his leadership in developing new innovations in the medicaid program and using the medicaid program itself as a driver for reducing health care costs. this comes at the time when states are really struggling with rising health care costs that is really putting pressure on medicaid budgets and so his work is vital to that. cap, about a month ago released a series of idea encapsulated in a new england journal of medicine. at heart of that was innovative idea at the state level to use the power of state to drive health care cost reductions. we're excited to have governor dr. john kitzhaber here today. i welcome him to the floor. [applause] [applause] thank you very much. it's a statement on how far i've come or not come. thank you very much for inviting me to speak this morning. i want to thank neer tanden and the center for american progress for the help they gave us to secure the waivers from cms to implement oregon's bold health care proposal. as you know the fundamental problem in the health care system is the huge growing discrepancy between the cost of care and the resources we have available to pay for it and also the fact that we have embarrassing poor population health statistics to show for the huge expenditure for the resources. as you know, there are three strategies both public and private payers have employed to creates the rising health care costs. the first to reduce to cut provider reimbursement. and reduce the number of people covered, and the third is to reduce cover benefits. now the first two of these strategies are reducing what we pay for health care and reducing the number of people covered simply create barriers to access forces people to delay seeking needed care and driving them no the emergency department and both of the strategies allow public and private payers to reduce their medical exposure they serve as pressure values to address the real underlying problem which is the cost of medical care itself. as a result needer of the strategies is effective. the uncompensated cost that are across-suited by underensured people shifted back to the payers through increases in the insurance premiums speedometer first point i want to leave you with is in unless our efforts at health care reform address this cost-shifted cycle we're not going to be able to solve this problem in the long-term. now, i believe that the opportunity to break this cycle is embedded in the current fiscal crisis that was precipitate bid the collapse of the financial institution in 2008 and the recession that followed. when he asked what if the crisis of 2008 represents something more than fundamental than a deep recession. what if it is telling us the growth model we created over the last fifty years is unsustain belie economically and ecologically and 2008 was the year we hit the wall. i think he was right. i don't think the world is going to look like it did before september 2008. we have crossed a define. we are bumping up against the fiscal limits and the limits of the national environment. and the challenge here is to readjust to this new reality not to try to go back and return to the past which at least in the case of our health care system was not serving us very well before in 2008 in any event. and that gives us the opportunity. therein lies the opportunity ability to readjust to the new reality rather than trying to create a world that no lox ere exists. now i'm doing to return to that in a moment. states following the 2008 recession were particularly hard hit because states unlike the federal government can't push their politically difficult fiscal choices in to a national debt. they have to operate on the balance budget. as a consequence they were faced with deep budget cuts they could not avoid. so in response to this very real crisis, the federal government passed the american recovery and reinvestment act in february of 2009, with the $780 billion of stimulus resources that were designed to get people back to work and help states with the fiscal problems particularly in the area of public education and health care. so those resources were a real life to states if 2009 and 2010. oregon received over a billion dollars to help with the budget in the line share that have went in to public education and medicaid program. so while the resources helped keep the medicaid program afloat there was a distinct downside to these resources. in the first place, they simply propped up the health care delivery system and provide nod incentive to change it. second, they massed the impact of the great recession on state revenue and third, they were one-time revenues. when i took office in january of 2011 not only ask oregon face one of the per capita budget deficits in the nation we faced over a $2 billion hold in the medicaid budget which would have amountedded to 40% cut to providers if we continued to cover everyone eligible for the program. most states face the debt situation simply drop beam from coverage. oregon choose a different path we could see little to gain and lot to lose by simply dropping coverage and forcing people in to the ed where we would end up paying for someone's stroke in the hospital or providing blood pressure medication in the community. we used the crisis as a opportunity transform the delivery system to get a lower per unit cost and increase value for the dollars we were spending starting with the 600,000 people on the oregon health plan. the medicaid program in oregon. before i describe the product of our effort, i want to use an analogy to show you where we are at this point in time by comparing the development of our health care system to the development of a successful organization. let's say a business. now we know that a business grows when there is an investment environment that allows for economic development growth and prosperity. and if the business -- when the circumstances, the environment, the business environment begins to change, if the business doesn't redesign the business model to reflect the new circumstance rather than the old that curve frattens off and begins to drop. so general motors would be a good example of a company for a long time ignored that continuing to build big gas-guzzling cars in the face of high oil pressures and. the successful business when it sees that the world is changing, the business environment is changing, redesigning the business middle to reflect the new world not the old and develops a new growth curve. the problem is for awhile this old curve and the new curve have to coexist and compare in between is called by business writer as the area of paradox. it's an area there's a lot of anxiety. it turns. and people know that what they're doing isn't working. and they know the current system isn't quite right. they're afraid of the unknown. so as a consequence, they defensed thete was defined to p. so i submit smo you that is exactly where we find ourselves today in the united states in the imrair of bar docks and education, in economic development, in energy policy, in transportation, and certainly in health care. so the challenge before us is not like the rope scheme in outdoor school. i don't know if you have done it. they put you ten-feet above the ground. you have to move from one post to the old. to the old business model to the new. the only way you can do it, you have to lean out for here far minute. you have to let go of the rope in order to grab the new. it's human nature to cling to the familiar. the fund here, the leadership challenge is to be able to describe that new business model in such a way people can see it, embrace it and let go of the old in order to embrace and move toward. and then move from the current paradigm to the new. for decades, the u.s. health care system has been operate on a business model that assumes that the public sector and private employers are unquestionly underwrite a medical inflation rate throwing off faster than the cpi and the system continue to be finance notwithstanding the relationship between the expenditures and pos health care outs. in june of last year the oregon legislature took the first step to develop new business model for the health care system by pass phlog keys poo eases of legislation. the first the first one acknowledged we're in the area of paradox and set up a process to begin the design and new business model in order to transform or health care system. this business model is build around coordinated care organization which are local delivery entities that are formed around natural communities like a county or a hospital referral area, each cco will be unique and look different in different part the state. all have to come fly to four central information. [inaudible] the second one is a connection with the community based programs and efforts to address the drivers of population health and the governance structure that reflects the new emphasis on population health rather than simply the delivery of medical care. a third is managing utilizationization within a risk adjusted global bucket that grows at the fixed rate and finally accountability for performance standards or access clinical outcomes and metricses for improving population health. the legislature also pass senate bill 99 which set in a motion to state 00 exchange a -- comparison about the quality of various health insurance plans. now this exchange, which i'm going come back to in a moment is a central element in the strategy to move the transformation beyond the medicaid program and in to the private market. the past february after 75 public meetings and triable consultations in a ton of health legislative hearings, the legislation passed 1580 which adopted the businessman for coordinated care organization and set up an application process to be developed and certified. now i think it's worth noting here that the legislature passed this bill as well as the legislation to produce the health insurance exchange with overwhelming bipartisan majorities. senate bill 1570 passed house of representatives on a vote of 53-7. this -- election year less than three month before the oregon pry their a house split 30-30 between gms and republicans. think about it. 53-7 for an insurance exchange and transforming the health care system. i think it would be unimaginable this year in the united states congress and probably in most of the other 48 states. which is another story. and not a bad one at that. so six months ago, in march, i signed senate bill 15 0eu and submitted to hhs a request for a waiver that would give us the forks ability we needed to they health care in new and different ways and a significant infusion of upfront federal money to allow us to the stabilize the delivery system to make the transition from the old to the new. in april we began accepting the first round of applications from organizations interested in forming cco over a dozen applied. on may 1st. i came back to washington, d.c., to negotiate the final details of our waiver, and met with officials from the white house and cms and omb and returned to oregon on may 3 with the commitment of the federal government to invest $1.9 billion in oregon over the next five years to help us transform the delivery system. now, as a part of this agreement, oregon agreed to reduce the medicare per member -- per member inflation rate trend by 2 percentage points by the end of the second year down to -- 3.5%. these will pay back the $1.9 billion in five years and save the state and federal government $11 billion over the next ten years. ly add that every state in the country adopted that same program and had the same inflation rate we would save over the next decade $1.5 trm. the super committee was supposed to save $1.2. this would save $1.5 by making people healthier and creating more racial system. in july 5 we received a final waiver from cms to allow us move forward and september 1 we have 13cco up and operatings covering about 0eu% of the medicaid population. when they become operational we'll be covering over 90% of the population. now before i go on, i want to take a moment and speak to the 3.5% inflation raid that we have agreed to. which may seem like a daunting task. but init's dawrchting only if we continue to think in terms of the old business model. let me give you an example. we know that the most common admission diagnose for people in medicare is congestive heart failure. we know that nationally about 40% of the people are readmitted within ninety days. the hospital gets paid for every person that comes in. there's no incentive to manage the people on day-to-day basis. that's an old business model. consider the hypothetical case of a 92-year-old with well managed heart congestive failure. there's a heat wave and the temperature guys up to 104 degrees. the increase in temperature in her apartment could put enough strain on the card vas vascular system. we probably won't know about her until she shows up in the emergency dp. the under the new care model it will be somebody given at this the model is intentionally connected to the community and focused on health there will be somebody, probably a new community health worker that is checking on her not to make sure the medical needs but the nonnonl medical sneeze will being addressed. under the old business model they will pay for balance and $50,000 to stabilize her but what it won't stay is $200 for the air-conditioning system. the difference is huge. you multiply that hundreds z of thousands time you can understand why medicare is driving the national debt. you countries by taking that 49800 out of the health care system you don't cut benefits you improve health and quality of life for the woman. she avoids having an acute case of congestive heart failure and gets to stay in her home. that's what we're trying to do to change the care model and the business model and realign our organization and our financial incentive to focus on prevention and well northbound the community based management of chronic base. we need the flexibility from hhs to change the payment model to support this concept and the outcomes and why we needed upfront investment to stabilize the -- now as i mentioned earlier, if this new care model meets the quality improvement standards and the cost reduction target we intoed to move our testimony of transformation dwrond to medicare. that is the only way that this kind of medicaid reform can be sustained. receipt me elaborate on that. oregon financing care for 600,000 people on the oregon health plan, but also or 300,000 state employees and public schoolteachers. all together we purchase care for 900,000 people in oregon which is about 1 out of every four people who currently have coverage. we're a big dog in the insurance market. there is the other 75 percent. if our intent is to align purchasing power, by asking qualified health to align we the new care model as they high quality low cost option on the insurance exchange and open that up to public schoolteachers and employees. if this population, the 300,000 population of state employees and schoolteachers were in a scare model of the 3.5% a year the savings to oregon is $5 billion. now, that's all well and good for the state if frees up resources we can ininvest in children, family, and education and economic development. it takes $5 billion out of the health care economy in the state on top of the $11 billion we're taking out in the medicaid program. all things being equal the loss of public funding could easily be shifted to the private sector the dramatic increase in the insurance premiums. to avoid that we have started conversations with the private sector, because we believe it's impeartive private employers begin to align their purchasing power and demand the same kind of care model that grows at the lower rate of inflation. i would argue it's also going to be easier for our partners in the delivery system. the public and private sector are asking them to do exactly the same thing. in addition, it's important to recognize that the aca contemplates reducing the federal deficit through significant reductions in medicare. without a new operational care model, and unless private purchasing is aligned with the public purchasing, this could result in very real benefit reductions for senior citizen and a significant shift to the private sector, and the obama administration understands that and it's i think it's one of the reasons they are supporting this proof of concept what a new care model would look like. now, let me just wrap up with a few sort of general things. i think we have a narrow window to make a new transaction to a new hx system before pricks and economics drive us to a action posture. i think it's true of the energy policy in the approach to economic development. we in the area of paradox. it is absolutely important we act while we still have the opportunity and the capacity to shape our own future. and as evidence i would simply refer you back to the high stakes game of chicken that took place in august over raising the debt ceiling to keep the united states from defaults on the debt. i think we can agree it was not the finest hour. in the end, congress kicked the can down the road by bumping the debt ceiling $2.1 trillion but doing almost nothing to address the underlining driver which is the intersection of the aging population and the medical system. i would remind you that 18 months agent the first of 78 million baby boomers started to become eligible for the medicaid program. they come on a rate of 10,000 a day for the next twenty years. these are people who are entitlement are going live -- do the math, as president clinton said. every medicare recipient will be taking which means we're going blow through the $2.1 trillion increase in the debt ceiling early next year and have to go through the exercise all over begun. health care reform is not about politics at the end of the day it's about economics and the economics are the law of economics are just as immutable as the laws of physics which means no matter who is elected president and who is in control of congress two months from now, there it no way we're going to get our arms around the national debt without getting the arms around medicare and medicaid. the longer we wait, it's harder it's going to be to get there. you know, these programs, medicare and medicaid and a lot of other things we depend on and take for granted was created by "the greatest generation." they haven't evolved to meet the circumstanceses that we live in today. my father was a member of the greatest generation. he was and these the were people i would remind you that lead the great depression and fought the second world war 27. it was drafted in 1943. he got the on robert sherman. just before the ship sailed a red cross volunteer got on board and told him his first daughter was born. he was in patent's army. he marched across to berlin. to the day he was drafted he and mom wrote to each other every day. and it's a poignant tribute to the 63-year-old romance he edited them in to book. this is an amazing chronical of two ordinary people, two ordinary new parents and the sacrifices they made to win the second world war. it i used to call him up every year on june 6 and i thanked him for saving the world. that's exactly what the generation did. not only did they win the war, they came back here and created the system of higher education and build the interstate transportation system and the transmission groups. they cured polio and eradicated smallpox and went to the moon. they created the social programs. 20th century. they created medicare and medicaid. they were the vehicles to which our parents and grandpas grandparents sowghtd to make the world before if for us. they did. because of the sacrifices, and those programs my generation the baby boom generation has enjoyed more promise and opportunity than any history of the generations. the problem is unwittily they laid the seed sowed seeds for the major problems we have today an economy utterly dependent on fossil fuel. much of it imported from the politically unstable part of the globe and a health care system that is driving a multitrillion-dollar national debt. a way of life that depends on the consumption of resources fiscal and natural depend on the future generations. this is the business of the baby boom generation. this is what we have left to do. it seems to me as sign sign once said, -- einstein cede we can't solve today's problems by using the same level of thinking when we created them. you can't use an old map to explore the world. and he's actually right. every new generation is faced with a new world and a set of problems that can't be solved by clinging to the past a by imagining a new world and new set of tools to which to build it. that's our job. our job is to recognize that responsibility to solve this problem and come here this morning to address as well as the problem facing us in energy and commitment economic development. they belong to us. you and me and people in communities throughout the country. it's something we can do nang the gridlock here in washington, d.c. it's something we have to do. if we're not willing to do for ourselves we should coit for our kids. those who are coming after us. a gift for the future. those who are going to inherit the dysfunctional system and world we created on our watch because of our inability to act to perpetuate it. let me close with the words of poet kim staff ford from oregon who eloquently captures the opportunity and challenge and i think the responsibility what alies ahead of us. it's a true story. lloyd the international sister of portland spent the last days silent unable to lie or speak lying in a hospital bed. on the last day at home, his wife hurried to pack the suitcase for the hospital, lloyd wandered outside to the garden. she found him there on the needs planting -- flowers. lloyd you'll never see the flowers bloom. they're not for me, they're for you. they're for you. he calls for the wild geese, their for you. the last old trees, their for your and your children to the seventh generation and beyond. they're all blooms for you. that's our challenge. to create that clear vision where we need go to act and lead and reengage in the effort not as a victims of the past not as captives of the status quo. .. at at&t for health. dr. nayyar has a variety of business and clinical jobs in the health care world as she has a unique day. she brings the business side, communication side along with clinical knowledge. and book will be of particular interest to you wallace says she still practices part-time and also teaches part-time and i'm interested in hearing some of the dots with the governor's speech and how they can trant fix these ideas to the clinical level. a second panelist is the menu is quite familiar to most people in our audience, dr. ezekiel emanuel, who is a senior fellow here at cap as well as the vice program for global initiatives at the university of pennsylvania. until january 2011, he served as special advisor to the direct your of the office of management budget as well as the economic council, one of the authors of the affordable care act and an expert on delivery forms. welcome to both of you. i would like to start with a scene which a scene which her thoughts were in governor's speech. >> were designated for me the most was really talking about the new reality, talking about the new reality, talking about reaching for what is possible. my viewpoint today is as a believer in health i.t. as a think about tomorrow if it's really hard to imagine some of the things the governor mentioned in a paper-based system. in my own practice they see a lot of the benefits of patient engagement, learning, dishes so many benefits i think to technology that they have to be explored and health care and really need to work within the framework of medicine. so it's not paradox and i think the future is very bright. >> so i mean, the ower comic experiment is one of four or five around the country, which are actively pivotal to figure out what is going to succeed in transforming the system. i think there's lots of elements in the experiment that really bode well, that clearly learned from some of the other experiments, smaller experiments of the private sector activities that have gone out there. let me just unpack what i think is essential. the first is you do have to have this continuity of care and you have to put someone in charge of care. second, you have to give them payment reform to get out of the fee-for-service system so that they can transform things, they can use the money for transportation. they can use the money for a home visit that aren't necessarily covered. so they have flexibilities of payment reform is critical. what didn't necessarily get emphasized that i would like to emphasize is they have to move outside of the four walls of the health care system. almost none of the patients occur to the hospital and that her service and that's where we care for patients by and large and that is where we are focused. you've got to get into the community. that is why there is community care organizations and the fact is that is critical to where people are living and go in there. similarly, i think there's probably some things with all of these plans as i understand flexibility to design how they're going to do this on their own. the state isn't going to tell them how to do it. well developed seems to care for patients and figure out what the right component is for doctors and nurses and home out aid and others. and i agree that technology is going to be critical. it is going to be critical in terms of electronic health records to get everyone on the team together, to be able to coordinate with the patient. another technology will begin coming online, whether their wireless, using more e-mail to communicate or other mechanisms. and i think what the system they've created an oregon woman fit team, 16 experiments in each of the communities, maybe not all of them will succeed. some will succeed very well i'm sure in some will have growing pains. we can expect to bat 100, 1000%. which are going to learn. we will earn from going toward what works, what actually is able to control the community. that is what is able to control diabetes or emphysema. they are big cost drivers. you have to give oregon credit if they were out in the 1990s deciding there to cover cover everyone in medicaid and try some in bold now, recognizing with a different system they are trying some in bold. i think unlike many places, they are actually putting money down on this because the penalties if they don't succeed for the federal government are pretty substantial and the hundreds of millions of dollars as you heard from the governor, the state is already got fiscal problems, so that is a pretty big that they can transform the system and i think it is this kind of old vision and bold experimentation that is going to charge the future for us. as the governor said, we can't stand the current system can't exactly the right combination to go forward. we've got a lot of inklings, a lot of interesting innovation. by trying them out and a whole state is i think really, really novel and breaking and i think oregon or three or four other states is blazing the future for us. >> as you're talking about other states and reform efforts coming by to take an opportunity to plug a report that caps that today in which we take a look at some of the fee-for-service, not looking at state experiment the experiments, both payer driven as host provider driven looking at medical homes, a ceos and payments. and a lot of -- and i think to talk about the report for a moment, but my colleagues and i found that was so interesting. every single thing they were telling us they needed to do was echoed in what the governor speaking to in terms of care coordination and they were proactive in looking outside the four walls and making sure they thought about a person's house be on a hospital, beyond a doctor's office. so having said that, i would like to explore that issue a little bit more, especially as clinicians have both of you see the movement from fee-for-service moving towards more of a proactive approach engaging patients a little bit more outside the walls of what we picture now as being the health care system. >> ladies first. >> again, there is no doubt -- as we look towards the future we talk about what is sustainable, how we actually going to be incentivized and rewarded for values versus volume. to elegies certain has a place to serve and not and i think it is an enabler to all of the things were talking about. so when you talk about which you mentioned earlier, how do we keep a patient out of the hospital and prevent them from being readmitted time and time again. if you look at technologies into the future, we think about monitoring technologies as a way for patients to be engaged. the average patient today is about eight minutes. an eight minute to discuss about diseases, a variety of treatment regimens and happiness medications that turnaround. they don't really roll off the tongue for a lot of patience. so if i can give them tools that help them to go home and digest what we talk about, to understand what i may have reviewed in 20 seconds or less, they will be better able to take care of themselves. and i is a physician will do a much better job at taking care of my population and having some of the quality match irks her medical records and other technologies. i'm also going to know how i'm doing at all be held accountable to my patients and being able to understand better why they were in the hospital, what worked, what didn't and if there's barriers that i didn't think of like the air conditioner that could've come a long way in that eight minute visit. so if you think about the future, i see very much an enabler to overall train to build. >> so i would go bad house i.t., authors of new technologies, whether it can monitor at home or get patients increase compliance and engagement, all of those are necessary, but not proficient and they are part of a multiple change that is going to be absolutely critical for the system. and they make sense only in a system that pays differently and paste to keep patients healthy. you know, just to take one simple example, i vividly remember we used to send patients out, especially patients with chronic illness, but the stack of prescriptions like this and expect on the one hand to get them filled and then to take four or five pills a day or three times a day, knowledgeably and reliably. and i can tell you, you know, no one sat back and said that's idiotic, right? and no one sat back and said, is there a better way? a lot of patience don't even fill the prescription. and many of them don't even take them come even when they have them. is there a better way? can we get the medications to the house so they don't have to take the initiative to fill them? can we actually get done something that will help them remember when to take the pill somewhat pills to take and how we have a lot of companies developing different ways that dispensing pills and the pill jar tops of the alert patients, so they alert the dock or set the pills are taken for the pharmacists opposed to getting most of the patient doesn't have to refill them. they'll come to the house. these are the technologies will begin using. do we know how to use that you're topical beat? no, that is part of what these experiments will do. you will not have this about legislation without waivers to really try them out, recognizing that patients with chronic disease are costing us a lot, where we have physician quality and where we need to really focus this care coordination model better. and i think that is going to be pivotal. a lot of it is going to be with technology, but a lot of it is going to be people. it's going to be forming relationships are patient trust when someone calls that the opponents as i noticed her weight is going up because you have a wireless skill at home and here's how i would adjust your medication or here's what i would do. or are you eating right? for you taking a diuretic? i think that these transformations will be critical. i completely agree with the governor. it's important to start somewhere, but unless you get a a sufficient amount of payment insufficient number of payers to change, whether it's medicaid and medicare, medicaid at the private system that would be hard for doctors and hospitals to transform their model because a quarter or sameness, three quarters are saying the other way. very hard to make the move. number six and 30% and 60% need to begin talking among direction for the system to really transform. we're getting to that tipping point, places like oregon and in other states, massachusetts, illinois. but we need to have more groups on the public sector in the dirt moving. so i think the discussion the governor is beginning to have is very pivotal to making this a real success. >> you know, to the point about going beyond the four walls of the hospital, it's really about extending care and not just the technology. technology is easy. but it's the people part that is complicated. so again, really thinking outside the box and think about innovation, not just a technology standpoint, but the model of what to look for and how to see differently about what you care about is critical. >> that is one of the things in addition to technological advances in health rockers in the fee-for-service, the other theme that runs through and you can see also from the governor's remarks as well with his leadership is the importance of having strong position leadership at each level. once a state or payer or provider organization decides to implement these with arms, what type of leadership can we rely unto them start start getting the word out from that organization down to, you know, different providers, caring for individuals and down to individuals in an office, such as nurse practitioners another care coordinators. >> i think you're absolutely right. i'll play one of the things that i think distinguishes this period of time from say the period of time after the failure of the clinton health care reform and indeed in the 90s where we did have a moderation of health care costs, which turned out not to be sustained last for about five years and then they came back with a vengeance as i think for the first time the health care system is , really engaged. and the 90s the health care system.doctors and hospitals were mightily resistant with mandatory the government to figure out a new care model. everything was a battle. today, i see when i go out and talk to people at hospitals and physicians very, very different. they recognize the system is broken, they have the care model they are asked to deliver does not match up with the business model in many cases and we are stuck in this gap. but they are very committed for reforming the system and transforming it. and some of it is because -- much of it is because of the affordable care act. they have to do different things and they're getting engaged with. so they are being punished, but now they are voluntarily working hard and trying to figure out how to improve their models. i think the attitude is very, very different and i think the attitude importantly among young physicians is completely different. you know, one of the things as they are raised on technology. the idea that they would've a paper paper record, horrific, right? i mean, they wouldn't know what to do with it. so i think we are going to see a lot more uptake, especially -- and push on the system, especially among younger doctors for this. i would say one other elements, which i do different about is medical schools training and the kind of education we've created has not kept up with these kind of scenes. over the next decade or so, they're going to really have to transform the way they are educating students because it will be a new delivery system. it will be outside of the hospital. it's not going to be all focused on the intensive care unit. and i think that transformation has yet to occur in a thing to be honest and full national discussion of how we transform medical education and that's the kind of delivery system we need has yet to occur. so i would just throw that out there as the oregon health sciences. >> and with that shot out to the governor, would like to bring them back up for some questions and answers please. >> my name is andrew everly -- [inaudible] i'm now working for the ball foundation. my question for governor tranter as we passed out these by wide bipartisan support, but she didn't get into how we do that because we certainly is not an avid ability even in oregon are especially in oregon. just a few years ago, the legislature was lockton cardigan gridlock. just the congresses today somehow in the past two years, you or your counterparts in the legislature were able to find a way to work together to create bipartisan support for things that seem like common sense but in today's congress and in yesterday's legislature didn't work out. i'm underneath you could perhaps provide some insight to how you did that. >> well, i don't think it's rocket science. it's basically having a common vision and broad ownership. so when i came in, the opportunity was in the magnitude of the budget deficit. there wasn't a lot of room to solve problems. we knew we were in a revenue reduction mode and so i just changed the debate over how to close the deficit to how we take the money we have and spend it in a different way to get different results. and i plan on not in the day i got elected, i called the speaker a lax and the co-speakers in this case in the senate president and the budget writing people to the governor's house then i walked through what i laid out. i said where do you agree? pretty don't agree? from day one we were on the same page. we at health care is not partisan issue. neither is creating jobs in the economy. so we created that. we met it almost everyday. i brought into my office and surprise, surprise, relationships blossomed. they were able to demonstrate that solving this intractable problems really depends on the ability of people to create a vessel where they are stressed and common cause. and i'm real proud of what we did. i don't think it is unique to oregon, the refers to leadership and commitment to actually solve a problem. >> very few people few people in the back. >> operas with the institute of social medicine and community health. the example of an air conditioner for a patient with congestive heart failure is a really nice example of secondary prevention. but i am wondering if the state is doing anything about primary prevention and community health planning, around addressing the social determinants of health, not just for patients who are already easily identifiable as i read, but patients are people who are likely to develop a health problem to get a more effect of delivery system. >> and obviously a childhood obesity would be a great example of that. there are reforms are taken on an health care and what were doing and education arena. as you know, our educational system is utterly sidenote. k-12 is segmented to community colleges for higher education. and so, we've had something called the oregon education does the board that creates a single alignment of governance and budget from prekindergarten through higher education and we put a huge emphasis on early childhood because that is where the achievement gap occurs. that is where the huge disparities occur so we developed a performance-based, early childhood delivery model organized run elementary school and areas where there is something called a family resource manager that identifies those families at risk and bolsters the resource they need and that would include nutrition, a host of other things. there's a crosswalk there between health care and education. kids always show up as schools are the hospitals. they scream for pku. they don't scan for socioeconomic risk that nurse. we leverage our resources to the grade of the other parts. under the pinup model, to step aside growth per member per year, if they can reduce the inflow of kids with diabetes are not model, they will have a lot of our resources. so you have to basically come with both of our other speakers come you got to take the paradigm outside the hospital and this is the real health benefits in the community preventing chronic diseases from developing them once they do, we need a community-based method in order to manage them. i'll just say one other thing. this requires a fundamentally different workforce and is very, very important because health care group through the recession. they added jobs in a lot of those shots are people running amorites they did need to be run, insurance papers, duplicated administration. we want to have well paid professionals for help for kids and people as they move forward. >> i think we should divide is a very divide between primary prevention in secondary and tertiary prevention. the big money as i've said over and over again isn't tertiary prevention. people with chronic illness, going through a revolving loop with readmission and other things. it's absolutely critical, especially first of all the longer you look, but also in things like vaccines, which we know save money in relatively short order. but the fact of the matter is most convention, whether obesity is looking cessation or exercise is not in the hospital or to his office. those are help measures which are best done in the community. i don't want to say those are two separate rows because as the governor points out, we are trying to bring them closer. we should also be clear those are not going to save a lot of money in the short term at all. if you want to save money and improve quality and the five year time horizon the governor is under, you really need to think about people who cut his published elements. it's not to say prevention is important, believe me for a country that is really important. but their are two different kinds of activities in two different kinds of situations. the first primary prevention is not affected by changing and payment models. you're not going to change it. i would tell you one last thing, the affordable corrected invests pretty heavily in school-based clinics, recognizing they are very important and useful. we don't have enough of them if you want to know my honest opinion. we've got a hundred thousand schools in something like just over 2000 school-based clinics. but they are very very essential for identifying kids, shortening absence from school to make sure they can get services. so i think this is one area where again creativity and innovation is made possible by the affordable care act. >> you know, the fact is only 10% of your lifetime health as a result of medical systems. the biggest lifestyle to save their will affect your ability to make good lifestyle choices. so to solve the immediate crises, you've got to change the paradigm for treating people with chronic illnesses, the long term for that to be sustained come you have to reduce the burden of chronic illnesses coming into the system. i would argue it has nothing to do with health care, but everything to do with health. that is the biggest paradigm here. the objective is not just financing that akio care to keep people healthy. and if that is the case, you've got to invest as much in community-based systems to get the stripers of population health and essentially, hopefully within two years we will have integrated that for an end piece, which by the way has huge impact in reducing the involvement of the criminal justice system as well. there's a big benefit for those fernand investments. >> and i think we have time for maybe two more questions. so perhaps the person over an aside i think we are waiting for. a >> hi, sorry. jeff sprott, reporter with progress purchased hacking up something mr. emanuel said i was curious how integral the passage of the affordable care act was injured in the project in oregon forward and beat him with the project be able to continue with the alternative plan for medicaid specifically within the republican house budget would be passed into law. >> first answer is, you know, we essentially were designed independent of the affordable care act. but there's no question they're huge similarities in the health care organization in the affordable care act. we still would've been able to proceed with this caveat. it is enormously important that we wouldn't have been able to do that which could've been more problematic and invalid people in the small group market and having both of those elements that are gives us a framework to move forward quickly. whether it's for medicaid approach or the ryan medicaid approach i think mrs. a target by a long mile. first of all it's a global budget, so basically if you have more people coming into the system, because of federal policies that increase unemployment come you actually get less money per person comiskey penalize people have lost jobs in health care through that capped approach. the per member, per year increase gives you the same amount per person and that grows at a fixed rate. secondly, neither of those things you with the fundamental problems, which is the delivery system. they are unique, novel and palatable ways to pay for the same dysfunctional system. it doesn't matter if you have a single-payer system, voucher system if you're paying for those model coming out at the same result. >> last question. >> hi, kate ryan at the national women's health network. we've been working on patient consumer engagement and they scored medicare models that i've really would love to hear a little more about how we are at or again communicating with consumers obviously initially linear payment reform, people think hm moscow which makes people nervous. their success in a lot of smaller models because they are really in the community and they can actually tell almost every beneficiary why they are not given them a test. when they're not getting a test they can perceive that as a refusal of care. i would love to hear you talk about how you really engage patients and consumers in a meaningful way that doesn't scare them. >> well, a couple of things. the difference between the old hmos as they were designed to control costs and often did that at the expense of quality. the other side is clear accountability about access and population health and health outcomes. secondly, their local organizations present cost savings are shared within the organization. they have to have a structure that includes members to try and get the drivers of population and we are setting up consumer advisories to the governance structure. those are just getting set up and we are looking for resources to ensure those are meaningful venues to engage in community members. finally i would say these are built around a whole range of mid-level providers, including health workers and family resource managers in early childhood and their whole emphasis they get the right message. we are very well aware of that and this won't work they are successful in engaging people of different communities in this process. >> so let me talk about a couple of things. the first is if you remember back to the 1990s, managed-care had a very simple model. we have too many beds are paying doctors and hospitals too much. so you negotiate with only few hospitals so they expenses go down. this model is very different in incentivizing a whole different way of caring for patients and began trying to keep patients healthy and keep them out of the hospital in god willing out of the.yours office also. i would say it for being honest about patient engagement it is the watchword for everyone and it's absolutely vital because again, patients spend most of their time if you have a chronic illness or something, most of the time away from the hospital and doctor. we need to get patients invested all the things they need to do. sticking to the diet, exercising, measuring what their rate is every day and charging it and giving back to the doctor. but we'll have to be honest. we don't have the best way to engage patients. we don't know electronics, with family support or visits from the home health aide works. we have to try out and i would read if you look at what are soon going to be 16 different cco's, 15 cco's, you are going to see a variety of ways and again, we need to be prepared. not everyone is going to succeed outside the box. they'll adjust halfway through and that is a good thing. we can't only run experiments when they're all going to succeed because we'll never run an experiment. >> these 15 cco's, we are meeting every six or eight weeks of the ceos of the cco's around a table we have dr. birbeck last time and essentially ideas to learn from each other and recognize some of these may not work and if they don't, you know come you don't succeed unless you try and we can't be risk-averse. we just have to learn from the mistakes. if you create a culture, you have a lot greater chance of finding experimentations. >> we talked earlier about leadership and i think your question is fantastic and that we don't ask the commission leadership or policy leadership. at the end of the day, we really need on the ground, real-world that's driving a lot of this. that's where patient engagement is critical. it is also a paradigm. those out there in the workforce. i mean, every resident of request comes in with a smartphone of smart tablet. if their attendants don't know how to use a bit then come i can tell you is a little bit of respect, right? and same on the patient side. being able to show to engage and help them understand, that's really what were talking about. it is how are we engaging providers and people on the frontlines. we don't have it all figured out. but it's really important that the government is doing. >> will thank you all very much in thank you all for joining us. it is very interesting. [applause] >> in just over two weeks, the first of the presidential debates live on c-span, c-span radio and c-span.org. watch and engage. coming up tonight on c-span 2: >> new supreme court term begins on monday, october 1. tuesday, tom goldstein of los angeles times supreme court correspondent, david savage previewed the court's near-term. from the cato institute in washington d.c., this is an hour and 15 minutes. >> our conference concludes with a look ahead to october term 2012. the court's docket as today is a bit sparse, but not without past indeed were it not for obamacare nsp 1070 cases, you could say this coming term would be the term of the decade. in its first two sittings the court will hear cases on international law, property rights and racial preferences in higher education the fourth amendment as well as the follow up to the class-action blog buster from a couple years ago wal-mart versus dukes. cato has filed briefs in all these cases while in other petitions that if granted would become high profile as well your challenge is to section five of the voting rights act in scope of the treaty power, for example. another multiple domain cases for gay marriage. if you aggregate in a breather in search of disappoint you. we have the author of this year's end had a say in the review is a partner at williams and connolly worries focused on supreme court in a publication purity circuit 11 cases before the supreme court, more than any other lawyer in the firm's history except his legendary founder, edward bennett williams and a number of areas including security and i trust in criminal law. born and raised in lawrence, kansas. go jayhawks. ken and received his a.b. from harvard, and let from oxford where he was a marshall scholar and jd from harvard where he was executive editor of the lab review. he clerked for supreme court justice antonin scalia and judge jay michael did it on the court of appeals for the fourth circuit and james l-lima connolly in 2008 after serving to the solicitor general. most importantly he's microfine spots. [laughter] tom goldstein is a partner at goldstein on russell. until recently was known as goldstein howell and russell serino after leaving tom's first power play was to remove his wife from the letterhead. [laughter] 25 cases be worth supreme court spanning a broad way of issues. he teaches supreme court litigation at stanford and harvard last close in 2003 of course not as good a spot from which makes my job so much easier than in 2010 they can build black ever to receive the aba's silver gavel award for fostering the understanding of law. among his accolades come in the national law journal named him one of the 40 most lunch with the decade of the all-time sanctum of the 90 greatest washington lawyers and gq did them all one better by naming him one of the 50 most influential people in washington. so we are an company. the law journal named him one of the leading players under 40. the american lawyer into one of the top 45. you see where this is going in 50 years we can expect international law to name him one of the top 100 lawyers under 100. [laughter] 40 years ago he was one of the five lawyers under five. last back and finally, david savage has been the supreme court correspondent for "the los angeles times" since 1986. working out of the paper's washington spirit he's had an excellent vantage point from which to observe the action, decision and changes over three decades. as for taking up the court, there were times education writer based in l.a. he is author of the rehnquist supreme court which covered the ethics of the reagan and bush administration to remake the high court. he also writes a month the column and offers regular legal commentary on the talk of the nation. david for good or ill is not a lawyer grew up in the pittsburgh area and holds degrees from umc and northwestern. we'll start with ken. >> well, thank you. it's great to be a cato to talk about the upcoming supreme court term. i guess a birdie had one mystery solved because now we know why ilya board this zoo today. i don't think much of that because your suit has to be visible from outer space in order to be a contender. [laughter] but in any event, here i was thinking i was somehow privileged to be asked to write to preview for the supreme court reviewed this year when in fact i was simply asked because they happen to be ilya's girlfriends boss. in any event, notwithstanding that it was indeed a privilege to have the chance to write the preview with my colleague, jamie mcdonnell who clerked for the chief justice at go years ago and i certainly commend itu and i can assure you that is because of jamie's good work and not because of my own. but in any event, ilya did ask me to talk about the criminal docket this year. i'll be relatively brief because at least as of now, the courts criminal docket is relatively limited. let me just say a word because i am the first subsidy speaker about the upcoming term because i really do think it has potential to be a very interesting term. i think last term in many ways was somewhat unusual term because perhaps never in the modern era has a single case so dominated the attention given to the court as was true with the health care cases and of course i know you've heard a little bit about that over the course of today to hear a little more in the lectures to follow. do you know, it really was kind of those remarkable episodes in the course history. you know, i was sitting in my office the afternoon of the oral argument, listening to the audio of the oral argument on the second day, the big day when the constitutionality of the individual mandate was discussed. i happen to open up twitter on my computer, one of the relatively few social networking sites to visit blocked at my law firm. you know, if you type in health care for solicitor general or any sort of rather than keyword, they would just be hundreds if not dollars and i've had in stuff coming up every few seconds. it is really hard to kind of think of the supreme court case because the health care cases really were the first major cases about not into that at least in the kind of internet era and certainly probably the biggest cases with the exception of bush versus gore over the course of my own career. so when talking about next term, there is enough to the flood and of what is going to come next. i think what will come next re series of quite and showcases. i'm not sure any of them others of full measure to the heart care cases in terms of the level, but there are cases on affirmative action, same-sex marriage and potentially other issues that i think are going to definitely be front page stories for david and the course of the next year. i am not sure any of the cases i am going to discuss quite rises to that level. but of course the night is still young and the supreme court has still a little bit less than half of the docket for the coming year. so to some extent this is going to be a exercise in the world three of us attempt to book in addition to the cases argued they are. i am going to focus primarily on the fourth amendment. as someone who has argued for the many cases in the court in the past and is therefore perhaps pay particular attention to that corner of the court's docket, it never ceases to amaze me that the supreme court finds seemingly every year at least two or 34th amendment cases to put on its docket. not to be sure, the court sometimes will confront issues involving the application of the familiar fourth amendment principles to new technology appears to leicester in the supreme court had the united states versus jones case commotion while gps tracking devices. i'm not sure anyone under the case of wordy who uses gps technology is a new technology, but it supreme court's standard to qualify in there is at least one case potentially on the end that involves a new technology. in terms of the first amendment cases already on the court's docket, and to get it's fair to say often involves old technology. i guess i promised i would slip and at least one canine joke, but i think this is the year the supreme court goes to the dogs because the court has no fewer than two cases involving the application of the fourth amendment and then perhaps an intentional or unintentional act of humor as the clerk's office has said both of those cases for oral argument on halloween. so the court is going to have a fourth amendment day on halloween with these two cases involving dog status. the further familiarity as these two cases both come from the state of florida. they both come from the florida supreme court. so the state of florida is the petitioner in both of the cases the court is going to hear. of those two canine cases the cases probably of greater interest in florida versus jardine, which involves the question of whether the police can use a dog to sniff the exterior of a house. i believe it is literally sniffing the front door of the house of mrs. dunn of course to determine whether or not there is contraband in the house. it's kind of an interesting case because it involves the intersection of two basic principles. it is pretty well settled that a dog sniff ordinarily does not constitute a search and thereby -- therefore does not require any additional level of individualized suspicion and a series of cases involving searches in public places, and supreme court is still held. so with a dark and fed to you as you're waiting for your luggage and make it simpler for fourth amendment purposes as you wait for your luggage from the domestic fight, a dog can come up to you and smith era luggage and of contraband is found, you potentially will be subject to arrest. the question in the case is whether that analysis is different when the home is the context involved. and some of you will recall that the supreme court called kyodo 10 years ago is the use of a dermal imaging device, a device used to seed, which is potentially the growth of illegal substances within the house does constitute a search for fourth amendment purposes and that was the written by an interesting word justice scalia joined the corps' so-called liberal members in reaching the conclusion that that constitutes a search because of the enhanced nature of the technology. and so the question presented is really which of these 24th amendment principles is going to be controlling. it is controlled by the general principle of dogs that better okay without more, or is the fact is being used in the context of the home sufficient to render the analysis different. the other dog case is a case called florida versus terrorists were presents a somewhat more technical question about kind of the degree of qualification that a dog has to have in order to give rise to probable cause. so the question in that case is whether sufficient to kind of present a certificate, kind of the equivalent of a doggy diplomas that indicates a dog has been trained as reliable or whether the government has to make more detail showing promotions at the what the florida supreme court required. those cases will be argued back-to-back on halloween. the other cases on the court docket is actually case i will be arguing on behalf of the defendant the day before. so it is going to be not just the fourth amendment day, but fourth amendment week at the supreme court. it involves one of those questions you might have thought would've long since been settled, but in fact hasn't been as the existence and the court of appeals that indicates. it involves one of the relatively few categorical rules the supreme court has under the fourth amendment principles a case called michigan versus sommers, which held that police have the authority to detain the occupancy of the house and search warrant, regardless of the degree of individualized suspicion during the duration of the execution to conduct a search. that is the root of the supreme court adopt it because of concerns for officer safety and out of the desire to ensure the quarterly completion of the search. well, our case, billy versus united states present the question of how far is that rationale extend? and so, in our case, the police were about to execute a search warrant in a house. saw two individuals surveilling the house, seemingly undercover when they saw these individuals leave and receded to follow for a mile away from the house to detain the individuals and to bring them back to the house, invoking the rule of michigan versus sommers. the question is whether the justifications for the categorical rule, support an extension of the rotary situation for the individuals were detained away from the house and really before the police commenced the execution of search warrant. as with all these cases, i would really send you to tom's blog if you're interested in the cases in greater detail, you can find briefs filed today. the cato institute filed an amicus brief compared by catherine carroll and others that supported the position of our clients and argued they got the ax is extended to the situation. there is yet a fourth amendment case that could potentially land on the court's docket. this is another case in which we are involved as cocounsel to the public defenders office. it is a case called maryland versus king and at present the application of traditional fourth amendment is supposed in the evolving context of the collection and testing of dna evidence. this is a case involving the maryland statute provides for collection and testing of dna were individuals could have been arrested, but not yet convicted of a crime for purpose of investigating other crimes. so in this case, our clients, alonzo king was arrested for assault. his dna was collected and tested in that evidence was used in connection with the prosecution for a rage. the question is whether that was permissible under the fourth amendment and an issue that presents a number of interesting subsidiary of fourth amendment. the court appeals the highest state court held that there was a fourth amendment violation in this case. the state of maryland has filed a petition, which we have not yet responded to come up with the justice did issue a stay pending the disposition, which indicates there was chief justice and there is fair probability the petitions for review will be granted and without giving too much of a preview of what we're going to say in our response, i would just say that there is some degree of disagreement in the lower courts, but it is fair to say there has been relatively little written at the level of state supreme court's federal courts of appeals on a specific issue. there's actually a case to be argued en banc in the ninth circuit tomorrow that presents similar issues, so i think it's fair to say the law still developing in the lower court. the only other thing that would mention quickly as they were two cases on the docket that presents an issue of some practical significance, which is whether capital defendants have a right to be cognizant during habeas corpus proceedings. the cases are brian and tables. they are also going to be argued back-to-back and will be argued next month. the supreme court has held that there is a right to essentially be confident at the point of execution. but the supreme court has never confronted and of course there is a right to be competent at the time of trial the supreme court has never spoken in between. everything i've been sixth circuit tell us if there a right albeit resting on very different grounds. i think as a practical matter, those are reasonably significant with that, i will hand off to my colleagues to talk about the civil part of the docket. [applause] >> thank you, so much. it's always a great pleasure to be here at cato. i like so many people before me congratulate cato for putting on such a wonderful event and running this panel and this fantastic facility, which is my first opportunity to visit. if you're watching the video coming should definitely come see the real thing in person. i am going to talk about the business docket. while the criminal docket can touch those of us who are criminal defendants, which is only half of us probably. for those of us who care about our relationship with the government when it comes to individual privacy, you know, when can the government have a dog, it is relatively less common that the business cases touch as so individually and so personally. and so i'm going to cover 10 cases. six cases for her possessions and melted in the relatively summary form because the main event is not only what canon talked about, but the big interesting cases david is going to talk about. so a friend this docket so you have a sense of what is going on and the assumption that a lot of these cases won't have an immediate direct on my legs. i will give u the key about case so i'm going to describe for you the allegations of the complaint and if this is happy to come to raise your hand and we'll talk at greater length. the plaintiffs alleged that an overseas oil company conspired with the military of nigeria to involve the nigerian government and kind of putting down the opposition. if that is happening to you -- that was kind of my guests. the alien tort statute says that aliens can bring tort suits is a really old statue. and the basis for the lawsuit has to be a violation by some party of basic international law or treaty to which the united states can subscribe. the court of appeals decided this case, which is the nature is versus the overseas oil, any on the ground that the statute doesn't apply to company. the supreme court had agreed to decide last term the interesting question. that is can you bring these companies in the middle of the case it became apparent there was perhaps a bigger issue in that case and that is those that apply territorially because this is the case by foreigners against something happened overseas. the supreme court was asked to decide if the statue will be an ordinary presumption in america not that american law applies to stuff that happens here in congress want that apply to stuff that happens in other places are exclusively happens in other places and says so expressly. the supreme court a few days after oral arguments that we are going to start again. come back next term and they will hear oral argument this term on the and if it decides, then i will decide whether to your about the ats applied to company. the obama administration has filed to believe untreated brief that says maybe. it says that at least when it comes to a suit like this one guy which involves an allegation by foreigners, against a foreign other than a conspiracy allegedly appalling nigerian government that have been entirely overseas, that the statute should not reread to apply. walking back, there are positions sometimes they apply to overseas territorial conduct. so it is not clear what kind of supreme court will draw. they differ a lot to the position in cases like this because they involve the foreign affairs relationship that the united states and certainly will be important. it seems unlikely they will prevail in the supreme court on this allegation, but it is an important controversy that a lot of companies face. not a lot, but a figure amount of companies face human rights lawsuits and this is going to be the supreme court case that decides whether it's going to go forward. the supreme court is going to also take a d. out those of the famous wal-mart versus dukes case. wal-mart was most famous for the question of basically can you have a class-action but involves many hundreds of thousands of people there. female employees of wal-mart supervised by lots of different people in lots of different stores. do they have the commonality to produce a single class actions that you can litigate all of your claims against wal-mart together. that issue is not going to come up this term the supreme court, but there is a piece of wal-mart and that is the supreme court in the wal-mart case had a kind of pointed in the direction of there are more varied type issues that should be decided at the beginning of a class action rather in than the weekend. so just a detour about class-action procedure, what happens is under rule 23 code of civil procedure, you decide whether or not this group of people that are supposed to be the plaintiff has a common enough set of issues to justify them all in getting together. defendants. these class actions because they produce the possibility, potentially inducing large settlement. sometimes it can be unwieldy, but sometimes incredibly important for civil rights litigation. the two following cases are engine and comcast, the case of a security litigation. it is the case that is that securities litigation and the idea here is you can have a said even though each individual investor any company may have to prove his or her reliance. i saw some misstatement by the company and therefore about the stopper didn't sell the stock. even though that might be regarded as an individual facts rather than a common fact to litigate under the motion of an additional market to allow the courts to assume that material information that goes out into the marketplace will be relied on by potential investors and that allows the cases to be litigated on an aggregate by all the investors securities fraud cases rather than each single investor to finally securities fraud case. several things should be decided by the judge before the class action gets underway, including whether there is an efficient market. the supreme court is taking up in this case the question of whether the misstatement made with material. should that be decided at the beginning of the case are later in the case that can make a big difference. the more th defendants can force the courts to decide early on rather than later, the better chance they have of cutting off the class-action at the beginning. same sort of deal in the comcast case. on behalf of the plaintiff in comcast and the question is this is an antitrust suit. they challenge comcast dominating the market in around philadelphia. the question the comcast case is before certified should the district judge be deciding whether there will be classwide damages. can all the people in the class receive damages on the common basis or should the case be litigated on an individualized basis. these are follow-on import lawyers cases further proceedings in class actions which are significant. another antitrust case is again on the question. have any of have any of you and so the the countywide hospital? >> the question in that patenting cases when the state gives the county the power to create a hospital. very common. is it thereby conferring antitrust immunity? the ideas the supreme court has said there was a big federal antitrust law, but the state itself passes a law that creates a regulatory scheme that would be anticompetitive. they do not require competition all the time. sometimes they require competition. then the resulting activity may have state antitrust immunity. the question here is when the state says to a county come you can create a hospital system, is it thereby creating nhs community at the hospital system integrates itself in a way, is sold in a way that creates a monopoly in the local area? moderately important question. something a little bit closer to home perhaps is the advance case come a civil rights case that arises under a lot of civil rights statute and that is supervisory liability. the idea here is that you are going to sue your employer, you can sue the employer for something that management does, but she can't sue the employer for something a coworker does to you because the coworker does have responsibility. maybe their own individual action is not company policy. in between those things their supervisory liability that is the company can be held liable for its officers to direct the opposition of the employees. the question is what is the need to be a supervisor? does it have to be someone who can hire and fire and supervise? for example, is the supervisor of ilya's girlfriend because he can fire her so we should all be careful about that. [laughter] but what is it -- what kind of authority is required in order to trigger the supervisory liability. is it just so they can tell you what to do, or is that more direct ability to control every aspect of their lives, happiness and really their future in the firm altogether? that is the issue. >> tom thumb over the last 30 seconds they been paying a lot closer attention. >> and so have your other partners, corporate liability. >> i'm just waiting to get to the orissa case that everybody else in the room. >> the case which i hadn't even planned on talking about, but it's so exciting. it is called u.s. airways v. mccutcheon. you are a member and you may already know you're a member of the plan. you're the help benefit plan, a pension plan that usually comes up where you are injured, you can't help on offense, but then you sue someone who is responsible because none of us actually cause accidents. the other person is at fault and we recover some amount in a ferment. the question in u.s. airways is the ability of the plan to recoup that money from you in particular in a situation where for example you get a 20,000-dollar recovery, bashir lawyer as the constitution requires takes most of it. your lawyer takes state only an 80% contingency. and so, you have $4000 less. the u.s. airways and the system, take the whole $20,000 from you as recoupment even know you don't actually have all that money. that is the famous case. >> the answer is the u.s. airways lawyer gets that. >> all these things and with a check. the last case i will mention on the docket before turning his arkansas game and fish. i ask you again, do any of you all have tens of thousands of acres of land that are flooded on a recurring basis by the federal government? okay, this is an unusual audience. the question is what is the supreme court doing? the question in the game and fish case is the constitutional principle in the cause because the government either physically or through regulatory action can come and take her property so the fifth amendment requires they pay us. it is disputed whether the government has actually taken the property. this is an interesting little puzzle. every year for the past six years various government projects have flooded this land. dennis waters what to do, goes away and in the next or comes back in the government says when the water goes away, you can have your land back. we only take her property when the water either stays they are or put a tank on it. until we've really come along and take in the thing. all supreme court cases have language and then to suggest permanent flooding is the only thing that will trigger a violation. the position of the petitioner says basically come on. every year we come along and it's like eight feet of water because of the governments product and they have taken her property. before pending business related petitions. one is one where canon has filed an interesting and important petition. i represent the respondent on behalf of truth. [laughter] >> the issue is as follows to knock it the context because of the tumor of the context. there are drug companies have patent with a lot of money in getting their plug-ins to market. there is a team that encourages generic drug companies to challenge the validity of the patch into whether the products that infringe the patent. these disputes like many get settled. they are settled in a somewhat unusual way sometimes with the brand name agreed to a number of fat there is including a payment to the generic company to differ as a result of the settlement defers into the market. at what point into ethics and are they subject to any scrutiny or not. the theory being the very notion of a patent is to exclude competition. there is nothing unlawful. the story of the other side is while you are really going beyond the patent right because the patent is challenged here and you're preventing competition. and so canon says in the court of appeals has said various observers have said that there is a circuit conflict about that question and this is a question the supreme court has seen several times and they may step in and find that this year. three other cases relatively quickly. rjr has a surreptitious about the rules for definition and patent law. there is a standard of the federal patent statute. you have to definitely explain what it is you have a patch and four. the reason is so wide as someone who might make a similar project will know what it is that i can do and i know what the invention been created. the rjr says in his case at the standard, federal circuit jurisdiction of these cases apply to be definite and reprehensible. we have some sense if we had a trial we could figure it out and that's not good enough. there's a very interesting theoretician à la die a statute that says if you're going to get aids funding, you have to have a policy that opposes sex trafficking. one would think that would be not that controversial. i don't know a lot of organizations that are let go sex trafficking. but it does raise a first amendment question of whether the government can save you, you have to express a particular point of view or whether that's okay because it's part of a government spending program. the last case i will mention is the mount holly case that i had done last year, but was resolved in the other side gave up. not for any reason having to do with me. the question is under the fair housing act, which is a major civil rights legislation that deals with how it is that you sell housing in the country but often invoke to allege that lenders are only offering particular rates to a particular neighborhood and also to people of particular races but there you can bring the disparate impact claim under the federal fair housing act is the difference between a disparate impact claim and treatment claim is that is discrimination where you have some policy that has adverse affect of a minority and even if you didn't intend, not the less what you done is illegal. they were anathema to many conservatives on the supreme court, which it turns out is all you need. they've not consider the question whether it's available under the fair housing act. the current business docket. thank you very much. [applause] >> thank you. it's good to be here. i had offered to arm wrestle tom over at arkansas game and fish, but after talking and realized he was so heavily invested. same with canon and the dog sniff cases. they have left for me the important cases involving race and, so thank you, guys. there is a big college affirmative action case. you probably read about it. this is the latest iteration of an old question, can the government come in this case a state university gave an advantage to a student because of his or her race, to give sort of advantage to black or hispanic students in the interest of diversity, changing the university orders that violate the rights of the civil rights student that says i was denied equal protection of the law. the interesting twist in this case in which you really should watch is the question of a so-called race neutral alternatives. about 15 years ago, 1987, a federal appeals court in texas had said, you may not use race for affirmative action at the university of texas. the state legislature coming mexican-american women sponsored a bill, signed into law by then governor george bush and said the state is going to grant automatic admission including ut austin said the top 10% graduate in all of its high schools across the state. this really transform education in texas. now, mexican-american kids in the rio grande valley come african-american students in houston or dallas, moral white kids across texas suddenly had an opportunity to go to ut austin. over time, the percentage of minority students coming then steadily grows. those kids getting in because they did very well and has cool. in 2004, after the supreme court had narrowly upheld race-based affirmative action and the university of michigan case, texas announced that they were going to go back to using for a very limited part of the class. only a quarter of the freshman class. students come in under the race neutral plan. one quarter came in under this holistic review but they said they will consider a whole lot of pain. we want to have some discretion to pick our student and university said if we get a kid interested in architecture or music, we want to deal with kid. so they are now defending the use of race for a limited part of the class. so this is how the case arises. after this happens, a young woman named abigail fisher was in 2008 a white student, sugarland tech says, a good but not -- good grades, but not excellent grades. she didn't get the top 10% of her class. she's the kind of student that could've gotten in, but as i said was turned out. so she sued and says i was discriminated against. i wouldn't think she would have a strong claim, but she is able to say texas is a process where race plays a role and therefore i was discriminated against. the fifth circuit, the federal courts upheld the texas policy because they said the supreme court is 37 the mission case you can consider race in a very limited way. texas is doing that. the supreme court then granted a really interesting case because the middle vote now as justice kennedy. used to be justice o'connor. she is gone. justice kennedy has descended in every affirmative action case, every race case. but he said in 2003. >> they acknowledge them uploaded the problem. >> yes. he's opposed any use of race. in 2003, he wrote that he could accept justice powell's notion going way back to the university could consider race as one modest that year. but then he said before we approve a race-based admissions scheme. that was his phrase, we should seriously force universities to consider race-based alternatives. i'm sorry, race neutral alternatives. so that is essentially where we are now. here is a situation where texas has a race neutral alternative that has brought a significant number of minority students in. the university is saying we should be able to go further and consider race. one thing that surprised me when i was in texas and talk to people about the case is that overwhelmingly, that minority students come in under the automatic admission. it's been nine out of 10 in seven years. and in 2011, 36% of the kids who came under the automatic debit were hispanic or black. under the holistic view, there's 17% or 18%. so minority students are doing better under the automatic review policy. i don't know what the court is going to do, but if justice kennedy says some and mike as a university cannot have a race-based affirmative action plan is a race natural policy could work. that could have an interesting impact around the country. you could write an opinion that if they texas only case. some people say texas is the only one that has had this much success. it is the religious interest to watch in that case. the other big race issue is the voting rights act and section five. you know what this is about weird since 1965, this outcome essentially the south has been under scrutiny. you can't change your election laws to voting rights laws until you get a preclearance of washington. the question is that policy so updated and so unfair to the southern states that it should be essentially struck down. the five justices are going to be inclined to think wait a minute, indiana, pennsylvania wisconsin can pass voter i.d. laws than those of us can into effect, even though they may have a real impact on poor and minority voters. south carolina and texas have been blocked from having the identical laws. it is going to be hard for defenders of the coverage formula, that is the formula that says only the southern states are under this rubric to defend that when it seems that ohio and pennsylvania have the same sort of voting problems that texas or south carolina does. the court has a couple of pending cases coming their way on that. i think the general view is a wizard to hear one of those cases and i would think there's a better than average case that it will be better than limited or struck down or something to say it is outdated. the other big case that we are pretty confident they will take is the gay rice and the defense of marriage act. this is not a question of whether gay can marry in the states. the question isn't states were gay marriages legal to those married gay couples have a right to equal benefits under federal law. the first circuit court in new england acting on a soup to die several gay couples in massachusetts. they were legally married in massachusetts, yet they can't file a joint tax return. or if one woman works for the postal service and her spouses at home, can she be on that health care plan? this is a question of equal treatment for illegally merry gay couples. it is very likely the court will take this case and it is very likely that justice kennedy in the more liberal justices and who knows who else are going to rule that says this denies these legally married gay couples to equal protection of the laws. and as i say, nothing about five necessarily says whether they have a right to marry in mississippi or nebraska. this only those states where gay marriages legal. that's one of the interesting important cases because another thing to watch for is the supreme court is never exactly said what is the standard of review when there is discrimination against gays. they may be qualified to say something about discrimination against gays unconstitutional and so that's another thing to ask for in this case. the defense of marriage act will decide later, later on in this term. so i think i will stop right there. [applause] >> to have anything else to add before he moved to questions? >> is probably worth venturing as a coda to what david just said is the petition before the supreme court on the constitutionality proposition 8. this is the challenge in which ted olson and david boys represent a couple -- a same-sex couple who wish to be married in california in that case were squarely presents a question of whether there is a constitutional right to same-sex marriage and just happens to be more or less the same timetable of these cases involving the several and it is going to be wish of all these cases the supreme court takes on whether the supreme court might, for instance, take one or more of the cases involving the defense of marriage act and hold proposition 8 k.'s pending the position of these cases and whether the supreme court is just going to let flowers ltd. all of these cases together. we will know the answer to that reasonably soon. >> my personal opinion as it is less likely to be taken because reinhardt, the ninth circuit wrote it in a manner of california and specific case so it's easy for the justice decide if they want to to dodge the bullet right now, it's a big input. questions? i should announce before and immediately following questions we will move straight to the simon lecture, so please stay in your seats at that time. questions? >> manny causer for the foundation of the individual rights foundation. i have a question for any of the panelists who want to comment and this is, what impact do you think would be made in some of the amicus briefs and some of the party briefs about the work of richard sanders in ucla showing the impact of allowing students who are affirmative action admits he's come a whether is because they are racial or sex based entities, that if their gpa and s.a.t. scores are significantly lower than their colleagues in the class, the odds are many of them will drop out, flunk out or do very badly. so there is a new empirical showing that affirmative action is may be paid a hughes price because it lets them come in without the qualifications of their peers is counterproductive and they do less well than if they went to a second tier school not quite as good as the university of texas. >> does anyone want to comment on that theory? >> there certainly studies that would make some people a little bit skeptical of affirmative action cg, this is not even helping the kids it is supposed to help the reason it doesn't make sense is there a five affirmative action already on the supreme court, several defenders. i don't think you will change much on the supreme court. >> i read a book called mismatch by stuart taylor and richard sander, but i would tend to agree that it goes against texans almost -- [inaudible] >> the only other thing i would say not quite the nature of the question but i will say it anyways that is interested in looking at the brief, just how clearly they are targeting justice kennedy, given the fact that kennedy at least certainly not in recent times ever voted to sustain an affirmative action program. someone tell me there's something like 50 name checks to justice kennedy in the party briefs alone. so clearly, people are picking up on language from his opinion in greater andres alternative neutrals. so for what it's worth, initially hesitated to make reductions about the supreme court cases. .. the court is [laughter] more questions? another in the front row? >> very quickly on the defense of marriage cases coming up. will the full faith and credit clause be impacted or all or will it be a matter of federal benefits. >> there are two parts when it was passed in 1996, all the talk then was then was the question of the fear that if one state has gay marriage that all the others are going to fall like dominoes. two guys are going to get married in boston and go to baton rouge and you need to honor or marriage. congress defensed the pass of marriage act says states need not recognize same-sex marriages from other states. but that issue is not being challenged in this case. that part of the law stands. this is only the federal benefits part of the law. >> i have a question about cueble, tom. i don't know if you care to speculate about why harled, the state department legal adviser who signed the first brief for the government in the case on the reargument on the supment tal wreef briefing, his name doesn't appear. do you think he's making his way back to academia or degrees minutely. >> it's one of the inside baseball washington, d.c., sorts of things where on -- the solicitor general's office will file the brief and it will be signed by the solicitor general and people in the office and agencies and department of the executive branch that are heavily involved in the case will frequently sign the brief as well, and was mentioned when the came around the first time, the state department signed the brief, and in indication of the state department a believing that the foreign policy were complicated and they agreed with the brief that was filed. now the importance of the case to international relations hasn't gone down. the ready inference from the fact that the state department legal adviser not signing didn't sign on to the brief said the state department or the legal advicer doesn't agree with the brief. it's an inference no matter how powerful. [laughter] >> let us know when you get it. [laughter] >> my name is [inaudible] i'm from the capital strategies. i have a question about the voting rights act, and then any of the former . >> i am very, very . >> i claim them if not, no longer here. >> i have a question about there's the gentleman talking about imperial evidence and shelby county, the judge williams in his defense -- i thought laid out pretty powerful empire call evidence as to the formula that was used in the criteria dating back to 1973 and there's no fit anymore, and that was not convincing to the d.c. circuit. i was wondering for there's any prognostication that would be more convincing to the supreme court? >> yes, it will be more convincing. >> it's also -- its a cousin of his question about the evidence when it comes to affirmative evidence and the justices have seen section five a lot. justice kennedy has written a lot about it. they have strong views to begin with. i agree it will be more persuasive. it's conform story of a felt sense for many of the justice, the list of the jurisdictions that was created in another era and when congress reauthorized the voting rights act the section five for 25 years oddly the list seems a lot like the old list, and there may be a mit as well there. for the justices and there are likely at least four woo believe in the section five procedures, i don't think it's going change their mindses. i think it will confirm the view of the rest of the world. >> section five and the voting rights act has an historic impact. i think that's the main reason congress has never quibbled with the formula and the supreme court stops short of striking it down three years ago. that was one of the most successful most effective laws in the 120th century that changed a situation where blacks were simply barred from voting throughout the south, and that for so many years, the southern states and municipality had so many tricky -- screams to prevent blacks in voting. it seemed like the only way to do it is put them under the federal scrutiny. but all the years down the road, it is hard to say that the southern states are totally different than ohio and pennsylvania. i have to write about this a lot and it's hard to explain -- a couple of weeks ago there was a decision involving florida. in florida there are five counties in florida that are governed by section five, and 62 counties, the rest of the state are not. so -- there is a situation about cutting back on early voting in florida, the legislature cut back on early voting with the days for early voting. you could argue, and the court agreed with this, this court would have an impact on minority voters who voted heavily in the weekend before. but the the court that handledded the case basically had to say and writing it, i had to try to explain it, the decision actually only affects a couple of counties. you would be hard pressed if i tell you what they were what's the common theme. one big county, hillsborough, in today's world, it seemed like it made either all the state and maybe the whole country should be under this special scrutiny if you're going come with up the laws that seem intended to disfranchise poor people or minorities, or you should lift it that none of them. it's hard explain how this current formula can stay for another twenty five years. >> it's a bizarre list of jurisdiction. it's not the deep south or the old con fete sei. six states of the old confederacy random counties and other places three counties in new york state, all before rows in new york city i wrote in the cato's brief there's four justice from got got ham maybe they can explain what's going on in the bronx, brooklyn. >> there are four counties in california. monterrey county. >> i would add one thing on this which is that i think that these issues with the coverage formula potentially give those members of the the court who are skeptical about the validity of section five a more powerful way of resolving the case because they could potentially declare the coverage formula invalid without directly invalidating section five itself and the members of the court who are concerned about the institutional reputation of the the court. and the opinion that say we're throwing it back to congress for you to come up with a new coverage formula. maybe more palatable than saying there's no way of skinning the section five cat. and, you know, i think that is potentially a much easier way fur the court to resolve the case but one that may have the same effect because goodness knows it is hard to get any legislation through the current congress to try to get the current congress to agree on exactly which states and subdivisions and states are covered. it strikes me as a potentially difficult political task. walter weber more american center. >> you mentioned in the opening the scoop of the treaty power. if you're referring to the bond case, could you enlightening the audience on the case and why it's important. >> sure. i was going get to it the next time there was a deter of questions. there is potentially on a petition stage a surreptitious by paul -- the lectures who is speaking shortly. it seems i joke paul that i make a living commenting on his filing briefs supporting his various cases. he of course argues half supreme court docket every year. tom gold seen gets the rest. two years ago, just like tom listed those cases that affect all of us. this is the garden variety case involving federalism adultery, and chemical weapons, right? [laughter] this woman learned that her best friend was pregnant, aye, by her husband. boo. and in instead of divorcing him or arguing she does what, you know, i'm sure some of you might want to do which is get chemicals not particularly novel chemicals. she has access doing her work in a lab. not too exotic or illegal to possess. but she uses these chemicals and sprinkles them on the best friend's mailbox, the door handled to the car other places like this. she's likely to come in contact with. she gets hurt, little chemical burns. she gets charge with, you know, attempted murder, assault, something like this? no. she gets charge bid the trillion prosecutors with violating the federal statute that implements the international treaty on chemical weapon proliferation. [laughter] so the first question of course, comes to mind the first issue that the supreme court has to deal with is can she even defend herself by attacking her prosecution? is the federal government abusing the power by using this type of treaty implementing statute to go after her? and the federal government eventually changed the mind as well. they said, okay, we'll let her defend herself. they issued an opinion with strong language with for justice kennedy writing about the majority. but the structure -- it goes to the third circuit on remand, and the third circuit she makes an argument they are expanding the powers by the treaty without the treaty. it wouldn't be able to prosecutor. in effect by the president signing and the senate ratifying the treaty and congress apparently giving congress more power than otherwise would have, that sounds od young the federal government is supposed to have the power the constitution gives it. that's it. she makes the argument, unfortunately there's a short opinion from 1920s call missouri v. -- [inaudible] it's justice wendell holmes that writes it's not clear exactly it's a holmes opinion, but also it's been interpreted over the years to mean just that a treaty can expend federal power. the third care cut said our hands are tied. missouri binds us. they are reluctant to do so up. one judge writes separately to ask the court to take it up and either clarify it, overrule it, or do something. it's in -- and that being on -- cato filing an amicus brief. hopefully it'll get up there. our brief is based on and written by based on the work of and written by a professor at georgetown who is a senior fellow at cato as well who is has a brilliant article diving deep in the technical keys about what the treaty power is about. how to relates to federalism. et. cetera, et. cetera. so hopefully this will go up and the court will, you know, in roberts minimalist fashion will say, no, you have been misinterpreting oliver wendell momeses we don't need to -- [inaudible] [laughter] there was a hand way back there before. >> alexander, i would like to ask those with expertise in the craftmanship of judicial opinions whether and with expertise on the text of the voting rights ability. if we have any such person here. i'm guessing perhaps we might. whether it is written in a way they can strike down the coverage formula, and leave the rest of section five standing such that until congress acted, the prevailing law would be that preclearance applies nationwide. >> yeah. i think the interesting question i'm no expert either on the craft manship. i'll take a shot at this. i mean, it seems to me that what congress could do or what the supreme court do -- while the ball is back in congress' court to mix my metaphors the section five essentially cannot operate because it cannot operate without a coverage formula. i don't know how it dove tails with it. but looking at supreme court can find a way. >> i suspect there's enough flexibility in the statute to prevent the court do that and certainly in looking at the way the case has been litigated at least to date. there's a heavy suggestion even in the petition that is option one for the court. while congress is attempting to cosomething knowing that remedy could turn out to be permanent if congress can't come up with a new coverage formula. it's an interesting question. it will be interesting aiewming the the court grants review on the section five on the county and the other cases to see how the litigators try to position this as a possible alternative. [inaudible] joe murphy, litigating attorney in washington, d.c. this is a matter that habit been addressed yet, but there are governments beginning to tinker with mortgages and jury was duly sworn lying contracts. has anyone seen any cases of coming up that involve article i section x which prohibits statement impairment of contract of contract clause. i was going to say there aren't any pendinger is petitions. there's is nothing on the brain. >> there are a a couple of cases winding they're way through the courts challenging dodd-frank. it's not unrelated to the question. it's more of a separation-of-powers and a few other thing. they are heading up the litigation effort in one of those -- i think they are still at the motion practice in district court right now. this will be the last question. >> richard with the washington legal foundation. my question generally is about national security cases in the supreme court up until agent 2008, you have a lot of challenges that reach the court since then. there have not been [inaudible] it's the only case they took with was the clapper case in which it looks as though they are going reverse a lower court decision that would favor it. i wonder if everybody would want to comment on why they seem reluctant to take cases than previously and perhaps if it has something to do with liberals on the court having greater faith on the obama administration than the bush administration. >> we solved all of the national security problems. >> yeah. i know, at least reported in some detail on the underlying has been use litigation involving detainees over a fair number of koreas and as you say, rich, the only case they have on the docket right now is the clapper case which involves, you know, a intha prefer really a question about whether particular individuals have standing to challenge i think i suppose one could infer from the fact that the court has not waded in to the cases since [inaudible] that the supreme court came from generally comfortable with the way that the d.c. care cut is care cut handledded the issue. it's let's have a hand for the panel. please stay in your seats for the this. in over two weeks the first of the president rnl debate live on c-span, c-span radio and c-span.org. watch and engage. coming up tonight on c-span2, former solicitor general paul clement on the last supreme court term. then oregon governor john hamre talk abouts his state is taking to lower health care costs. later, more about the supreme court new term. go booktv.org for more information about this.e senater relations committee holgtdz a conformation hear for the u.s. embassy to iraq. the head of the embassy in baghdad before the committee live starting at 9:30 eastern on c-span three. also on c-span 3 a congressional gold medal ceremony honing honoring someone. live coverage starting at 3:00 p.m. on c-span 3. as you can see, the president and i have fundamentally different vision than governor romney and congressman ryan. and a different value set that guide us. >> under the current president, we are at risk of becoming a poor country. because he looks to government as the great benefactor in every life. our opponent have a new motto, they say, quote, government is the only thick that we all belong to. [boo] i don't know about you but i have never thought as government as something i belong to. >> watch and engage with c-span as the campaign move toward the october debate. the vermont issue candidates will debate once. all the presidential candidates face off in three ninety-minute debate. follow our coverage on c-span, c-span radio and online at c-span.org. former solicitor general was lead attorney arguing against the affordable act before the supreme court. up next he talks about the case and his reaction to the outcome. from the cato institute, this is a little more than an hour. >> and i want to welcome those of you have just joined us for the simon lecture. i'm roger pilon which is your host institution today. i want to also welcome those who c-span audience who may have joined us for the simon lecture. each year, we conclude our constitution day conference with the lecture named in honor of the late ken simon, a pittsburgh engineer, entrepreneur, and industrialist who was a great friend of liberty and the cato institute, and was devoted to furthering the thought of the american founders. it is brought a distinguished group of judges, legal scholars, practicing attorneys to the podium to discuss enduring constitution issues. our first asimon lecture, for example was on constitutionism. it was given by douglas h. ginsburg and the chief judge of the circuit. they covered subjects ranging from property rights to religious liberty, the ninth amendment, including privacy, the subject of last year's lecture by alex, chief judge of the ninth circuit. and that is the lead essay in the cato supreme court review, which has just come for those of you on the c-span audience, you can get simply by going to cato.org. next year we're going have though this year's simon lecture leading off our issue. we begin the second decade of these lectures with no less distinguished speaker. it is the honorable paul clement who is known as one of the most gifted prak ticks their to appear regularly before the supreme court. he's currently partner with ban kroft p. l. l. c. his prabtd is takes him far and wide. he served as solicitor of the united states until 2005 to 2008. prior po the conformation of christ or it general, he served nor nearly a year and is principle deputy for over three years. the more than seven years of service in the office is the longest period of continue use service in the office of by the solicitor general since the 19th century. he's argued over 60 cases before the supreme court, including, of course, [inaudible] the case which we begin this conference today. he received the bachelors degree from georgetown university school of foreign service and a master disagree of economics from came bridge university. he graduated from harvard law school where he was the supreme court editor of the harvard law review. following graduation, he clerked for judge lawrence h. of the u.s. court of appeals for the d.c. circuit, and for associate justice sley ya of scalia of the u.s. supreme court. he went on after that. his subject today is intriguely entitlement "october turn 2011; a constitutional moment." please welcome paul. [applause] [applause] thank you for the kind introduction. it's great to be at the cato institute. i have attended the number of these simon lectures myself. it's a honor to be here presenting some thoughts on october term 2007 a constitutional moment. as roger alluded to. i have the distinct pleasure of argue the challenge to the affordable care act on behalf of 26 states. the very fact that 26 states combined together in a challenge against the federal statute is rather remarkable development in the case itself was remarkable in almost every respect. i want to come off i want to talk about the case and the the court's decision in the case. certainly i'm under no delusion there is anything left to be said about the health care case it has been as analyzed as any case in recent memory and that's consistent with the entire case. this case, i mean, i have been in incredibly privileged to be involved in 60 supreme court cases i argued. others that i briefed, and this really no case that i can remember that captured the public attention quite the way that the health care case and the health care challenge if. i also think it's fair to say that the health care case had a rather unique arc. this is not a case sometimes there's an act of congress has passed and it's instantly identified as having a potential constitutional problem that's very promptly sort of brought up to the supreme court. one can think of, for example, another case i was involved in my my time in government the constitutional challenge to the mccain act. there was a case where the debate in congress was largely a constitutional debate. it was largely a debate about the first amendment. the opponent of the law opposed it largely on the first amendment ground. and it made the way to the supreme court of the united states. by contrast, the affordable care act, there was certainly an incredibly healthy policy debate. anybody in washington remembers the various proceed yiewrl man yiewfers to get the statute pass especially after browne was elected in massachusetts seem belie the votes were there. they managed to find them. in the very rigorous debate about the policy merits of the affordable care act, there was no a robust debate about the constitutionality. and that's something that began in the waning days of the act and was promptly follow thed by litigation that ensued. and when this litigation was first brought, the reaction in many corners was not just that the legislation was a bit of long shot or the litigation was breeging, but really it was frivolous. it had no chance of success. or incur who is commentator and is, you know, certainly somebody who i think looks at things objectively initially gave the challengers a whooping 1% chance of success. and i think compared to some things that other people said, it was generous. and thinks really took a turn though, that's why i think the arc of the case is so interesting. with judge hudson's opinion in richmond, striking the act done and judge vitamin sent's decision in florida striking the act down in principally focusing on the individual mandate, judge hudson struck down the the mandate. he struck down the several ability analysis struck down the balance of the statute. the decision by the district court were a turning point. i think it's fair to say in the poplar press the narrative went from the challenge is frivolous to which this is a challenge that only a republican appointee to the federal judiciary could love and people pointed out correctly there was a one for one response between of the party of the president that appointed a psychiatric court judge and how they resolved an affordable care act challenge brought before the number of democratically appointed judges that upheld the law andudson and vitaminsent republican appointees struck it down. things got even more complicated and interesting at the the court of appeals level. at the court of appeals level you have judges where the easy narrative of all you need to know about a judge is what the party of the president who appointed them was. and you'll know how they're going vote. that easy narrative broke down at the court of appeals. much attention was given fact that jeff cut ton of the sixth circuit voted to uphold it. and judge civilman whom i clerked for, a tremendous line for the movement, but siller silverman upheld the law. down in the 11th circuit voted to strike down the law and she was appointed by president clinton. the similar pattern people saw in the district court broke down in the court of appeals level. what splowld been, i thinking the sort -- [inaudible] of suggestions that this litigation was frivolous was a supreme court action in taking the case. not only do they take the case, which i don't think once the 11th circuit voted to strike it down and there was a circuit split. i don't think it surprised anybody that they took this case for revere. i think what surprised people is the way the court handled the case. it divided the case in four separate arguments, dedicated a full week of supreme court argument to the case and dedicated six hours of argument time to the case which turned out proved not to be enough because the court actually kept them up there a little longer in discussing the spending power issues on the very last day. when it was said and done over six hours of the case is up press dented. as i said i was involved in the mcconnell -- mccain fine feingold in the case i remember in the government we were discussing amongst ourselves what would be the maximum amount of time we can possibly ask the supreme court to dedicate to a single case and we came up with four hours as being the most that one could us plausibly act for. the supreme court on the own motion granted six hours of argument time to the case. a remarkable case. now my own involvement in the case is not run from the beginning. i was not present at the creation. i was brought in appellate level. and i'll say i think an interest ante-dote i'll pick up in a moment. i was actually asked about the case in a media interview before i had any involvement. i was on an npr and walter was advancing what was then the dominant view of certainly people in legal academia was the soup -- suit was frivolous. i had not studied parents, i -- papers i had some basis the challenge the government faced. in my own time i had the opportunity to defend acts of congress against the argue they expeed exceeded the enumerated powers. what i was first asking it will come down whether or not the government can articulate a limiting principle. if they can, of why they can do this, why they can force people to buy insurance, but then force people to buy anything they want, then they'll probably win. on the other hand, the challenge for the government in these cases is to understand and be able to articulate why it is if the government can do this it doesn't mean the end of the judicially enforcement limit on the congress power. without having dug in the case but having warned the playing the role of the government lawyer i knew it would be important. as i mentioned the case ultimately gets to the supreme court of the united states and they guide dwoided in four arguments. especially in light of the opinions that emerges, i think it's fair to say there are six separate issue they dealt with in this case. the first and the least interesting with was the issue of the antiinjunctions act. this was a question that went to whether the court had jurisdiction to hear the case. the fourth circuit down in richmond had relied on the antiinjunction act in order to decide that they would not reach the merit of the challenge. and so this was certainly an argument about the jurisdiction they had to take seriously. they dedicated the first day of argument to the question and they ultimately decided anonymously unanimously they had just dirks. the one interesting thing about the reasoning on the antiinjunction act of course, for purposes of the antiinjunction act, the fact that congress labeled the individual mandate a penalty and not a a tax was outcome determinative. they said for purposes that we take congress at the word. if they don't call it ax a -- if you want to challenge a tax you can't go in the yowrt you have to seek a refund and through the fund process mount your challenge to the law. so the court disposed to the injunction act unanimously. we get to what really i think in terms of the argument schedule was one issue. which was the constitutionality of the individual mandate. but in reality, it's three separate issue. whether the individual mandate is justified under the commerce power, whether it is justified under the necessary and proper power of the constitution, and whether or not it can be justified under the taxing power. it's worth focusing on the fact these are three issues and they needed to prevail on one. these are three separate issues where y they had the tower pass the statute. and so -- if you think back to the statement there was only a 1% chance of prevailing, part of the challenge for those attacking the statute was they really did have to run the table on the arguments. and to make matters even more difficult, i think it was conventional wisdom and a part of conventional wisdom that didn't turn out to be wrong, there were four votes on the court ready to uphold the law on any one of these grounds. and so what that meant in practical terms is that in order to prevail, the challengers really needed to run the table and on the three issues get 15 out of 15 available votes. now the god news is that the challengers managed quite remarkable feet of getting 14 out of 15 votes. [laughter] bad news, of course, the 14 out of 15 doesn't get you a majority opinion striking con the law on the grounds. but i actually think, and you may think it's higher. ly or think it's somebody who is trying to spin a let gracious defeat. i think it's fair to say that the supreme court in the decision struck down the individual mandate. the mandate that each and every individual purchase the insurance. they struck it down as unconstitutionallal because it said that congress lacked the power under the commerce power or the necessary and proper power to impose a mandate to purchase insurance. of course, it said that the statute was valid under the taxing power. but it only did that by recharacterizing the statute as not a mandate to purchase insurance. but as a tax on the status of not having insurance. and so construed they uptheld as a valid exercise of the taxing power. but i think it's worth recognizing that is a different statute from the statute that congress actually passed. and it has different practical effects. i think most law-abiding citizens, if they're told there is constitutionally valid mandate to purchase insurance will purchase insurance. i think most people, if told that they have to pay a tax if they don't purchase insurance will want to know how much is the tax, and how much does the insurance cost? and then they will make a decision about whether to purchase health insurance and some people will purchase insurance and some people will choose to pay the tax. and the practical consequence, i believe, is that the number of individuals who will remain uninsured will be higher a regime than taxes the status of being uninsured relative to an actual individual mandate that everyone must purchase insurance. now as i say, i'm receptive to the charge it's a spin. don't take my word. take the chief justices' word for it. in the sense that the taxing power law that was approved here really is different fundly different -- fundamentally different quoting from the mandate he said the basic argument, quote the government tax power argument asking us to view the statute differently than we did in considering the commerce power theory. in making the commerce clause argument, they defended it as a mandate requiring individuals to purchase health care insurance. they dot noit claim the taxing power allows congress to issue such command. instead, the government asking us to read the mandate not as ordering individuals to buy insurance but rather as imposing a tax on those who do not buy the product. and just to be more clear, you e he continues later in the opinion, quote, under the tax theory, the mandate is not a legal command to buy insurance. instead, it is quote, just a tax hike on certain taxpayers who do not have health insurance. many of you may think to yourself, well, okay but that's certainly at the minimum not the most straightforward reading of the statute that congress passed. well here again, the cheech justice agrees with you, quote, the most straightforwarding reading of the mandate it commands individuals to purchase insurance. but the chief justice pointly did not embrace for purposes of the taxing power the most strad straightforward reading of the statute pane the contrary, he made a point of point of making clear that the reading of the taxing power version of the statute was not the most natural or straightforward reading of the statute. he made that in response to justice begins begins berg which made a fair point. she said, look, if you're going uphold the statute on the taxing power, why have you issued an opinion that goes out your way to say it lacks the power under the commerce power and the necessary improper power. that as a matter of judicial minimalism -- if you're going uphold it ought to be the only issue you address. he specifically responds by saying, quote, the statute reads more naturally as command to buy insurance than as a tax. and i would uphold it as a command if the constitution allowed it. but of course, the chief justice held that the constitution did not allow that. that just to be one final note of clarity here at the end of his opinion, the chief justice makes the distinction about the clear as i think one could. he writes, quote, the federal government does not have the power to order people to buy health insurance, end quote, full sentence. two sentences later, the federal government does have the power to impose a tax on those without health insurance. now, so i do think, again to emphasis this point the chief justice own analysis makes clear that the statute emerging is not the individual mandate, the supreme court despite what you read in the paper did not say it was constitutional to immoas a mandate on individuals to purchase a product they wouldn't oars want. the supreme court simply and only upheld the pour of the federal government to impose a tax on those who do not have health insurance. and just to underscore the notion that this really is different from the statute that congress passed, remember, the point of the health care law was to get people who did not have insurance and enable them to get insurance. it was not an effort to tax those people that did not have insurance. but that end up being the law that gets upheld in the end by the court. now, if i could add one word of note about the taxing power, which is the analysis that there is the power to levy a tax on those that do not have insurance cannot be the end of the analysis and the chief justice acknowledges that, he said, of course the constitution imposes limits on the ability of the from congress to impose a direct tax on people without a apportioning that among the states and you can think about that as a limitation on the taxings power. but it's very much also a federalism provision. because the idea the framers had was the power to impose a direct tax, a powerful authority to grant the federal government and it has the potential to be done in a way that had favoritism among the states which of course was one of the principle concerns of the founding generation the people who went to the constitutional convention from their individual states were concerned not give the populous states the power to overwhelm the less populous states and the like. and so the apportionment principle is an important federalism principle and limit on the taxing power. and so the chief justice had to confront the question of whether or not this tax was an direct tax because it clearly was not apportioned. and my last quote from the chief justice's point. he hold on the point tax ongoing without health insurance does not fall within any recognize category of a direct tax. now i have to say, i think that is an issue where the supreme court may have benefited from more extensive briefing. because if you go back to the commerce power argument, in the commerce power argument, the fact that congress had never done this before, for 200 years they had every incentive to impose mandate to solve social problem. they never used that authority in over 200 years. it was viewed as one of the challengers most powerful arguments when it comes to the taxing power, the fact this tax doesn't come within any recognized category of direct tacts or indirect tax is the seen as the key why it's not a direct tax. the other part of the analysis that the court focused on here the chief justice focused on the fact in the framing generation, there was a tax on carriages. owning a carriage. and that issue actually divided the framers. madison thought it was imper admissible. hampton thought it was a per admissible indirect tax. the issue made it with the supreme court. and they sided with hampton. as the chief only analysis makes clear, it isn't a tax on buying health insurance, this is a tax on not having health insurance. so the analogy is not a tax on having a carriage, it's a tax on not having a carriage. and i think it is hard to understand how the framers would have thought those two were the same thing. and indeed, if you look at the the court's able sis in the carriage case, they say the reason a tax on carriages is not a direct tax on you as an individual is because it's effectually a tax on purchasing a carriage. but the same reasoning suggests that tax on not having something be it a carriage or health insurance is an indeed a direct tax that operates on the individual. i promise you six issues. i have gotten to four so far. let me talk about what i think of as in some respects the sleeper issue in the case. that's the spending power issue. the supreme court here by 7-2 majority put a limit on the spending power of congress and indeed struck down part of the affordable care act is unconstitutionallal because it imper belie cohearse the state to participate in the medicaid program. and it did this specifically by telling the states that even though you have been participating in medicaid for thirty or forth years and we give you reimbursement for past levels, you need to take new money and cover vastly expanded universe medicaid partials. if you don't agree to take the money, not only will you get the money for the new patients you will take away the entire funding stream you had you relied on forth past. it was essentially the leverage the state's past participation in the program, and use it as a way to force the states to accept the new money even if they didn't want the new money with the conditions nap attracted seven votes if are the proposition it was an excess of the spending power. supreme court in doing so recognizes, i think the importance of one of the key values of federalism. that is accountability. and the court said per permitting the federal government to force states to implement a -- key to the federal system. the notion is that if the states are forced to take the money, then one has no way of knowing who to complain to. if you don't like the way the medicaid program is being mored and it's being administrated by the states, you naturally complain to the states if they have no choice but to participate that's a fundamentally accountability problem. they saw that. they focused on the key of being the link to the existing funding extremes and use that as a basis for finding the statute unconstitutionallal. as i say, in some of the coverage of the case, the spending power issue sort of got swept aside and largely ignoring. there's no mistakes dowfort's conclusion there was a constitutional violation they said, quote, we determine that section 1396c to take away the funding dmkd including preexisting fund -- is unconstitutionallal. they only struck down the one provision of the medicaid provision. they didn't carry along with the severability issue. they steed ready to strike it down but to strike down the statute in the entirety. and i think that it is -- as i said quite remarkable that the challengers came within that one vote on that one issue to invalidating the statute as a whole. but i'm not hear to talk about could have, would have, should have. i want to talk about whether we have a constitutional moment and also i want to focus a second though on the practical consequences of the way the court decided this case. because my own view is that this decision that emerges is not either as a practical matter or a the under both the commerce power the spending power and there's nothing unconstitutionallal here at all. one of the points i have aclued to. time will tell. i don't have the data here. but i think more poem, this is a law-abiding nation, i think more poem would have compline -- is their choice to make as to whether or not it's economically rash nam for them to decide not purchase health insurance and pay the tax. and i promise and one last quote, is it may often be a reasonable financial decision to make the payment rather than purchase insurance. so hes himself envisions the difference could matter. the other thing that matters and matter a great deal is the fact that states now have an opt out right under the medication expansion and, you know, based on an article i saw this morning in the "the wall street journal." six states have already decided to opt occupant of the medicaid expansion and others are considering following the same path. and the more states that opt out of the medicaid expansion, the more individuals that congress intended to have covered will remain uncovered. and i think combine the effect of those two effects the one being the difference between a tax and a mandate, the other being the uninsured states that declined the medication expansion fund will mean there's less people who were uninsured who will be covered under the law than congress envisions. that fact alone may over time cause congress to have to revisit the issue. i think the more states that opt out of the medicaid expansion, the more of a natural constituency there will be in congress to reconsider this expansion because the state that have decided not to participate have made it very difficult choice. they're taxpayers in the are going to be taxed to fund the medicaid expansion in ore states. that is a situation where they made a tough decision and i think there will be a natural constituency potentially to reconsider the health care law whether that's wholesale or retail, i think that's a force that has to be reckoned with. i also think that there are important juries -- there's a debate whether the glass here is half full or empty, and i really don't mean to enter that debate, i simply mean to objectively say that i do think there are significant differences about the way they decided this case from the way they could have decided in case. eni think i have already tacted about the practical consequences. i want to talk about the other ones as bell. up in an election year. i have no delusciouses that is what attracted a great deal of the media attention to the case and what gave it almost a life of its own. what makes the case so important is that federalism is at the heart of our constitution. and i'll quote justice kennedy on this. he said in the lopez concurrence. quote, federalism was the unique contribution of the framers to political science and political theory. here he quotes a judge and historian. he continues on the surface, the idea may see counter intuitive. it was the insight of the framers that freedom was enhanced by the creation of two governments not one. so, you know, separation-of-power is great, but we really do have that, we borrowed that from other countries. federalism was the unique contribution. it's fair to say, it was a major theme of the -- one of the major accomplishment was to reignite i think it's fair to say that many people looked a the the federalism cases and knelt in -- felt in the end the court was running out of the steam they decided lopez, they decided morrison, but then they blame me, they decided the race case which i argued on behalf of the frowfort federal government and they said that the prohibition there, the national prohibition on marijuana extended all the way to the possession of medical marijuana, even though california had knead legal. there was a sense that federalism was important, but it was kind of losing steam. it's important to recognize that the two appointments of president george w. bush had very different backgrounds from the justice they replaced. based on the backgrounds it was fair to question whether they would have the same innate dedication to federal -- as the ones they replaced. justice 0'connor but chief justice as well. they cut their teeth in the state system. they had substantial backgrounds practices on the state courts or being on state court myself. with respect to the chief justice a lot they had wonderful backgrounds they were in the federal government and so there was reason to wonder when they were appointed that, you know, sure, based on the service in the executive branch they would probably understand separation-of-power intingtively. it's hard to know where they would be on federalism principles. because of that, there was certainly bold prediction in the case that this was not going to be a close case. i talked about the arc of this case but i think it's worth recognizes even out eve of argument, there was a substantial body of opinion that suggested that this decision was going to be 8-1 or 7-2 in favorite of the statute against the challengers. that wasn't in the abstract, it was specific as to the commerce clause in particular. and i'll pick one example, but it's only one of many. and lind d.a. agree house wrote a story and i'll give you one paragraph. if gives you a favor for the peace. she argued, quote, free of convention and the convention she refers to is trying to the even handed about the merit of two sides of the case and fresh are from reading the main briefs in the case to be argued before the supreme court next week, i am here to tell you that the belief that the sides are equally metro callly balanced here is wrong. the constitutional challenge to the laws requirement for people to buy health insurance specifically the argument that the mandate exceeds congress' power under the commerce clause is powerful but analytically so weak it desolves upon close inspection. there's no there there. indeed in the runup to the argument, there was even a rather strong body of opinion that perceived even just schee scalia. my point here is not to call out any of those who predictedded the outcome in this case incorrectly. because as far as i know. everybody predicted the outcome in the case incorrectly. you show me the person who said it was going come down to the chief justice vote on the tax power. i would like to meet them. my point is not to pick out people and say you miss the vote. my point is there was a responsible body of opinion even on the eve of argument that the commerce power and the spending power challenges were not just narrowly wrong or

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