Including e cigarettes. This part of his remarks from the National Press club is about 20 minutes. Thank you for their warm welcome and gamp, everybody. The impact that thats having on consumers, employers, health care providers, certainly our government. Ill also describe some of the solutions that were bringing forward to address what many have referred to as this cost quality access con dun drum that health care is facing today. I think everybody is familiar with the cvs brand, last year we celebrated a significant milestone, it was our 50th anniversary and we have come a long way since that very first store opened up in lowell, massachusetts back in 1963. All along the way, we have worked hard to stay true to our focus on the customer, working to create value and constantly innovating to meetinnototing to needs. We have more than 71,700 locations all across the country. We are much more than a pharmacy company. When you think about all these businesses, iltsz really this unique concept of options that allows us to create real value for our patients, our customers and our clients all across the country. Im sure many of you in this room, have seen work for companies that have their mission, they have their vision. At cvs health we call it our purpose. And that purpose is simply we work hard to help people on their path to Better Health. According to the independent office of the act ware of the u. S. , the health share of kbloes domestic product will inyees from 17 to more than 19 by 2023. And while this is lower than the growth experienced over the last two decades, Health Spending is still growing faster than average economic growth. The real world translation to those numbers is the fact that it becomes more challenging for people to quickly access quality care through the traditional care channels. You ask the question, how did we get there . If you look over the past 15 years, i think it shows us that Health Care Coverage has been dominated by employer funded insurance, and while employers and insurers and Health Care Companies have worked hard to bring innovation to the market in terms of improving the quality of care, we also know that millions of americans remain uninsured and often without needed medications. At the same time theres tremendous growth in medicare, its driven in large part by what we like to call this silver tsunami, the fact that there are 10,000 baby boomers who become eligible for medicare every day. Now this means over 16 million new people becoming medicare eligible by 2019. And it also means were facing a longterm increase in the demand for services and the use of medications, another challenge is the increasing prevalence of chronic disease. About half of all americans suffer from chronic diseases and this is expected to rise in the next 20 years. Chronic inside accounts for three out of every four dollars being spent on health care. And the number of people that dont take prescription, as prescribed, were calling it an epidemic, there are a number of studies out costing our Health Care System about 300 billion a year in avoidable and unnecessary costs. So i think you can see there are a lot of factors that are contributing to Health Care Spending and there is no question that we must and can do more to slow the growth of health care costs. Now i think we can all agree the Health Care System is also evolving, first theres the Affordable Care act. And when the law is fully impmented, well see more than 30 million newly insured americans, with coverage provided by employers. Positions they have traditi traditionally operated in fee for services. This is beginning to change as they now take on more risk for participation and Accountable Care organizations and patient centered medical homes and as a result, theyre now cvs heals playing an Important Health care trend. Another trend, consumers are more informed and theyre starting to play an increasingly active you look at the growth of private exchanges, the emergence of public exchanges, theyre putting the decision for po choice directly into the hands of consumers. Finally, theres this transition to a digital society, were all experiencing it, its transformed how wily, how businesses behave, how consumers act within their day to day lives, although this has been slower in health care, significant change is under way. The reality, in kind of innovation, its not optional. In fact there are many that believe the Health Care Industry will change more in the next ten years than it has in the past 50, health care will be purchased, it will be delivered and it will be managed very differently going forward. Now im convinced that one very important avenue to improve quality, cost and access is rooted in pharmacy care. Its reflected in many of the things that were doing at cvs health to drive solutions. If you look back in history, traditionally people have thought about pharmacies as pill dispensarie dispensaries, but we know that pharmacy is much more than that. Pharmacy is extemding the front lines of health care to deliver Better Outcomes more affordably to the people that we serve. And cvs health is driving many innovative approaches to reinventing pharmacy, with the ultimate goal to once again help more people on their path to Better Health. The ways in which we do this is very different than how we have helped customers in the past. I think one of the greatest assets that we have that drives innovation lies in our feedback. Pharmacists are in a very unique position to help. They are a highly trusted resource for patients. For many years now, the gallup poll has septemb broad range counseling and interventions and one of the opportunities we can address is that issue i mentioned earlier, patients not taking their medications as prescribed, if you go back to the statement i made earlier, that about half of all americans suffer from chronic disease, and most chronic diseases are dreeted with some type of drug therapy, and this is where the statistics start getting alarming, because one out of three patients who start a maintenance prescription will dpe side to discontinue medication before their first refill is even due. More than onehalf of patients take their doses prescribed by their physicians and three out of four people will stop taking medication within the first year of beginning therapy for a newly diagnosed disease. I mentioned earlier, as mitch as 2,300 obviously, solving this medication adherence epidemic, it presents a huge opportunity to improve health and at the same time lower costs. We have a solution, we call it pharmacy advisor. And its a portfolio of it connects patients with pharmacists who help help them stay on their prescribed medications, preventing complications, these can range from phone counseling to email reminders and in store reminders and home consultation for some of the more complex cases. Research is showing that its working. And we looked at interventions for people with diabetes and the fact that they were very effective at not just increasing adherence, but providing a return on investment. For every dollar spent, there was an roi of 3. And today pharmacy eadvisor is available for 10 we developed another program that we call specialty connect. It offers patients choice and flexibility in how they access their specialty medications. And, you know, if youre wondering, well, exactly what is a specialty med. These are prescription therapies for very complex conditions, like hepatitis c or ms, rheumatoid arthritis, cancer, in addition to being very costly, often times the drug requires special handling. We can offer the patients getting prescriptions by mail or a new option, to drop off their specialty prescriptions at any cvs pharmacy. This increased flexibility and access, it makes it easier for people to get on and stay on their therapy. Minute clinic is another innovation helping us to address access to care issues, thats being created by this influx of newly insured and statement a growing shortage of primary care physicians. Minute clinic is continuing to stand its foot print. We plan to have 1,500 clinics by 2017. Today Minute Clinic provides high quality care for acute needs as well as chronic and wellness needs, vaccinations, screenings, weight loss programs, chronic disease monitoring. Minute clinic is staffed by highly trusted Family Practice assistants. Were open seven days a week, including evenings and holidayings and we see patients on a walk in basis, no appointment required. 50 of all of our viz skits actually occur during the evening hours and on weekends. We believe Minute Clinic is both replacing the use of higher cost sites such as Emergency Rooms as well as addressing unmet needs for access to primary care. In both of those activities will help to hold down the swroefr all cost of care. We do not advocate for or believe that the family physician is going away or should go away. We see our Minute Clinic offering as both complementary and collaborative with primary care medical homes and helpful to our Health Care System overall. 6 finally theres our focus on innovation. Customers with both integrated view of their medications, and the ability to refill or even transfer them between the retail and mail channels. We have added features to our mobile app, you can scan your refill, you can check interactions, giving customers on the go easy access to customer information. Well be adding a virtual pill box and daily reminders to help patients and care givers actually track medication adherence. So you can see how our unique Business Model is allowing us to deliver programs and services to improve health and at the same time lower costs. So these are just some of the ways were helping people on their path to Better Health. Thisablies us to this topic that hurts health and thats tobacco. And the numbers here are pretty staggering. More than 42 million adults smoke. 480,000 people die each year from tobacco related illness. Smoking today cause s 87 of lug cancer deaths. 79 of all chronic cases of pulmonary disease. The costs attributed to smoking and exposure to smoke is approaching in a place where health care is delivered for some time now. At the same time, there is this 2 billion in annual Tobacco Sales to be considered. We listened to what our colleagues, customers, communities in which we live and conserve are saying got tobacco, as well as leading Health Advocacy groups. We step back, we use that purpose again on their path to Better Health as our decision filter and we brought multitippal viewpoints to the Table Including those of our chief medical officer, human resources, operations, the list goes on and we weigh both the shortterm and the longterm opportunities, as you might expect, there was very thoughtful debate and discussion and as a unified Management Team along with our board of directors, we made the decision to quit tobacco for good. We announced that decision back in february, february 5 and six months later, were officially tobacco free, one month ahead of schedule and were proud to say that were the First National pharmacy chain in the country to take this action to support the wellbeing of our patients and our customers. [ applause ] now we engaged leading Health Organizations including campaign for tobacco free kids, the American Lung association, cancer society, the ama, Robert Wood Johnson foundation, American Pharmacists Association and these organizations and many others have rallied behichd our decision with public statements adding to the chorus that why pharmacies should remain smoke free. Consumers, celebrities, health, business and political leaders and theres no question that a National Conversation about tobacco has been reignited. We do believe that reducing access to Tobacco Products will help reduce tobacco use. And our chief medical officer, dr. Troy brennan recently shared the results of a new study that showed in boston and san francisco, where retailers with pharmacies are not permitted to sell tobacco, there was up to a 13. 3 decrease in the purchasers of Tobacco Products. At the same time, in quitting tobacco, we also watched a comprehensive and uniquely personalized Smoking Cessation campaign to help the many smokers a who want to quit. We built a comprehensive Smoking Cessation campaign. Our 00 Minute Clinics, the fact that we have 26,000 pharmacists and Nurse Practitioners all across the country and it includes four critical components, an assessment to determine the smokers readiness to quit, education to provide smokers the information and tools thiey nee to quit, medication to help curb the desire to use tobacco and coaching to help consumers stay motivated and prevent relapse. It can nearly double quit rates from 7 to 15 . You might be surprised to know, it takes on average seven times before someone is successful in quits. We want those people to never quit quitting until theyre successful. September 3 was also a historic day for our company for one more reason. Its the day we announced our new name, cvs health, its certainly inspired people on their path to Better Health. I think all of us at cvs heal Health Leadership role on to be back ctobacco. Its the right thing to do, just like our decision to quit se selling Tobacco Products. Tobacco has no place in a health care setting, including pharmacies. So to sum it up, we dont see exiting the sale of tobacco is an important decision for just us, we see it as an important decision for public health. So in closing, let me come back to where i started. As a pharmacist myself, i know the value our profession can play in the lives of others. I also know that theres even more that pharmacy can and will do to improve both care and affordability. And our 200,000 cvs Health Colleagues committed to me in nations. This subcommittee hearing is about an hour and 40 minutes. The chair is senator Bernie Sanders of vermont. We want to thank cspan for covering this important hearing, and i especially want to thank our witnesses, some of whom have traveled from very long distances from around the world to be with us today, and we very much appreciate your being here. United states has i think a very effective form of government in the sense that we are a federalist system, which means that we have 50 separate states and it is very common that one state learns from one another state is doing. Every day in california or North Carolina or vermont, somebody is coming up with an idea or program and it works. Other people steal those ideas and learn from those ideas and thats a pretty effective way of going forward. I do not believe that we utilize that practice as much as we should internationally. The United States is not the only country on earth. There are other countries that are doing very positive interesting things and we should be learning from them. In a sense thats what this hearing is about. Its to see what we can learn from other countries around the world in terms of health care and in my view, in fact, we have a whole lot to learn. Because at the end of the day, the United States spends far more per capita on health care, we spend almost twice as much per person on health care and yet we have many millions of people who are uninsured and our Health Care Outcomes compared to many other countries are not particularly good. Why is that . And what can we learn from other countries who in many ways are doing better than we can . Let me start off with a couple of basic facts about the american Health Care System. While it is absolutely true, some americans, often those with a lot of money, receive some of the best Cutting Edge Health care in the world it is also true that for millions and low income americans, they have little and no access to even the most basic health care services. Later on, maybe as part of the questions or answers, were going to show a photograph that many of you have seen in virginia or california, people lining up in fields to get basic health care or to get their teeth, rotted teeth extracted, photographs that would remind you of a third world country. And the reality is that today the United States is the only major country on earth that does not guarantee health care as a right. That is a basic debate we need to have. Should all americans regardless of income have access to health care as a right or not . The United States is the only nation in the industrialized world that says youre not entitled to health care as a right. And in 2012, more than 15 of our population nearly 48 million americans were uninsured but thats only half the story. Many people who had insurance also had high deductibles and high copayments and those payments created situations where people hesitated to go to the doctor when they should. Not to mention, other people leaving the hospital deeply in debt and going bankrupt. Is that something that we are proud of . Heres another important point to be made. We talk about rationing and so forth of course in the United States health care is rationed but it is rationed by ability to pay. Acourting to a harvard study published in Health Affairs 2009 and Health Affairs in 2014, some 45,000 americans die every year because of lack of access to health care. And i have talked to doctors, i dont know if my colleagues in their states have talked to doctors. I have talked to doctors who say yes, people walk in the door and they are now terminally ill and the doctors say why didnt you come in here six months ago or a year ago and people said, i didnt have any Health Insurance. I didnt want any charity, i thought i would get better. Were losing 45,000 people a year because they dont get to a doctor when they should. There are furthermore communities around this country i know senator roberts of kansas mentioned this in a hearing we had a while back. There are no doctors and no doctors in the area at all. People do not have access to basic primary care. Despite all of that, the United States as i mentioned a moment ago spends almost twice as much per capita on health care as does any other country. We are spending about 18 of the Gross Domestic Product on health care compared to 11 to 12 in france, germany and denmark and canada. 9 in the u. K. , australia and norway and less than 8 in taiwan. Were going to hear a representative from taiwan in a few minutes. In terms of efficiency, are we an efficient system . Compared to the huge amount of money were spending, are we getting good value . In august of 2013, bloomberg a respected business source ranked the United StatesHealth Care System 46th of 48 countries based on efficiency. Now what about outcomes . If im spending 100,000 on a car and somebody is spending 20,000 on a car, we would assume thatmy car runs better. Im Getting Better value, im getting value for what i pay for. The United States pays almost twice as much per person for health care but in terms of our Health Care Outcomes we do not do particularly well compared to other countries around the world. Among oecd countries, the United States ranks 26th in terms of Life Expectancy. Residents of italy, and spain and france and norway and the list goes on will live two to three years longer than americans. So in terms of our outcomes, they are not particularly good. What about prescription drugs . Clearly when we go to the doctors, very often the therapy is medicine. I recall talking to a doctor in northern vermont who told me that about 25 of the patients that she sees and she writes prescriptions for are unable to fill those prescriptions because they are just too expensive. The fact of the matter is the pharmaceutical industry in this country earns huge profits and charges other people the highest prices in the world for prescription drugs. Theres a lot more to be sad but let me end my remarks with those comments and i look forward to hearing the testimony of our esteemed panelists. Senator burke . Thank you, mr. Chairman, thank you for calling this hearing. I truly thank our Witnesses Today for their knowledge and for their willingness to be here to share with us their information and about two weeks our nation will mark the fourth anniversary of the enactment of the Affordable Care act. Better known to most as obama care. Todays hearing will inform what direction we will next take health care in america by examining access to care and cost associated with Health Care Systems overseas. As we exin test test ake stock of where things stand in the american Health Care System today. At the time obama care was being debateded in this very committee, i warned it was the wrong direction for our country. Health care was broken before obama care but four years later, the American People are experiences firsthand how the new law has made things worse. Thats why americans view the law unfavorably. And thats why they are understandably weary of still more government involvement in health care. The president promised if you like your plan, you get to keep it under obama care. The federal government mandates that americans that americans buy Health Care Coverage and not just any coverage but the coverage that federal government says it good enough. Sadly, millions of americans have lost their Health Care Plans and health plans they liked and wanted to keep despite the promises and continued delays of the administration. Obama care expanded medicare an unsustainable health Entitlement Program on which 40 of physicians on average do not even agree to see medicaid patients. I believe the experiences of other countries will reinforce what many medicaid patients already know. Their coverage does not always translate into timely access to care. Todays hearing will also examine costs. While the president promised that obamacare would bring down premiums by 2500, premiums have actually gone up by an average of 41 in the individual market due to the laws mandates, how do they attempt to control costs . For starters it established the independent payment Advisory Board on unelected board of 15 bureaucrats empowered to make cuts to the Medicare Program most likely in the form of cuts to doctors, which will impact again, seniors access to care. Todays hearing will be informative as to the direction we take health care in this country. Will we repeal obama kaur and replace it with reforms that Lower Health Care costs and put our nations Entitlement Programs on a sustainable path and empower patients in decisionmaking to find plans that best meet their individual needs . Or will we continue on the current course of unprecedented government involvement in health care and unsustainable cost . What do we have to learn from a single payer system overseas and what have other countries reforms meant for their patients. What would such a course mean for our nation standing as a Global Leader in medical innovation and for american patients seeking access to quality and affordable coverage and care that meets their individual health care needs. I do want to thank chairman sanders for holding this hearing because it will inform many of us on these important questions. I think todays hearing represents an important admission that obama care is not working, that such an admission takes place within the very committee that the act was written in is a huge step and i commend the committee in taking it. I look forward to listening to the Witnesses Today. I continue to work with my colleagues to advance patient centered reforms that will Lower Health Care costs and increase access to quality Affordable Health care. I thank the chair. Thank you, senator burr. Did you want to make a statement . Okay, thank you. We have seven very knowledgeable panelists and we look forward to their testimony. Were going to ask you to keep your remarks to five minutes and then we will followup with some questions. Our first witness is may ching a Health PolicyResearch Analyst at the Woodrow Wilson affairs in princeton university. She is adviser to the China NationalHealth DevelopmentResearch Center and we very much appreciate her being with us today. Please speak right into the microphone so everybody can hear you its already started counting. Good morning, mr. Chairman, senator sanders Ranking Member burr and senator enzee. My name is mae chang, Research Analyst at the Woodrow Wilson school of international affairs, princeton university. Thank you for inviting me to testify. I have been asked to give an overview of single payer system and my written testimony into a few salient points. An overarching point in my testimony is that single payer systems are notes same as socialized medicine or socialism so often assumed in this country. In socialized medicine, government owns and operates the Health Care Delivery system and finances it. The Health System americans reserve for their military veterans and va system is purely socialized medicine. Single payer systems are typically just social insurance, like the Social Security system, under social Health Insurance, the government merely organizes the financing of health care but the Health Care Delivery system typically is private and can include for profit entities. Medicaid, for example, the social insurance, it is social insurance but not socialized medicine. The main characteristics of single payer systems are the following. They are ideal platform for equity and access to health care because everyone has the same Insurance Coverage and providers are paid the same fees regardless of the social economic status of the patient. Single payer systems typically are financed on the basis of ability to pay. Rather than on pt basis of Health Status of the insured. Single payer systems typically give patients free choice of doctors and hospitals. In single payer systems providers of care do not compete on price but they must compete on quality of care, including patient satisfaction. In a Single Payer Health insurance system, Health Insurance is not tied to a job. Instead it is fully portable from job to job when people lose their job and in a retirement. Does not go away. Therefore theres no job lock in these systems over Health Insurance. Because all funds to providers of health care in a single payer system flow from one payer, it is relatively easy to control total Health Spending in such systems. The International Data i cite in my written testimony made that clear. Now, some single payer systems like u. K. And canada, may put constraints on the physical capacity of their Health System like number of hospitals and mri scanners as part of their effort to control total Health Spending including waste create by excess capacity. This constraint may lead to rationing by the queue. The alternative to rationing by search administrative measures is rationing by price and ability to pay. Something that we see in the u. S. Health care system, the argument that health care is not rationed in the u. S. Is not supported by the data. A single payer system is an ideal platform for modern i. T. With common gnomen clay tour. It can be done electronically and yields enormous savings in administrative costs. And because such i. T. System conveniently captures data and information on all health care transactions, these systems provide data base that can know spending in real time and is in the case of taiwan and it is a base for use for quality measurement monitoring and improvement. And Public Satisfaction of a single payer systems is generally high. Denmark, for example, is ranked the number two highest in the European Union in consumer satisfaction. In taiwan Public Satisfaction is also very high with a National Health insurance program. Ranging in the 70s to 80 . In canada, a 2013 International Survey of 11 countries found that 42 of canadian surveyed said that their Health Care System works well and need only minor changes compared to just 25 of americans who said that. 75 of americans said american Health Care System needs fundamental changes or completely rebuilt. Lastly, survey research has shown that single payer medicare is very popular in the u. S. A final point is that every Health System has its flaws which can be highlighted with anecdotes, therefore theres now a brisk medical tourism worldwide, for example, canadians come to the u. S. For health care but it is also true that americans go to canada, mexico and thailand and taiwan for lower cost health care. Thank you very much. Thank you. Were going to go to do rodwin, a professor of Health Professor of Wagner School of Public Service and work the his entire career on studying Health Care System as broad with a special focus on france. He head the fullbright distinguished chair at the university of paris in 2010. Doctor, thanks very much for being with us. Thank you, senator sanders and distinguished members of the committee. Good morning to all of you watching on cspan. My name is victor rodwin. I will speak on the french Health Care System. That system is a model of National Health insurance that provides Health Care Coverage to all legal residents residing in france. It is not, i repeat it is not an example of socialized medicine like cuba. It is also not a National Health service as in united kingdom. It is also not an instance of a governmentrun Health System like our excellent Veterans Health administration. French National Health insurance in contrast is an example of public Social Security and private Health Care Financing combined with a die verse Public Private mix in the provision of health care services. The french Health Care System reflects three political values embraced by americans. Liberalism in the sense of giving patients free choice of any doctor or any hospital they care to go to with no networks and no restrictions. Second, pluralism, everybody has a die verse choice, they can go to fee for service or Group Practices or Outpatient Health centers or Emergency Rooms or go to Public Hospitals or private hospitals or outpatient consultations with specialists in Public Hospitals. The third value is solidarity in the sense of having those with greater wealth and better tellth and finance services for those in poorer health. In terms of population health, the french outdo us and im embarrassed to say that, hands down. Look at any indicator you like, Life Expectancy at birth, infant mortality, they better than we do. Female Life Expectancy at 65. They outlive us. Female Life Expectancy at 80 years of age where medical care matters, they outdo us. Disabiblt adjusted Life Expectancy, they outdo us. Years of life lost, we have more years of life lost. This is not a rerepublican or these are the facts. But thats not the way to judge a Health Care System entirely. Surely a Health Care System reflects these indicators, but not just the Health Care System. My colleagues at nyu would still say we have the best Health Care System in the world in spite of these indicators. They would argue that these indicators reflect other things for which they assume no responsibility, social services and equality of income, family policies which are very strong in france, maternal and child health programs, all of which are factors which explain why they have Better Population Health than we do. So we have to look at other indicators, and one important di