a group of folks for whom this really does matter and who can make a very important difference in the things we're talking about. so, i guess the question or the title of the session was, medicaid, did it survive repeal and replace? is that what we are going with? i guess the short answer is, yes, and do questions and answers now? okay. we'll say a little bit more. so, we -- it's obviously been a very interesting year in the health policy sphere and you had a great session before this talking about the political angles on it from a couple of great speakers but it's been -- i think it's safe to say we have never or certainly not in i recent memory had the medicaid program as much in the spotlight in the highlight, in the hot seat, if you will, as we have had over the past year. we certainly expected that, because -- i'm kind of thinking about our conference which is conveniently time to be on election day every year, and it's a small election day this year with two gubernatorial races but a very big one last year, the ruled of the election last year laid out a pretty clear plan for what congress was going to address in terms of healthcare reform and that was going to impact medicaid, and there were two big themes, two big threads which is obvious but repeal and replace of the affordable care act, which despite the attention on and the focus that premiums and the individual mandate and everything else gets from people, the affordable care act is missourily medicaid, at least 50% medicaid. if you think about the -- think about how much money according to the cbo, if we still trust them, how much money the affordable care act spent over a ten, year window, about a trillion dollars, literally half of that was in medicaid. so that was a big component of the debate. the other big component was the wholly unrelated discussion around entitlement reform and medicaid financial reform, including whether or not we should take the open-ended nature of the medicaid program, the open-ended federal financing partnership we have had for 50 years, and convert that to a per capita cap. and i think we have all saw how that played out. we came within a hair's breadth or a dramatic john mccain thumbs down on the floor at 1:30 in the morning from doing -- from that passing. but that certainly doesn't mean that any of these discussions are over. certainly congress is going to turn and is turning now to tax reform. we'll see how that plays out. but i think the impetus and the political and fiscal desires in congress and the administration to continue to make those changes, whether to the aca, or to the underlying medicaid program, are going to continue, and i think you heard from the last session that how that plays out, what the numbers look like, still at bit uncertain, but this is not a time where we all sort of say, oh, it's all behind us, we're done, let's focus on something else. so, i'd like to relay just a couple of things that we focused on over the past year. so, by and large, we have mostly remained in and on the sidelines of a lot of the debated. the pig picture decisions should you repeal the aca, should you block grant or per capita cap the program. and that's high level question and generally above the pay grade of state medicaid directors. what we have tried to do over most of the past year is take the opportunity to try to educate and inform people about what medicaid actually is, and this is kind of a lifelong journey for us. if there's anything if night node almost 25 years now of doing medicaid policy work, that medicaid has a pretty significant information and appreciation deficit amongst the public policymakers and unfortunately historically amongst the general public as well. although i think that is starting to change and i think that is a very good thing. i think it would not be -- you would not be shocked if you were to kind of walk away from some of the debate happening around medicaid and should it by changed shark it be reformed, what does that reform look like, you wouldn't be blamed for thinking, well, medicaid serves -- it's the policy program for the poor, and, therefore, low income working age adults would make up the majority of either the population or the spending. and one thing that we really tried to do over the past year is say, well, that's not exactly true, though. and i'm not going throw up graphs or charts or a lot of data at you but i'll throw out some figures just to kind of put things in context. medicaid is a big program. and it is big and it is important and it has been that way and does it quietly. not a lot of people really appreciate or understand how much it does. we cover more than 70 million americans. larger than medicare. we also are going to spend almost $600 billion this year, combined state and federal. a very, very big program and it's 25% or so of the average state budget. but when you peel back the onion and say what is underneath this? where does medicaid actually spend its money, that is what surprises a lot of people. that's the information that is really important to impart upon public policymakers as well as the general public. if you think about, again, where do we spend our money? 35% to 40% of all medicaid spending is spent on medicare beneficiaries. that number continues to shock and stun people. largely this is the result of medicare's also a big program, serves a lot of people, spends a lot of money, but the problem is that for low-income, frail seniors, and people with ditch disabilities who are on met care, medicare doesn't really give them what they need. and medicare has limits on acute care coverage, limits on mental health coverage, medicare requires a lot of out of pocket, copays, premiums deductibles. medicaid pay for all of that for a small group called the dual eligible, and the other important thing to keep in mind is that medicare doesn't really do much in the way of long-term care, and again, that's a thing that tends to shock or stun people. my grandma is in a nursing home. medicare is covering it. right? all likelihood no, it's not. it's medicaid. so, 35% to 40% of medicaid spending is on medicare beneficiaries. and an additional 20% of medicaid spending is on younger adults and kids with a variety of disabilities. physical, intellectual, developmental. they're not on medicare but they require a lot of healthcare services, require a lot of long-term care. and then 20% on top of that is on kids. one thing to keep in mind that in addition to being the nation's long-term care program, medicaid also covers almost 50% of all births in the country. if you're a fan of "west side story," earth to earth. that's what medicaid does whennen you go back to the numbers and add those up, 35% for the mid care duals -- medicare duals, another 20% for people with disablees, another 20% for kids, what's the math right there? that's 75 plus percent of medicaid spending that goes on people who are not and in many cases never will be in the work force. so, we just wanted to make sure that as people are thinking about big ticket items, people thinking about major, major changes, hopefully they understand where the actual dollars go, because i think that's probably generally not true. -- that people understand a lot another bit. tried to educate and that's made a big difference. think that we had a session at our annual conference just a couple of days ago, where we had a bunch of health journalists talking about recapping 2017 and what it meant, one thing they were sort of remarking on is, how, we really didn't expect medicaid and medicaid advocates and beneficiaries and proponent offed the program to play such an outsized role in the-and-and in the debate happening on the hill. i think it's a very good thing at the end of the day. so, like i said, we saw how that played out. repeal and replace was attempt a couple of time. never quite got over the threshold. the conversation by all means is not done. going to continue. but what we would really like to see is the ability to really focus instead of the good that medicaid is doing, has done, and can do, in the u.s. healthcare system. that us has been the focus of states and medicaid directors for years, and will continue to be the focus of states for years to come. and so people ask me, oh, you represent all thereof these states and territories and what is it like? just like herding cats. the answer is a little bit yes, because texas and vermont and california and indian are all very, very different states. the easy thing for me is that there are lot of really strong threads and commonalities amongst what the states are trying to do with medicaid. and if i can kind of boil it down to a simple bump -- bummer sticker like slogan what medicaid is trying to do in every state -- you have heard it referencees here a couple of times -- quite frankly it's moving away from fee for service. now, that will mean different things in different states. but if i'm looking at the thread, the themes and what is unifying and binding those states together, it's two efforts. one on the delivery system side, and then another on the payment incentive side to move away from an unmanaged, uncoordinated, unsophisticated fee for service system. now, my old friend, dennis smith, who used to run medicaid at the federal level a number of years ago, likes to joke that fee for service, abbreviated ffs, really should stand for, fend for self. because that is really what it requires of people who have multiple chronic conditions, co-morbidities, co-occurring substance abuse, mental happen, homelessness issues. people who need long-term services and supports. me? i don't know ump i'm pretty healthy. i don't know that i need my care managed all that well. but i'm not driving the healthcare system. it is people whose healthcare conditions -- it's the one percent of our population that drives 25% of the spending and five percent that drives 50. and i think what we see from state to state to state is we got to get away from the old system. medicaid has been that way and medicare has been that way for a long time and those are starting to change. medicaid for much of the past 50 years has been a passive bill-payer. we are becoming an active purchaser of health, and that is -- and we are working with everybody in the system, plans, acos, physician groups, hospitals, nursing homes everybody else, patients to try to figure out how to make this work. we really have to fishing out, how do we tee sign a system of care that is built around the individual? not one that looks at someone's eyes and ears and teeth and brain as four different parts of some theoretical body. but all is part of the whole. and i think we just saw dish saw some statistics the other day that said that for the first time ever, more than 50% of all medicaid spend is now in a cap by tated form in a cap tated payment arrangement and certainly much more than 50% of the people. is this all traditional managed care they way people think? no. we have big ncos, big for-profiter nc oohs, smaller mission driven ncos, but we have a lot of other things going on that are more relevant and suited and tailored to individual states, markets, and demographics, and political sensitivities. so, what is going on in massachusetts, massachusetts, boston is big, what's big in boston, big hospital systems. they got acos. arkansas, not a lot of managed care in tray decisional -- traditional sense there but marry building patient centered medical homes to do the same thing:... i always hesitate to say manage care because that gives people images of certain things in people's mind, but when i say managed-care, i'm talking about something that's defined more by what it's not. i think sometimes a relic of the historic past and something we need to move beyond. it's not just enough to change the delivery system. i think about states like in arizona. arizona has been one 100% managed-care ever since they have a medicaid program. they have the longest experience with any type of managed-care arrangement and or one or more sophisticated contractors out there. even there, a couple years ago, they looked and said what are the plans doing with the money we are cap dictating to them. they are just paying providers fee-for-service underneath that. that's not really managed-care either. so they embarked on an aggressive effort to say, over time we will go from zero to 3250, i don't know what the end goal is, but significant portions of that payment are going to have to flow down to the providers in some kind of value -based arrangement, some kind of shared savings arrangement hot dogs for lunch every single day. now the social worker looked at them shall we get a nutritionist nutritionist? we have to get on this system and they sort of thought about it and said no, no, 89 had a hotdog every day for her whole life. that's not the problem. in fact maybe that's what's keeping her alive. what is the actual problem and again this is something you would never know unless you had those boots on the ground. she watches this woman cooking a hotdog. she is cooking it on a frying pan on the stove. the only way she can do it is -- she's four-foot 10 inches. and she's watching this and she's like i see how. there's a knock at the door and a dog working in the phone ringing a momentary distraction to see this woman while she is cooking the hotdog. a trip to the hospital and er hospital stay inpatient maybe some rehab therapy. $30,000 maybe she's back home. we don't want to do that. .. go down to walmart, by a microwave oven, install it in her house and show her how to use it. boom. we are going to bill it or charge it but we know that $80 investment is not going to guarantee something doesn't happen. if you're thinking about, they are getting paid the same amount if this woman has a 30,000 dollars adventure or not. that kind of investment makes sense. we are seeing that everywhere. we are seeing that with the individual who is in the hospital, the er, 200 times a year. she's homeless. currently costing the system $300,000. year. if you just invest a little bit and subsidize housing, you will never see that guy again. again, medicaid will pay for housing, no. this creates larger challenges because we had to figure out how we can pay for this and who will put the seed money up. who will make the investment in the microwave oven, in paying for utility bills. the seniors who live in a high-rise, people who have a three 100% higher chance for going to the hospitals for copd because the air conditioner doesn't work. there is a lot of work that has to be done to figure out how we pay for this. there is another issue at play here. we continue to struggle with high-level questions around what is the proper role for government for healthcare in this country? we don't have an answer. these are very thorny issues. i think back to four or five years ago to the last election. there was this hubbub over the obama bone. turns out the administration, president obama was given away free cell phones to poor people in order to buy their votes. that's pretty outrageous. he got a lot of criticism. again when you dig deeper, you realize it was actually a bush era program. the push was to get cell phones to low-income people so they could have regular access to their primary care physician or be able to call into a work situation, but almost didn't matter because the optics of it were governments not doing something that's critical for people, it's doing something that is a luxury. as taxpayers look at that they say i don't have a cell phone, i work hard, i make sacrifices, what's going on over here. as we move forward in a lot of these areas, i think part of our challenge will be how do we maintain the political and the optical sustainability of some of these policies. there is no question that an individual, if you make these investments in housing or food security or microwave ovens, you can make a big difference. that turns into government giving away free apartments or whatever, that becomes harder to sell. i think one of the really important things we are seeing is that based on the debate over the past year, there is not a really strong political constituency for medicaid in congress. just enough to not do repeal and replace by a vote at midnight, and when there isn't a really strong political constituency in congress, it's really important to have a strong political constituency for medicaid at the state level. that is one of the things that we are addressing now. i mentioned we had our annual meeting a couple years ago. they talked a lot about what the new administration's priorities were going to be around medicaid and around thinking about how too do some things differently. it was a message that, a large group of people, some people agreed with, some people disagreed, but i think i would argue that if you think about it from the perspective of clearly sending the signal that they are going to be open to thinking about it in a different way in terms of work requirement and lifetime limits or other types of personal responsibility or community engagement. collectively i don't think our members have a clear answer to that. some will love it, some will hate it, some will say that's fine for you to do it but don't make me do it, but i do think it's important that we strengthen the ability or we strengthen the political community. who has been the most vocal, vibrant, eloquent, passionate defender of the medicaid expansion or medicaid in general? it was john kasich in ohio. he took it and said medicaid is how i am fixing a huge problem in my state, the opioid crisis. he is a strong proponent of a job at being the best social program, but is also cognizant that if you can't get a job because you can't pass a drug test, those are just words. hit. his advocacy was critical. i firmly believe, if we had, over the past couple of years been more flexible in how certain's dates wanted to approach medicaid expansion, keep in mind we have 31 states who have done it and another 20 including d.c. and put maine aside for a second who haven't, if we had gotten more states who had done the expansion, i'm not sure we would be having the same debate over the past year. i know there's a heated debate on things like work requirements and health savings accounts and other approaches, but what i say to folks is don't have that debate in an ivory tower. you have to have that debate where it matters where that matters is that the state house. think about indiana and arkansa arkansas. they did very different approaches to medicaid expansio expansion. they say those aren't as good as regular medicaid, you shouldn't do that. it was never a question of should they do medicaid expansion or should they do the different thing, it was should they do this different thing or do nothing. that's where so many of these other states are. i think it's important, as we are moving forward in working with cns to forge a new state federal partnership, it's got to do two things. it has to strengthen and empower states to make the reform that are necessary and which will look different in one state versus the next, but also acknowledge that a key component of this is going to be that delivery system reform and that payment reform. i don't know what the future is, but i do know that if we take our foot off the pedal of making the move, making the investment in value -based purchasing and system redesign , we will squander best opportunity we've ever had to really fundamentally address the underlying cost drivers of healthcare and not just the fig leaf that people see around your insurance premiums or whatever. we have got to figure out what those underlying cost drivers are and we have to be bold and aggressive about dealing with it. we have to be realistic and rational about it too because at the end of day, if you try to cram something through, if you force reform down unwilling throats, they won't be sustainable. if you say to physicians or any group out there, medicaid is doing this and ohio's doing one thing and arizona's doing one thing, on medicare's doing that and the commercial markets are doing that thing over there, then you're not saying to people it's time to change a business model, you're saying is time to change her business model five general ways. that's probably not sustainable either. we have to figure out a balance of being able to approach these in a thoughtful way and keep them sustainable. i heard someone describe leadership once as the ability to disappoint people at a rate they can sustain. i truly believe thes this is our opportunity to be leaders in the sense that we are not doing things that are easy. we recognize that system transformation and payment reform is, and in the words of my board chairman, the hardest thing i've ever done in my professional life. we know these things are hard, but we need to do them and we need to do them in a sustainable way because these are the lives of the people we serve that are in the balance. i hope we can work together on a lot of that. i don't know if i have any time left for q&a, but if there is, i would love to take it. >> thank you very much. >> we are at time. thank you very much. i appreciate your comments. cspan "washington journal", live every day with news and policy issues that impact you. coming up this veterans day weekend on saturday, founder and president jasmine discusses her organization. then everett alvarez, the longest held prisoner in vietnam talks about his experience being held captive for nearly eight years. also marine veteran and ceo explains the mission to increase the number of veterans in elected office. be sure to watch cspan "washington journal" live at 70 strength saturday morning. join the discussion. >> on saturday, watch the wisconsin book festival starting at noon eastern featuring best-selling historian doug stanton and discussing the 1968. [inaudible] washington post staff writer amy goldstein on the fallout from the closing of the gm plant in janesville wisconsin. daniel golden will discuss how national security agencies established espionage rings at american universities. and they look at the lives of migrant workers in the united states. watch the wisconsin book festival saturday, starting at noon eastern on book tv. >> next a hearing on military caregivers. we have testimony from former senator elizabeth dole and actor director brian filby. this is two hours ten minutes. [inaudible conversations]