It is only appropriate everybody take your telephone device and take a photo of yourself. [laughter] because anybody that would start a meeting before a 00 on the eastern time zone cannot be all there. I am assuming that most of you had the opportunity to get at least your first cup of 10 starbucks down your belly and feeling good. Good morning. First of all, i want to make knowledge somebody before you yesterday. Fit campbell for the job he did 2013 the passion and disorganization for our industry has been incredible and part of what this is all about is the type of person that vic is the effort is a Guiding Light for those of us that will have to follow me with all the things that he did. Please stand up everybody give him a round of applause [applause] ladies and gentlemen, this morning i was supposed to be sharing the stage with jim the chairman of the American Hospital association and president and ceo of Presbyterian Health services n new mexico. He was supposed to be here with us but unfortunately the weather eliminated his ability to make it. The reason he was going to be here is we are fierce competitors in in new mexico and it just happened in being the chairman of the Hospital Association and the of the federation we thought we would have a good time up here today to talk and banter but unfortunately he could not make it so we will have to share the stage together another time. But even without him we will still have the especially valuable time for all of us. As we hear directly from the political and policy leaders who would shape and impact on industry in the months and years to come, from the comments i have heard yesterday this meeting is already a success for many of you. I heard you talk about the you a bite to get a big bottle of scotch to sit down with the generals with for two hours to find out what he really knows. [applause] but also about the buyers exposition i had the opportunity to walk through the halls this today at lunch and none of you were there. [laughter] they q for your role with the success of this exposition and a special thanks to our sponsors their names will be scrolling across the screen hoping to take the opportunity to a knowledge who they are. I have been to this event for about 25 years. It seems odd i remember the Cherry Blossoms blooming. It may be later but there is a stark difference to what is going on today that it is about 16 degrees versus when there was so much pollen in the air you could hardly breathe. But think of the transition from the winter to spring we continue to be in transition. But we are not the only industry that always goes through a transition. Whether banking or the opposite may be the video industry. How many of you out there today think three years or five years ago had a card in your pocket and it was a blockbuster card. How many had one . On the views still do . [laughter] they are taking up space if you still have one today. By blockbuster was a dominant leader in that industry. But it was capital intensive , brick and mortar and employees. Then this organization netflix comes up the Business Model was a little different. Was capital, a large Distribution Centers and few were employees. Then they introduce streaming video to cut more capital to do more with their employees. Them last week they announced a big deal with comcast to get directly to the cable customer to deliver even faster speeds. During the hours of netflix subscribers generate 30 of the downloading activity on the internet. Between nine and 11 00 p. M. 30 percent of that activity goes through netflix video. That is expected to continue to increase with the comcast transaction. All this was was a simple disruptive Transition OneBusiness Model going to another. For us whether the Affordable Care act or all the other things there is a great deal of uncertainty as we begin our own transformation with tremendous financial and operational pressures brought on this by the largest player, the federal government and a much more powerful customer. The best ideas all come from washington d. C. If you dont believe me ask them. [laughter]. We have all the same cost better paid onethird of what we used to. Thats not right. But that is what is happening to our hospitals. Ladies and gentleman for those of you in this room that are suppliers, vendors and partners of our hospital , the more money they take from us the less money we have to spend with you. As we continue to educate policy leaders regulations dont make sense. This notion that medicare is that the bank for every other program that lacks funding is not the solution. Our industry was asked, our industry was asked to provide Better Services to medicare customers. We have done that. Our industry was asked to improve our quality. If you look at our core measures, our hospital conditions, readmission rates, everything has improved. We did what they asked. We were asked to improve efficiencies. He looked at the facilities and operations today, we did what they asked. Rearrested take cuts to help fund the four will carry act. Ladies and dillon, we did that as well. Please take the time to write or visit your congressional representative and let them know that there actions have consequences. Those consequences to our industry can be devastating if done the wrong way. I encourage you to access the federation blog which is up right now and twitter accounts, and if you need information as it relates to providing a congressional leaders with information about what their actions are doing to our industry, i would encourage you to check our blog, check the quick twitter. People will get back to you and provide blue in the information necessary, and we can educate those individuals that adversely impacting as today. We will have a great rest of the day and i would like to introduce the presidency of the federation. Thank you, david. That was great. Regulators are of the morning. Good morning to everyone in the audience. Thank you for coming. Senator, our first speaker is on the way. I want to wish you a good morning. I also remind you, as david just did, follow us on twitter and fe damer hospital. Or on my twitter. Also, go to an oblong. We have a terrific program this morning. I do have one thing to say. Unfortunately our congressman ryan was caught in the weather, one of our casualties comanche is actually in a planner now. Were going to miss him, but he is promised that he will come next year. Im sure all of you will be here next year, and we will have congressman ryan for you, but will beat you have is a new chairman ron wyden, senator blonde, md. Taverner, cms administrator and sinister to me it will be up this morning. Before we get to the program i want to make an announcement, you need for this program. Provides an opportunity. Today we can put up the slide, today is budget day in washington. It is the day at the white house release is the president s budget for fiscal year 2015. The federation is releasing a new report on this day on National Spending trends in health care, and its implications for medicare policy and the federal budget. This report was prepared by a Health Economist alan dobson updating a Previous Report that al did for us in june 2013. Dobson examined the forces driving the historic trends of Health Care Growth and developed estimates of potential Additional Savings in medicare if the Current Trends continue. It has been less than a year now, but much has happened since that last report. There are new, empirical studies and new cms data. Most importantly there are new Congressional Budget Office analysis and budget forecasts. All of these are documented in that dobson report. Taken together, this new information gives us even greater confidence that the force is transforming Healthcare Finance and delivery are structural and systematic. Initially some suggested the slowdown was fueled by cyclical Economic Activity driven by the Great DepressionGreat Recession. Although im sure some of like it was a Great Depression. New Economic Research suggests that the economy may have had an even smaller impact on Health Care Spending than earlier felt. The report that we were released showed that sustained slowdown is adorable and Additional Savings are more likely to materialize but even as the economy continues its recovery. Lets go to the numbers. I will start with the punch line. 900 billion in additional medicare savings is within reach if we stay the course. What do i mean, and what does this chart show . Medicare spending per beneficiary, Medicare Beneficiary has slowed beyond anyones expectations and has remained low for several years. This led to a cbo, the Congressional Budget Office lowering its annual 10year forecast a Medicare Program spending for the sixth consecutive year. The cbo most recent budget forecast issued last month lowered medicare spending by another 154 billion beyond its previous forecast which it issued just nine months ago. Many may know that several years ago i was staff director of the house ways and means health subcommittee. It was my job to closely follow and adhere to the cbo, cost estimates, budget forecast coming every report it issued. Cbo is what congress relies on, the gold standard. Dobson used cbo data and averaged the medicare per beneficiary growth rate from 20102013. Then he applied that rate to the most recent cbo baseline of medicare spending. His conclusion, medicare spending of the next ten years could drop by as much as 9 billion beyond the cbo current forecast. This means something, especially after we look under the hood and closely examine the moving parts driving the data. We are now entering the fifth year of record low growth in National Health expenditures. The projection for just 13 2013 growth is just under 4 . Health care expenditures are continuing their historic slow rate of growth in spite of a slow, but still recovering economy. Many are unaware of that dated trans that really hammer home that the the spending trend and offers further evidence that the slowdown will be sustained. This stated trend is reflected in a stunning drop in health care prices. Health care prices have fallen 6 in 2009 to a near record low of just under 2 last year, the Second Lowest level in the last 50 years. When i say prices, i mean the payments for services, not something reflective of the charge master. These are the actual payments for services. Hospital price growth which fell by more than half since 2009 to one and a half in 2013 is leading the way. More evidence of hospitals leading role in slowing Health Care Cost growth is captured in this chart. It shows the steady decline in medicare hospital spending measured on a per beneficiary basis of. Look at the bar on the far right in 2012 there was near zero growth in hospital spending. Medicare inpatient spending per beneficiary actually declined to estimate to a half percentage. What is going on . What is driving these trans . James carville many years ago said it is the economy, stupid. Now at least in terms of health care is the structure. The slow economy starting with the recession, the Great Recession does play a role, but dobson knows, new Economic Research suggests that the economy may have had an even smaller impact on Health Care Spending than thought as recently as one year ago. What matters more and more are the structural changes taking hold in the delivery and financing of health care. This undoubtedly is what the head of the cbo man to and did you see here. You see that he references beneficiary and provider behavior as contriving the slowdown and discounts financial turmoil and the recession. I am sure this is no surprise to any of you. All of you know this. All of you are creating change every day in hospitals through reduced rea admissions, building integrated care networks, the playing sophisticated Information Technology systems and expanding the use of Electronic Health records. It is all about efficiency and enhancing values. Our mission now should be to stay the course with the structural innovations and the reforms that are driving the slowdown. In so doing we will keep within reach the 900 billion in additional medicare savings that dobson sites. This is why this morning i am sending the dobson report to the house and Senate Budget committee who will be analyzing the white house budget. I will also send them a letter urging congress to exercise caution and avoid burdensome policy mandates and a new hospital payment cuts. Enough is enough. Hospitals already must absorb 117 and a half billion dollars in cuts imposed just since 2010. At the same time the Medicare Payment Advisory Commission which advises congress about medicare estimates that medicare margins per hospitals will fall to8 in 2014. That is an alltime low. Let me conclude by making two key points. Clearly any further cuts will jeopardize access to care. The second, for it any further cuts it would be it jeopardize of investments hospitals must make to accelerate the structural changes driving the new era of lowcost growth. I encourage you to read there report in full, which you can get access to the a policy blocks. Fah policy. Now we will move on in the program. And thank you for your patience with me, senator widen. Also, to look back to the high side from bonnie to see whether the center is here. He is walking in. He will be here in a moment. In so that gives me a chance to get my notes together. [silence] our first speaker this morning is center ron wyden, the new chairman of the Senate Finance committee i should say the powerful Senate Finance committee. He has been a Public Servant in washington for 32 years. He has recently taken the helm as chairman of the Senate Finance committee, elected to the senate in 1996 and elected to the house of representatives first in 1980. I have known center widen for much of his capitol hill career, and i have always had a deep admiration for him. He has tremendous dedication, i great leader in health care, committed to getting things done, has a willingness to reach across the aisle to seek consensus and if some times causing his democratic colleagues anxiety, he just tells them that they have to live with it. But what strikes me most about him is the effort that he puts into policymaking. He is all about the details, and he is all about doing whatever it takes to get good policy made by the congress. I can remember in the middle 80s when i was the Republican Health council on the ways and Means Committee, sitting in my office one afternoon. I got a call the phone rang, and on the other end was congressman wyden. First, as a staffer, i very rarely got calls from congressman. To, i dont remember ever getting a call from a congressman who was not on my committee and i served. Three, i dont remember any democratic congressman ever calling me in my entire career on capitol hill. It was quite striking. That did not quite know what to say. I said yes, sir. Then he started into a bill he was working on that you wanted to explain and make sure that i and a step that had some questions for me about what we might think about it. That was striking to me. It was unusual. He is an unusual senator, unusual congressman, and is the kind of person you really want in washington. Today marks his maiden speech before a Major Organization since becoming chairman of the Senate Finance committee, and we are extremely grateful for him to take time from his schedule to come down and see us here and speak to you this morning. Ladies and gentlemen, i want to welcome my friend, the chairman of one or ron wyden. [applause] what an inflationary introduction. And chip, thank you. Without making this a brocade tossing contest, let me tell you what you already know. You are so lucky to have chipcom who has enormous credibility. There was a reason that i called him back when i was a young congressman and had a full head a fair and rugged good looks. He is a straight shooter, and we are lucky to have him. Thank you for that kind introduction. Let me start by saying at think it would be cruel and unusual punishment to give you a big filibuster. A lot of you had to brave the elements. I thought what i would do is offer a few thousand particularly well chosen words. My staff wrote this wonderful speech. I can put it in the congressional record and mail it to you, but to give you a little bit of a sense of where i think that we are on Health Policy and then throw it open to questions. Suffice it to say, most of Health Policy really is not Health Policy and all. It is essentially budget policy. And so that Congress Just ducks on so many of the big issues and then sub putting together something that in the parliaments of washington might be called a patch. Maybe it is an extension. Maybe it is called a st