Good afternoon. My name is Marshall Chen. I'm one of the Associate Directors of the McLean Center for Clinical Mental Ethics and Director of the Robert Johnson Foundation, Finding Answers, Disparities, Research for Change program. And on behalf of our team, I'd like to welcome you to this fourth in our series of lectures on health care reform and the ethics of health reform sponsored by the McLean Center and the Bucksbaum Institute. So today, we're delighted to have Dean Kenneth Polanski present on the impact of the Affordable Care Act and Health Care Reform on the University of Chicago's mission. I think most of us here know the highlights of Dr. Polanski's career. Well, I'd like to just point out a few key points that I think are particularly relevant for his talk today. So Dr. Polanski was born in Johannesburg, South Africa. And like many people grew up in South Africa, he grew up playing rugby, which is a sport like football, but without a helmet and without pads. So I'll let you be the judge of what that means about Dean Polanski. But also in South Africa, he was raised really during the height of apartheid and it was a time where with the secret police you had to be very careful with what you did. But during his time as a medical student at the University of Vitovastran, he did his part as part of some of the mass student demonstrations. He came to the University, to the Chicago after his medical school training. First was a resident in internal medicine at Michael Reese and then started his career at the University of Chicago as a fellow in another chronology and really had a meteoric, meteoric rise where he said age 37, he became the chief of the section of endocrinology. And then at age 43, which is sort of an age where most clinician investigators may be if they are good and if they're lucky, maybe just starting to feel comfortable. At age 43, he won the American Diabetes Association's highest scientific award, based on the career achievement award for work at the pancreatic bitter cell looking at insulin secretion. In 1999, he left the University of Chicago to become the chair of medicine at Washington University in St. Louis, which historically has been one of the top five medicine programs in the country, a big program, large clinical operation. In some ways, he had to deal with some of the issues that he's had to address over the past three years. Let's say a couple more things about Dean Polanski since his arrival here in 2010. First is that despite all his personal accomplishments and accolades, he's always been great with junior people helping to nurture careers. My third year on faculty, he played a key role in helping me get my own diabetes research program off the ground. The last thing I'll mention is that the University of Chicago in some ways is a paradoxical institution, where in one sense we're innovative. We have Nobel Prize winners, we're at the forefront of medicine, but in some ways we're a very conservative organization. In many ways, the business plan for the medical center had been static over the past 20 years, which largely relied upon fee for service volume, essentially keeping the equivalent of the center for care in a discovery filled with beds, it's best being filled. But in the past three years, since the Dean took over and brought in his new team, I think we've actually seen more changes than the prior 15 years. I think one of the tensions that the Dean will talk about is this challenge between the current system of fee for service, keeping the beds filled in something like the CCD versus the current challenges which are going to start incentivizing population management, global payments, care coordination, preventive care, community engagement, and in some ways, unless that is solved, we don't survive as a medical center. So Dean Plansky. So thank you very much, Marshall, and it's delightful to be here. And I hope we'll have a good session and a good discussion at the end. There'll be plenty of time. I'm not going to take nearly the whole time for my presentation. And I know there'll be a lot of questions and discussion. And we have many experts in the room who will be able to impact on that. So this is the outline of my talk. I'm going to first, for those of you who don't know but be sure that we're all on the same page, what is the Affordable Care Act? And how will it alter our clinical practice? A very important set of issues. What is the likely impact on our finances? And I know that when I give talks to faculty, the last thing they want to hear about is finances. But as you'll see in this context, that is very important. And then how do we plan to respond? And how do we plan to continue to be an outstanding medical center and medical school in the changing environment? So what is the Affordable Care Act and how will it alter our clinical practice? Well, I think the first thing to just talk about is the rationale for the Affordable Care Act. And as you know, the major rationale is that there are a large number of people in the United States without health insurance. The exact number is really unknown.  I think this is the order of magnitude. And as you know, there are a number of reasons why people do not have health insurance. Unaffordability is a very major one, often in the context of not having a job. So as you know, health insurance at the moment is largely tied to being employed. And if you're not employed, it's extremely difficult, if not impossible, to afford healthcare insurance. Illegal immigrants do not have access to health insurance. And this is a big number of people, particularly in border states. Jobs that do not offer health insurance. So there are many jobs now in the United States, part-time jobs in particular, whereas part of the employment agreement, they don't get health insurance just as we do at the University of Chicago Medical Center. There are actually a number of people in the millions who make an economic decision not to purchase health insurance. And these are predominantly young people. As you know, when you're young, you think you're invincible, nothing bad can happen to you. As you get to my age, you begin to realize that that's not the case, or I began to realize that a long time ago. And so people look at the cost of healthcare insurance, and they say, I'm healthy, and if something happens to me, highly unlikely, I'll pay for it out of pocket. And there are actually millions of people that are in that category. And this was a big issue of contention when the President was first elected between him and Hillary Clinton in that campaign, as you will recall. Now, the other issue, which is an interesting one, is that there are many people who are eligible for either Medicare or Medicaid, who for one reason or another don't sign up.  And then there are people who are excluded because of prior medical history. So people who have serious illnesses, they either are completely uninsurable in the current climate, or it's unaffordable. So there are a variety of reasons why many people who live in the United States do not have health insurance. And the Congressional Budget Office estimates that by 2022 the Affordable Care Act will have extended coverage to most, but not actually all of these people are uninsured. And we can get back to that in a short while. So that was the rationale. And the basics of the act are sort of summarised on the next couple of slides. I've tried to just go over them in broad general detail. The first is that just about everyone in the United States will be required to have health insurance. There are a few exceptions. The illegal immigrants is by far and away the largest group. Prisoners, there are a small number of groups that are not going to be required to have health insurance. The act prohibits lifetime monetary caps on insurance coverage. And you know that's a feature of our current healthcare insurance plans. It prevents exclusion for pre-existing conditions. It prevents coverage cancellation, except in the cases of fraud. And it establishes the share of premiums dedicated to medical services and also the essential health benefits that each plan must offer. And you can look at that on many websites now. And it goes over the elements of the plan. And they actually are very robust. These are going to be very good, significant insurance plans. And they're very similar to the services, are very similar to the services that we're accustomed to with University of Chicago Health Insurance or the Medical Center Health Insurance. And it's acute hospitalization. It's drug coverage. It's psychiatric benefits. It's outpatient. It's a whole variety of things. And there are minimum standards that the health insurance industry has to offer under each of these plans. Now, in addition to that, employers are required to cover their full-time employees or pay penalties, except for small businesses that employ less than 50 people. So the employer basis, although it's going to be modified, as you'll see, to health insurance is going to continue. And small businesses don't have that requirement, but there are other alternatives, as you'll see. The implementation of the employer mandate was delayed for one year until January 1st, 2015. And I'm sure you read about that in the newspapers. And there was a lot of political brouhaha about it back and forth. Now, tax credits are available for small businesses that cover specified costs of health insurance for their employees. And individuals without health insurance will have to pay penalties, starting off with modest penalties in 2014, $95 for an adult, $285 for a family, rising to significantly higher levels, but not overwhelming in 2016. And there's been a lot of discussion about whether this is really an adequate incentive for people to sign up for health insurance or whether many people will still decide that they're rather going to just pay the penalty and take their chances. And then young adults are able to stay on their parents' health plans until the age of 26, and that's a very significant change. And many of you are likely affected by this, and certainly your children would be. Now, in addition to the economics and the way in which health insurance is set up in the United States, what is anticipated or what I think is hoped for in the plan, both the president and the people who designed this plan, is that what it will do is it will result in a fundamental transformation in the way in which we think about health care in the United States. And this is what I think we should really focus on, and this is what I think is the challenge for all providers, including the University of Chicago. And what is envisioned is that we go from the present situation to a future state. And the present situation, as you know, is one in which it's almost exclusively fee for service for each encounter. Patient goes to the doctor or gets admitted to the hospital. The person is insured. The provider then submits the bill to the health insurance and gets paid for each of the services. Now, under this arrangement, the payers take the risk. We don't take the risk. The providers then focus largely, maybe not only, but largely on their episodes of care. So when a patient comes to see you, you obviously may pay some attention to the other consultants that they're seeing. We do pay attention when people get admitted to the hospital, what happened before, what's going to happen afterwards. But the focus on that is relatively limited. And what this leads to is fragmentation, because each provider is focused primarily on what they have to do and their role in delivery of care to the patient. And what's happening in the broader life of the patient is not a requirement for the current system. Reimbursement is based primarily on volume. And there's a big emphasis on commercial insurance. Now, in the future state, and obviously we don't know exactly how this is going to evolve. So this, I think, represents the best thinking of many people. And these are not my personal ideas. I've obviously read a fair amount about the topic, is that we are going to evolve over a period of time to some future state in which providers will need to focus on maintaining and improving the health of populations. And that we will be paid on the basis of how well we are able to do that. Now, what's also envisioned is that the providers will assume significant risk. And what we mean by that is that in addition to getting paid or as part of getting paid for providing care, the outcome will be taken into account, certain outcomes that will be defined. And if you meet the outcomes or you meet the expectations, you'll get a full payment. If you don't, you may get a penalty. If you do, you may get an additional payment. And at least some of the reimbursement is going to be dependent on not just whether you gave the service or not, which is the current situation, but what was the outcome to the patient? And it could be processed. Did you do the right thing?  It could be processed, but it could also be outcome. How many of your diabetic patients are at a target for hemoglobin A1C, indicative of good glucose control? Now, so outcomes are very important, and there also will be incentives to reduce utilization of expensive services. And there will be a focus on a lot of those. The one that is the most immediate for us is readmissions, and there now is a significant component of Medicare reimbursement that is tied for the readmission rate to the hospital. And there's a lot of focus, both in this hospital and essentially every hospital across the country, to ensure that our patients are not re-admitted to the hospital more frequently than is expected by the data. There are complicated methodologies to look into this. Now, the other thing which you'll see is going to be really critical, is that there will be an increasing importance of government insurance. And that's part of the basis of the political controversy and difficulty that this bill has been facing. So let me talk a little bit about population health management, because this is something that is a sort of a broad general concept that many of you may have some idea about, but the truth is very few health providers in the United States have actually implemented successfully an overall population health management program. There are a couple, Kaiser's probably one, there are a variety of providers in maybe one or two in Illinois, but the vast majority of us have had no experience with us. And there are a number of essential elements that people believe is essential if one is to be able to provide good health or promote the health of populations. So the first is that you need to have a large network to balance adverse selection and create scale for comprehensive programs. The second is that there needs to be a high level of coordination between different areas of the delivery system. So if you're going to take care of the health of the population, it really matters what happens to the person after they're discharged from the hospital. So the hospital is now going to have to set in place mechanisms to follow patients after they're discharged to ensure that they take their medications, that they see their doctors and that they don't get readmitted because if they get readmitted there's going to be a financial penalty for the hospital. There will be a big focus on post-acute care, that's what I've been talking about after the acute episode, to maintain health and reduce readmissions. Information systems that span different venues of care including the community. So clearly hospitals and physicians are going to have to reach out way beyond our current borders into the community to get data, find out what's happening with these patients, are they taking their medications, how are they doing, do they need to come in for a visit to prevent an admission because they're not doing as well as we would have anticipated. Now although this is very foreign to the way we are currently practicing, I think that most people believe that academic medical centres can and should and will play a critical role in many of these systems, not all of them. And I think the role that the academic medical centres will be able to play will be to help everybody figure it out because not everybody, most people don't know exactly what to do. Obviously the academic medical centres will primarily provide tertiary and quaternary care, education, quality metrics, analytic capability, a variety of different things that are not usually easily provided by the average community hospital and even the sophisticated community hospital. Now as you can see this all sounds actually outstanding, I mean it's really good if one can develop a system that is going to enable us to do this, I think it would be beneficial for patients, it would be beneficial for society in general. But there are a number of risks and questions and uncertainties and I've just sort of put a couple of them up here and maybe in the discussion time we can talk about additional ones that we don't know about. So we'll reimbursement be adequate for older, sicker, more vulnerable populations compared to young healthy populations. Clearly if you're in an inner city neighbourhood and you've got a lot of elderly people in your immediate service area and there's a large amount of illness there, the risks, if you're going to be sharing in this risk compared to a young healthy population out in the suburbs is going to be very different. Is the reimbursement going to be adequate to take that into account? To what extent is it appropriate to hold the health system responsible for outcomes compared to provision of services? So to get back to the example of a person with diabetes, let's say you have two patients with diabetes and you've decided that they need to be on a programme of diet and exercise and weight loss and you implement the identical programme in these two patients and one does extremely well and loses 30 pounds and their blood sugar has come down to the normal range and the other person just doesn't follow the programme and is exactly where they were before and they're doing very poorly. Is it really appropriate that the physician and or the hospital should be penalised for the different outcomes of the two patients even though the same programme has been implemented? If a person has very serious advanced cancer and you in the best faith you follow what are appropriate guidelines and you give them chemotherapy and the outcome is very bad, to what extent should you be held harmless for that or should you really share in the problem? So these are questions that are unanswered. Can we actually assume risk and maintain financial viability? This is a big challenge for us and I can certainly tell you that at the moment it would be very difficult for us to assume financial risk for large numbers of patients because it requires a whole set of infrastructure elements that we don't currently have and then finally is it really possible to differentiate between providers based on quality or will it just be the price and as you'll see the system has got very severe financial constraints and so the concern of many is that the differentiation won't really be on quality because often the differentiation of quality is very difficult but price is certainly relatively easy so will this be the lowest cost providers? So that's kind of the general overview of the Affordable Care Act, the rationale and some of the major elements and I'm sure that many of you most of it and some of you know more about it than I do. So now I'd like to talk about the the overall impact on our finances and I don't know if the the color doesn't seem to be good on this big screen but if you look at the small screen this is a pie chart and I have focused on the BSD in the BSD revenue 2013 and we'll come to the hospital in a moment and what you can basically see from that is that the two blue areas the large one is clinical revenue so this is the clinical revenue that the BSD faculty earns by seeing patients either from the inpatient or the outpatient accounts for 260 million of our revenue and transfers from the hospital about 200 million so of our total budget of 688 million 460 million approximately comes from our clinical programs so essentially two-thirds of the budget and this includes investment in the medical school the students the graduate programs the shared infrastructure the research everything that we do is included in this and so you can see that the health care budget is a really big deal because what we do at this point is we reinvest money that we earn from health care in our academic programs and that is what is a primary support a major support not the only support of our academic programs now what about the hospital and insurance coverage for our patients so these are the data from the medical center and our patients as you know are divided from an insurance standpoint into two broad categories there are those that are covered by commercial insurance and there are those that are covered by government programs now commercial insurance accounts for 40 percent of our volume if you take the aggregate volume for inpatient and outpatient approximately 40 percent of those patients are covered by commercial payers and the blue cross and blue shield is the biggest and then we have others united a whole series of private insurance companies that I'm sure you're familiar with the names now the importance of this is that the commercially insured patients account for a hundred percent of the profitability that we have and the profitability the reason that we want to make money is that we want to invest in our hospital in have a capital budget and we want to be able to support academic programs that's what supports the 200 million dollar transfer to the biological sciences division so the the commercial patients are account for 100 percent of the profitability and they also cover the losses from the government programs so the two government programs at this point Medicare and Medicaid account for 60 percent of the volume in patient and out patients and these programs don't cover our costs so if you look at them in the aggregate it just in some for some diagnoses and for some admissions they actually do and in some we even make a little money but if you look at it in the aggregate we lose money on both of those programs particularly Illinois Medicaid and Illinois Medicaid is amongst the lowest reimbursa in the country we're in the somewhere between around 45 out of 50 and not only that because of the of the the the problems with the finances in the state of Illinois we wait more than 200 days before we get paid so that's a that's a long time to wait and obviously it causes a lot of difficulty for us now we are one of the largest Medicaid providers in the state of Illinois and I'll show you the numbers and this is part of our mission so we are proud that we do that we're very committed to that we're going to continue to do that but it does provide us with a number of constraints and challenges in terms of just making it because as you can see we have to recycle the commercial so again if you look at the numbers the total medical center patient care reimbursements are around 1.3 billion dollars a year Medicare is 249 and Medicaid is 210 so you can already see that 460 out of 1.3 billion is 60 percent of the of the activity so you can already get a sense that we are paid very much less for Medicare and Medicaid than we are for private insurance and Medicare payments include residency training there's a disproportionate share payment which is going away with the Affordable Care Act and Medicaid is is very complicated I'll talk about that a little bit more in a little bit more detail but but you get the picture that we are very dependent on commercial insurance to maintain the financial viability of the hospital we take care of Medicaid patients because that's part of our mission and just that everybody understand so Medicare is a federal program for people predominantly over the age of 65 although it does cover certain other things like renal dialysis Medicaid is a program for people who are poor and disabled and you know other serious vulnerable categories and this is paid for both by it's a state-run program but significantly subsidized by the federal government so that's just you know sets that straight now if you if you compare us to our peers across the country in terms of the the programs that we lose money on versus what we make money on as we said 60 percent of medical of medical center admissions are covered by Medicare and Medicaid the double AMC if you go to the double AMC academic medical center teaching hospitals about the average median the median is around 50 percent so we're about 10 percent higher each percentage point is probably somewhere between five and ten million dollars a year so not insignificant amounts of money now 30 percent of our admissions are Medicaid admissions northwestern is 15 percent rushes about 20 percent a little bit more than that Loyola is around 20 percent the low 20s Evanston hospital 10 percent Edward hospital in DuPage County is about five percent so that just gives you some sense now if you look at our admissions our Medicaid days this is the University of Chicago Medicine and so we had 46,720 Medicaid days out of a total of 448,000 so 31.6 and the case mix index is a measure of the severity and the higher the number the more severely ill the more acutely ill the patients are and it's an objective measure that is used across the industry to tell how sick your patients are so first of all you can see that we have the sickest patients a little bit higher than Loyola but substantially higher than these other hospitals so Christ Lutheran Loyola Northwestern and Rush you can see that in absolute numbers Rush and Christ and Northwestern are similar to ours but as a percentage because we are smaller than they are we're smaller than all of them other than Loyola we have a significantly greater percentage so this is part of our mission we're going to continue to do this but I just think it's important to understand that this is a challenge for us and we work hard to be able to continue to do this now if you look from the outpatient side and in the emergency room the differences are even more dramatic and just recall that outpatient Medicaid in Illinois is an absolutely dreadful reimbursement both from the hospital side and on the physician side and here you can see the Medicaid outpatient services 150,000 for University of Chicago and you can see 80, 71, 45 for our peers emergency room Medicaid visits you can see the differences and so the University of Chicago medicine the hospital our physicians provide a huge amount of service to poor patients to people who live on the south side of Chicago and I think it's just it's important for everybody to to realize that and to understand that okay so what are the insurance options under the affordable care act because the affordable care act is now going to take an existing system and modify it and it's going to modify it in a number of ways so the first is employee supported health insurance will continue so for the for those of us who are insured from either the the university or the medical center we expect that that insurance is going to continue in without much change at least initially I don't know what's going to happen in five or ten years time but we have no plans to change that but the two main changes are going to be expansion of Medicaid and then the creation of these insurance exchanges which you've read a lot about and I'll talk in a moment about them and these are new marketplaces where people can actually purchase individual insurance coverage and we'll come to that in a moment so let's first talk about Medicaid so as I said Medicaid is a program that is particularly focused on poor people whose incomes are less than a certain threshold level but there are certain blind disabled you know other vulnerable people are eligible for Medicaid and nearly all Americans under 65 with incomes under 133% of the federal poverty line will be eligible for Medicaid in states including Illinois that chose to expand Medicaid coverage and so I think you probably know that that was up to the states to decide that was one of the things that happened with the with the the lawsuit that was filed that that that went to the Supreme Court and it became a state decision and some states have elected to do it and other states have not Missouri doesn't for example but many of the Republican states interestingly of the you know people who are vigorously opposed to the affordable care act elected to expand Medicaid and I'll show you why because they have a big incentive to do that so states have different rules for Medicaid eligibility because it's a state program but as you'll see the federal government will cover the lion's share of the cost so this is going to be a very important thing in the state of Illinois and this is what it's going to look like in Illinois so these are estimates of how many people we think that it's going to be in Illinois somewhere north of 500,000 new people will be covered under Illinois Medicaid and at least until 2017 a hundred percent of the cost of that and these are the estimated costs this is billions now is going to be covered by the federal government and then in 2017 the state will start to kick in but only pick up 10 percent of the cost so that over a over this period of time so between 2014 and 2020 the federal government will put in 12.1 billion dollars and the state will put in 573 million dollars so a very very heavily subsidized program and this was part of the negotiations that were done in getting the affordable care act passed because many of the governors balked at doing it because of the challenges that the state governments were having at the time many of them are doing better now than they were then now with Illinois Medicaid as we said more than three more than 500,000 new enrollees are anticipated it is known though that a significant percentage of Medicaid eligible people never sign up so how many people will sign up is unclear although there are very proactive efforts to get people to sign up and we certainly have very aggressive programs in the hospital to help people who are eligible for Medicaid to sign up for Medicaid so that they can get health insurance there are a number of things that we did to to in Illinois to to facilitate this this 1115 waiver allowed us to start signing up people even before the act came in came into you know was came into being and so there are 115,000 new enrollees in Cook County now now the difficulty is that the the state of Illinois as you know and I've alluded to it on a couple of times already in this talk the state budget is in very substantial deficits so you know about that and the the cause of the deficit is two main problems the one is paying for pensions and the second is paying for health insurance so the Medicaid health insurance roles increased dramatically Governor Blagojevich I think appropriately relaxed the criteria which made allowed people to sign up for Medicaid and there was a huge increase in people signing up but the result of that is that there were the there was no plan to pay for it and so Illinois Medicaid is a substantial deficit now they they're trying to do this they're trying to address this in a number of ways by January 2015 they enacted a law which said that 50% of those covered by Illinois Medicaid will be in risk contracts in other words the hospitals and the physicians will share in the in the risk and in addition to that as I'll come to in a moment there is what has been called rate reform and what rate reform really means is trying to reduce the already low reimbursement rates to hospitals and to physicians in order to save money to try and balance the Medicaid budget so one thing that I think we know will happen is that there will be a larger Medicaid population that's for sure whether it'll be that number or not obviously I don't know and that the projected reimbursement in the aggregate is going to be lower than today because of the over overarching financial circumstances of the state so this is a political process as you may imagine and we are very active in that regard we have an outstanding government relations group Ben Gibson and Susan Scher are the two people who lead it they get wrote me in on regular occasions and we lobby a variety of different people to try and get support in this reimbursement system for the hospital we arguing for a shift of funding to outpatient reimbursement because outpatient is particularly poorly reimbursed and I think in the current situation that's where we are focusing activities and that's where most of the activity is being focused we are asking for reimbursement for medical education there's been a move to try and dramatically reduce transplant reimbursement for solid organ transplants and for bone marrow transplants we're trying to lobby to have that retained we are asking for an effective acuity based reimbursement system so we we are trying to make the case that if you admit a patient that's a normal delivery the costs to the hospital are not the same as if you admit somebody for a heart transplant and that there needs to be an adequate system to recognize the difference in costs to the hospital of those two circumstances and we don't believe that the current system is adequate and then there are special supplemental payments which we need to to retain so how this will all turn out I'm not sure and you know we'll see what happens but as you can imagine there are 200 hospitals in the state of Illinois and everybody is lobbying and if you are sitting in to page county or up in Wilmaire to Anetka I don't think there are any hospitals there but up in that area of the of the Chicago area you have a different set of incentives and and desires than if you're practicing in Hyde Park so let's now talk about the insurance exchanges so the the new government health insurance exchanges launched on October the 1st and the coverage will become effective on January the 1st 2014 and what was the controversy that you're reading about is the the problems with the the the IT infrastructure and the website for the government insurance programs they have actually been private insurance exchanges for a while and their websites I think work pretty well and I imagine although I don't know for certain that the government will get over its IT problems how long that will take you know I have no insight into it all but I'm assuming that at some point they will figure it out now federal subsidies will limit premium costs to between 2 percent of income for those with incomes at 133 percent of poverty guidelines or less rising to 9.5 percent of income for those who earn between 300 and 400 percent of federal poverty guidelines so so this is part of the affordable care act is that the federal government will subsidize poor people to enable them to afford insurance on the exchanges now the exchanges will be available in every state and they'll either be operated by the states or by the federal government or by the federal state partnerships and in all of these there are private companies that are now getting into this business of covering Medicaid patients so they are acting as the agents and the partners of either the federal government or the state government so it's going to be a complicated exchange and a complicated set of options and and we'll have to see exactly how it all plays out now the insurance exchanges will then create an alternative and people expect a more price sensitive market to employer based health insurance so for those people who don't who are not covered by their workplace insurance plan they'll be able to go to the exchange and they will be able to sign up for healthcare insurance in ways that they were previously unable to do the rates that we get reimbursed the rates to the physicians and to the hospitals are anticipated to be intermediate between commercial insurance and Medicare insurance although we don't have enough experience with us to know exactly where those rates are going to be and and we'll see what happens now one of the interesting things that is somewhat challenging for us and it's already starting to happen is that large employers and certainly medium-sized employers are taking a look at the finances and they're saying well the cost we can save ourselves a lot of money on this traditional commercial insurance by just giving all of our employees a certain amount of money and saying go and sign up for the exchange so whereas previously it might have cost them $10,000 per employee you can get into an exchange for significantly less than that and the estimates are that companies can save themselves around 20 percent of the cost depending on you know what the nature of their insurance offerings were obviously if it was more generous they may save more than that if it was less generous they may save less than that but in the aggregate it's around 20 percent and so that they offer them that that's the way in which they cover their health insurance and this complies with the law so this will reduce the costs to the employers it will certainly reduce costs to providers because the reimbursement rates that we're going to be getting is less than commercial and almost certainly it will increase the costs to the employees and we'll show you over here so if you what is envisioned is that in each of these exchanges there will be four levels of coverage that you can sign up for and it's bronze, silver, gold and platinum and they will differ so everybody every plan will have a certain minimum amount of coverage and then the whether you select the one or the other determines on an actuarial basis how much of the cost that they that you're expected to incur in your health insurance so this is not an individual one it's done on an actuarial basis that people in the bronze will be will be picking up 40 percent and the plan will pick up 60 percent so the plan will pick up 60 and you'll pick up 40 so those that plan has a low premium but a high deductible and a high and high copay so when you hear about high deductible insurance plans on the exchanges that's what we're talking about predominantly the bronze plans where it's anticipated that you will be picking up 40 percent of whatever the your health insurance is going to cost and the plan will pick up 60 percent and you're going to have to pick up the difference on the other hand the platinum plan is going to pick up 90 percent and you're going to pick up 10 percent so obviously what's going to happen is in the platinum plan you're going to be paying a high monthly premium and relatively low deductibles and relatively low copays and and that's the way it will work and I'm assuming although we don't know exactly how it'll you know all the details yet is that there will be a series of options with different coverage under these four levels of insurance so so that's kind of the overview of the of of the insurance options now now how is the Affordable Care Act going to be funded because obviously I think everybody understands that if you are going to add 40 million people to the insurance rolls and then switch a whole bunch of people over who were previously covered from their employers to individual plans and you're going to subsidize them this is going to cost a fair amount of money it's not going to happen you know for nothing so the coverage expansion and other aspects of the Affordable Care Act there are several mechanisms so the first is there are substantial cuts in Medicare reimbursements to providers so this is as we said this is the federal program that covers people over the age of 65 and and as you'll see there was there are significant cuts and I'll go over the details for the University of Chicago in a moment secondly is Medicare and Medicaid dish this is disproportionate share payments up until now we have been getting special payments for taking care of a large number of poor people and uninsured people and we got subsidies from both through Medicare and Medicaid and those have been eliminated or are being eliminated actually quite rapidly and the rationale for that is that in future nobody's not going to have health insurance so there's no rationale for the disproportionate share payments there are new annual fees on pharmaceutical the pharmaceutical manufacturing center there's an annual fee on the health insurance sector a new tax on the sale of medical devices and as you know with a shutdown of the government this was a prominent feature I know why this one received so much attention but it did a new tax on payments from in from indoor tanning services so somebody had it in for the indoor tanning services and you know they they're really going to take it on the nose and then starting in 2018 the law imposes a 35 tax on employer provided health plans that exceed $10,200 a year in value for individual coverage and 27,500 for family coverage so our plans are not at that level these are the so-called Cadillac plans most of them exist through I presume either very highly paid executives or unions that have negotiated very robust and generous insurance plans as part of their negotiations with employers now this is a slide that's difficult to see so why don't you focus on the bottom left but I wanted to just show you that it's a credible thing so this is a material that we received from the Illinois Hospital Association this is the official organization that represents hospitals in Illinois it's part of the American Hospital Association represents all of the hospitals in the United States and what they did is they analyzed the Affordable Care Act in great detail and then they sent each hospital what they estimated would be the cuts that they would have to expect as a result of these reductions that we've been talking about and this is over a 10-year period so we've got there in two categories existing legislative Medicare cuts and existing regulatory Medicare cuts and the sum total of those over two years is $286 million so as a result of what's already been enacted and in fact we're already operating under these new financial rules over the next 10 years the medical center will be reimbursed about 300 million dollars less than under current rules about 30 million dollars a year now in addition to that there are additional Medicare cuts that are under consideration and I don't know what's going to happen in Congress just as you don't know what's going to happen but there is obviously ongoing negotiation between the president and the Democrats and the Republicans to come to an agreement and we've heard about grand bargains in the past and the grand bargains all involve trade-offs around these issues and all the different lobbying groups lobby but there are a whole series and we don't have to go into them in detail of additional cuts that are potentially on the table and others that we may not even know about and what the American Hospital Association estimated that if all of those came to pass worst case scenario or maybe not worst case but this is certainly a bad scenario there would be an additional 320 million dollars of cuts to the medical center in reimbursement over the next 10 years so a total of around 600 million 60 million dollars a year compared to the 30 million dollars and this is not just they didn't just single out the University of Chicago this is the big challenge that is being faced by academic medical centers across the country and if you go to any of the dean's meetings or the hospital president meetings you'll see a very anxious looking group of people huddled together talking about a variety of things and this is by and large what they'll be talking about is how are we going to maintain our organizations in a financially viable state and respond appropriately to these to these cuts so so that's kind of the overview of the finances we again you know it involves a lot of lobbying Ben Gibson is actually in Washington today meeting with a variety of people from the Illinois delegation some of them are alone we have a we have a lobbyist in Washington we have a representative of the University of Chicago in Washington some of the meetings are together with our peers with Loyola and with Northwestern and with Rush and we are asking them to maintain funding for graduate medical education to maintain funding for hospital-based clinics and we always try and lobby on behalf of the National Institutes of Health but as you've all noticed we haven't been particularly successful in that regard and I wish that we would have been more successful so just to summarize then what the overall dynamic is anticipated to be as a result of the affordable care so the the good news is that they're going to be fewer uninsured people in this country and this is an estimate we had a group of outside advisors and and this is the number that they came up with you know these are obviously estimates so what they predict is that in Illinois currently or it's a little less than that now 2013 they're 1.1 million or whatever the number is uninsured people and this is going to go down not to zero but to somewhere around 400,000 so a very substantial reduction in the number of uninsured people in the state of Illinois now the the challenges though are that we expect that commercial discharges will will so this is you know discharges from the hospital the number of commercial discharges will also go down significantly and this will this is because essentially the growth of the exchanges and and so you can see the two mirror each other insurance exchange growth getting up to 60,000 discharges commercial discharges coming down by 60,000 and and this is a big unknown number I mean this I think is potentially our biggest risk is that if the reduction in commercial discharges were at a 10 rate for example given what I told you previously about our how our finances are are supported or how our programs are supported from a financial standpoint that would be a very very serious challenge for us. Medicare discharges are anticipated to go up as part of everybody getting older and Medicaid discharges are also going to go up and this is the feature of you know increasing Medicaid and covering these uninsured people through the Medicaid program predominantly in the state of Illinois so that's the dynamic and and you can see there are many good things about it from a population standpoint and then if you look at it from the University of Chicago medicine standpoint financially this is a real challenge for us very very difficult so the summary of it is that the economic benefit of a smaller uninsured population is more than offset by the costs of the low Medicaid reimbursement and the need for us to assume risk the marked reduction in revenue streams that we receive through the Medicare program and additional cuts being considered as part of a budget grand bargain that would compound an already difficult situation for the medical center and for the biological sciences division now the erosion of the reimbursements that we receive from commercial insurance may be the major financial risk and this is a big unknown shift of commercial insurance to exchanges and then downward pressure on commercial rates okay so so what is our response and you know obviously this is challenging but I I wouldn't be standing here if I didn't believe that we could meet the challenge and I'm actually confident that we'll be able to do it we have to figure it out and you know at this point I think nobody does but but we are actually looking at things in great detail and and what we are seeing in Illinois if you analyze the data in Illinois in the last couple of years is that these national trends are exactly happening over here commercial insurance has been declining as I said by 2015 50 percent of Medicaid will be in risk contracts health systems have been consolidating and everybody is thinking about geographic expansion through making partnerships and you open the newspaper on a regular basis and you learn about some other partnership between one hospital and a health health systems one hospital and other hospital physicians and hospitals etc now we we did when we we looked at our finances together with the advice of an outside consultant what we what we found was that in 2013 we had a positive operating margin this line over here is the revenue the red line at the bottom is the expenses and they predicted that in 2014 if we didn't make some changes that the revenue line and the expense line would come together and thereafter if we didn't make any changes the expenses would exceed the revenues and we would be in an operating deficit situation and so what they told us is that for 2014 if we if we did nothing we would be down here at about minus 20 million dollars a year and if we did a series of things we could get ourselves up to around 40 million dollars but that required taking about 60 million dollars out of the hospital budget or improving efficiency so it's the combination of taking money out of the budget or making things more efficient to get to 60 million dollars that we didn't previously have and so this was not apparent to most of you but the budget process led by Sharon O'Keefe and the vice presidents and other leaders in the hospital with a lot of involvement from faculty was to really try and do that and we are actually on target at this point to to be somewhere around 40 million dollars and there were a whole series of interventions which I'll come to in a moment which enabled us to get there now it's early days yet and I'm not by any means complacent about it but I'm not discouraged now as you can see as time goes on and some of these additional cuts kick in over time the situation doesn't actually get better it gets worse and by FY 18 we have to we have a bogie of about 100 million dollars and you can also pick up the newspaper on a regular basis and you can learn that X hospital is laying off employees and they have to take you know at the University of Pittsburgh which has got a huge network they're trying to take a billion dollars out of their operating budget and everybody has got a set of curves that look just like this I mean the details are different but the principles are the same at essentially every hospital in the United States obviously if you are in an academic situation like we are if you're an inner city area like we are with a lot of poor people who you take care of then the challenges are greater but everybody is facing this to a greater or lesser extent and it is a significant challenge which we have to figure out how to deal with so what we we went through this strategic planning process there was an as I said an outside consultant there were about 60 people involved that included faculty and department chairs section chiefs members of the board of trustees senior leaders from the hospital and there were a number of ways that were identified to improve our revenue and to reduce our cost and improve efficiency and obviously it's it's obvious that the two will work together so we revenue growth the key is building eminent clinical programs I think that's always the basic thing that sells very well and that's what we absolutely have to continue to do we have to continue to improve the patient experience the quality of care the quality of the experience and the safety we have to build and expand a network by you know establishing relationships with hospitals with health systems we have to broaden our geographic presence outside just Hyde Park we have to develop novel payment methodologies such as bundled payments how we take risk in reducing cost we have to improve productivity and throughput in the operating rooms on the inpatient beds in outpatient clinics in the emergency room and and and there's already evidence that that's happening that through the same number of operating rooms we're doing significantly more operations there's a huge amount of opportunity in the outpatient clinic we did not efficiently use the decam the average number of turns per half day in the decam was two turns per half day two patients per half day session the average number of patients seen per room in the decam over a over a five day period that's not to say that on Wednesday afternoon which was the preferred or Wednesday morning which might have been the preferred time that every physician wanted to be in the clinic you know they weren't six turns per room but on the average you take 360 you know the number of days that we work five days a week two turns per room two patients in a four-hour session so you can't make it if you have that sort of metric okay reduced cost of purchased goods and services and John Stegner is sitting there he's the head of our supply chain and he has actually done absolute wonders for reducing the cost of supplies negotiating contracts with people that we purchase stuff from and doing it in a really clever way working closely with physicians he has saved us multiple multiple millions of dollars reducing average length of stay reducing episode costs for complex conditions and this involves very close collaboration between the physicians and the nurses and the hospital and figuring out you know how can we deliver care care that is as good or better at lower cost can we use generic drugs can we reduce the length of stay can we not do as many MRI scans as we did before a whole variety of things that we can do we need to build capabilities in population health management and this is a tough one and but we have a number of people who are quite experienced Brenda battle is sitting there she had experience with us in St. Louis and Sharon and I recruited her from Barnes Hospital and next to her is myyumi Fukui who heads our managed care program does the contracting and she together with a number of the physicians and David Meltzer is very important in this regard and Stacy Lindau has programs we're trying to figure out how can we enter this world of population health management where we can help take care of broader populations take risk and still provide outstanding care at an affordable cost and then we have to align the BSD clinical programs with the hospital goals and I think that goes without saying and and this is a process that is actually starting to work very well and we've identified a number of important areas where we are investing in programs in the BSD and and in in the hospital and growing them together so so if you look at the five imperatives that we're focusing on the first is to build a network that will increase commercial business and broaden our footprint the second is to develop new reimbursement models while allowing us to continue to leverage fee for service as long as it's in existence we have to develop a cost competitive position and there we need the support of the faculty transform the care delivery model across inpatient and ambulatory settings and then align clinical and academic missions through transparent funds flow and incentives and that's a work in progress so I would say that this is a doable thing it's not going to be easy it's not business as usual so I the first message that I would have for you is that we're going to have to alter our our way of doing business to incorporate you know the things that we've been speaking about today at the heart of it is outstanding clinicians who provide innovative leading-edge patient care focused on complex conditions patient centered high quality service with the higher standards of patient safety we need to be cost effective in other words we need to be able to go to the payers and we need to say we provide value from an economic perspective when you take into account the complexity and the outcome so that even though bone marrow transplants are not the cheapest at the University of Chicago when you take into the account that we have the best outcomes of all of our peers or we're at the 99th percentile whatever it is it's worth the additional investment we need to integrate patient care with research and education and this has always been the way in which we've differentiated ourselves from our competitors and will continue to be in the future so although the Affordable Care Act will challenge us in many ways if we can reach these goals I'm confident that we will continue to be successful so I'm delighted that we I had the opportunity that you gave me the opportunity to do this and we'll be happy to answer questions. Thanks Eddie for spending time talking to you today. Just a good question. The first one we focused on the University of Chicago you had a key slide in the beginning about a left hand column was the current infrasurist system, right hand column, published management of these based systems and you said specifically that right now University of Chicago does not have the infrastructure of your ability to do risk plans well. What is that infrastructure capability that needs to be developed? What are the plans to develop that? You know it's a variety of different things I think very central to that is going to be information systems so it's going to be information systems that is going to give us real-time readouts of how people are doing you know perspective we discharge a patient from the hospital they go and see somebody in our network who's a primary care physician primary care physician doesn't know what's going on they order an MRI scan we in order to effectively manage a population in a cost effective way now that particular MRI scan may have been indicated but it may not have been indicated we're going to need to have information regarding that. Medicine reconciliation for example is a huge issue you know we looked at this in St. Louis and what we found is that when we discharged people from the hospital they had multiple fillings of the same prescription from different providers and often they didn't even know that these were the same medications one physician wrote so that's going to be essential we're going to have to have reach out into the community so we're going to have to have a much tighter relationship with providers such as federally qualified health centers such as other community hospitals on the south side of Chicago where we can rationalize decisions about who gets admitted where so that if somebody has a routine pneumonia and they need to come into the hospital for a couple of days of antibiotics they don't have to go into the center for care and discovery they should go into a community hospital which is qualified and able to provide exactly the same level of care at a lower cost and when the person if they get really sick and they need to be intubated in the ICU or you know something really bad happens they get transferred to the University of Chicago so it needs to have an infrastructure that has strong relationships between the home medical center and then resources in the community and then the information systems to monitor in a much more real-time way what's happening to patients and how to intervene both to improve outcomes but also to reduce cost no no these these are under the affordable care act so currently it's approximately 50 50 although the state of Illinois there's a subsidy from the hospital so they pay about a third so at the moment the state of Illinois pays about a third the federal government pays 50 percent and then there's this tax which pays which pays about 15 percent it differs in each state this is what's going forward so this was in in order to get people to sign up yeah yeah and unfortunately you know that doesn't impact the state I mean that impacts the city budget and so the state budget is a completely separate issue and you know what what he's trying to do is he's trying to balance the city budget and the fundamentally the only way he can do it is by raising all of our property taxes still you know I don't know that I can answer that for all I think what you you know I you can you you can turn on the TV at any point in time and depending on which channel you choose you'll get a different answer so if you choose Fox you'll get one channel you'll get one answer if you choose MSNBC you'll get another another answer and I'm not smart enough to figure it out all I know is that some people love it and some people hate it and you know I don't know I mean you can you can understand that if you're against government you're not going to be happy with us but you know a lot of these elements of the of the plan are actually very good elements and the the issue is how do we implement it and how do we afford it and that's what we're focusing on and you know this is not a political thing at all I mean we we're just trying to figure out how can we continue to provide outstanding service to our patients how can we continue to provide a venue where our faculty can continue to do research and our students can continue to be trained our students and our residents and you know as I said we have you know and as you heard from both Brent and Mayumi we have particular challenges in Illinois which are unfortunate but you know we'll just have to figure it out so tomorrow tomorrow's next you tomorrow there's been a lot of data they've been pointing to post-acute care as a big source of the variation in costs around the acute care and so um and obviously post-acute care takes on uh a crucial importance in the frontline payments and in the government care models like ACOs so what is the University of Chicago medicine doing in terms of improving effectiveness in our choice of post-acute care providers and to monitor the services and quality of the frontline efforts so we have a huge focus on that Brenda Battle is the person who is sort of helping spearhead this so Brenda would you like to answer the question um the opportunities that we have to enter and to defer provider relationships with the network of post-acute care providers and we are planning over the next eight months to actually have some more closely tied relationships with post-acute care providers who want to work with us in that type of relationship where we can share data together we can deliver services in a much more coordinated way so we actually have a very strong with um Chad Wayland and several other people um active people around developing a very strong post-acute care network. Yeah Rena what's next um so um it's known that consolidation can have two effects. The first it can help you on bargaining the better input costs on the course of time to also work on provider benefits. It can also allow you to bargain better with insurers to get better reimbursement rates on the other end very efficient on each of them. What is your position on that and is the University of Chicago Central doing to install the eventually? Yeah um you know so obviously that's critical um and that's part of the driver of why we are very actively engaged at the moment in trying to establish these relationships. As I said Mayumi Fukui is the person who negotiates on our behalf uh she does it in an absolutely outstanding way and we we're going to hopefully use both our name the quality of our physicians and our hospital and the services that we provide and and the efficiency of our care to be able to get the best rates so it's a it has to be an absolutely central part of the strategy. You know the rate at which you're paid is a absolutely key determinant. Trump and its impact on our community as you know there on the Trump's side and um study came out earlier this year from the American general public health. I'm a great grand old called Trump's Deserter, Trump's Deserter and what it says um the longer it takes the tribe to a trauma center the greater chance of dying sorry. Um I understand you have the power to expand access to trauma care. I'm here today to actually do the right thing and help us get the trauma center. Now on the May 28th you said you would collaborate with others to expand access to trauma care and we're trying to get hospital leaders together to find a solution, advocate for the community you can offer or suggest as a host to the trauma center where he needs your help. Um so again I'm here today to ask you to do the right thing and come to the table. Now I don't know about them but I know a lot about maladies, ailments and illnesses and the illness that's plaguing our community is the life of a trauma center and you have a remedy. So again I'm here to come to the table. We have a meeting which is going to January with hospital leaders on the south side and you should have an invitation for you to attend. I want your willingness to commend your attendance. Yeah I know I'm not committing here. I mean that's not the purpose of this you know to come and ask me to make commitments. I think what I've shown you here is that the University of Chicago is extremely committed to the health of the community. We have a level one trauma center in Koma Children's Hospital. We have a burn unit. I showed you the numbers on our provision of care to Medicaid patients on the south side. We have a finite capacity to take on challenges. What I hope I've shown you today is that our plate is extremely full. At the moment fortunately our big problem is we don't have enough beds and we are struggling on a daily basis to figure out how to do, how to continue to provide care in the face of shortage of beds and shortage of access in the emergency room and a variety of other things and we will continue to do that. We don't have the capacity to start a level one trauma center. The basic issue that I've spoken about many times is that 20 years ago there were 5300 inpatient beds on the south side of Chicago. There are now 2000 and as a result of the 60% reduction in inpatient beds on the south side of Chicago it has fallen on a very small number of providers to provide health care and so we are doing the best we can to take on a trauma center would have a major impact on the existing programs and it's not what we intend to do. Monica I think you've raised a really important question and a really important issue and you've pointed out that at the moment we are focused largely on specialty care. We have some primary care it's of high quality but it's relatively small and we're going to have to figure out how to acquire additional capacity in primary care. So some of it we will invest ourselves but if you look at the cost of acquiring a primary care network of scale that we would need it's actually unrealistic for us to do that at this point given the financial challenges that I've outlined previously. So I think that what we will do is we will expand modestly in Hyde Park and in selected areas and then we will partner with existing programs and you know we are in the process of trying to you know develop strategies along those lines but we clearly are going to need to have collaborative arrangements which will allow us to refer patients to primary care physicians who are in our network. I don't believe that they all need to be employed by the University of Chicago they don't all need to be University of Chicago faculty they do need to have a certain minimum level of quality and experience and board certificate and so on and that's one of the challenges that we face but primary care is going to be important or is important. Richard Kirk, MSU Bay. There's been a lot of data that's indicated that I'm part of health insurance is to the older population a lot of money is spent there and there could seem to be a way of trying to I know they talked about death panels in that previously but giving counseling to people at that age for the families in that so that they don't have to go trying to do all these extra procedures to try to keep a person or counseling to be very beneficial and really would reduce a lot of costs. Yeah you know I think that over time you know addressing difficult issues like that of where do we invest our health care dollars and you know what's appropriate and what's not appropriate it's a debate that we have not ever had in this country and we're going to have to have that debate sooner or later but as you have pointed out it's very emotional it's very difficult to have a rational discussion and unfortunately if you just raise the topic it immediately leads to allegations of death panels so I don't know on a broader scale we can have that discussion in here and as you know the decision is a complicated interaction between the family and the patient and the doctor and etc so it's a key issue and I don't know how that discussion will get started in this country but it needs to be. Dr. Bonesy thank you very much for your talk I appreciate it. I have one quick question for you which you've been elaborating on the way the university is facilitating the role of some of the Medicaid eligible that are not signed up at this time? Dr. Bonesy mentioned the 1115 waiver and county health care rolling 115,000 Medicaid license to the expansion that enrollment or that signing those first person persons up and tapping at the federally qualified health centers we are now currently looking at an opportunity to become a certified organization in signing people up for the exchanges we finalized that over the process of completing an application. It seems to me that the economic state of the south side is a big factor in the challenge here and it got me wondering what the university and the university is a big economic force on the south side so it made me wonder could what more could university do to help the south side be in a better economic state? You know there are many pro so you're correct the University of Chicago is already I think the major economic engine on the south side of Chicago so between the BSD the medical center and the university we employ about 15,000 people. The investment in buildings not just the CCD but all of the extensive buildings that are going on on the University of campus if you haven't noticed you just go across Ellis Avenue and you'll see lots of cranes all over the place those have provided a substantial number of construction jobs. There are very proactive programs and you know Brenda might talk about them in which we are focused on providing contracts in the regular part of our business to firms owned by minorities and by women and also ensuring that there is adequate representation of people who live on the south side. There are programs there's a program that the University of Chicago promise that the university started I believe it was last year to help young kids from the south side apply to college and they provide them with assistance so there are there are a whole series of I think very constructive and productive programs that the university broadly has started we have many in the University of Chicago medicine in the urban health initiative and in other areas I'm sure we can always do more and if people have suggestions of programs you know the list of programs that have been implemented successfully is very long and in fact if you it comes from all over the place the medical students and the residents have done an unbelievable job in starting and staffing free clinics in underserved neighborhoods we have faculty who go to federally qualified health centers we provide services in you know interventions to people from federally qualified health centers so there are very extensive interactions I'm certainly not saying that we couldn't do more but but I think we're doing a lot one more question I'm going to 2010 the hospital's community health needs assessment identified violence and injury as important strategic plan but it was not implemented in the 2010 health thing but in this in the same plan it says that in 2014 the hospital is interested in convening a meeting of other doctors health care providers and community groups to address violence and injury on the south side so I guess I just asked again how how does the hospital plan on doing this it's in the Affordable Care Act and the community health needs assessment published by the hospital so maybe that is kind of framing it more in the language you were looking for but how does the hospital plan to commit to doing this in the next year yeah so again Brenda's spearheading our efforts in that regard and is behind the community benefit programs that we have so I'd like to start by saying the community needs assessment the community actually said that the most pressing needs for access to health care people who visit our emergency private board in the class a year obesity for children, diabetes for adults, asthma for children and colorectal cancer and breast cancer those are the needs that the community told us were the greatest needs yes they did also say that uh SBDs actually transferred these diseases and kind of violence where they're issued their important needs as well but we are addressing in the next year or two are the most priority needs that the community said and as we do that what we committed to do was to talk with and discuss with other organizations the public health issue around climate violence and that we could engage in the larger public health issue and those and stuff so that will prevent people from having cancer so next week Helen Darling CEO National Business Improvement Health for the large employer perspective right on plus work


You guys have, I say guys, this is a problem. Who wants to yell at me every time I say guys? I'll do that. Don't even need to just go, eh. You have a guys jar? Yeah, I don't do jars. Do you have to just tell me? OK, so all day people have been working on empathy and why and how. So I'm thinking, well, what do I do with my half hour, since that's what we're talking about all day long, right? And so what I want to make sure I do is that I actually get to the real stuff, the real reason I'm here. And when I'm prepping a talk, I always come up with this well-organized and thought out series of slides and stuff.  So I'm going to see how the slides fit in. But I really want to make sure that I talk about the real stuff, OK?  Right? OK. So and also I also debated coming in and saying, hi, I'm Alex and I'm an asshole, which is also true. And I kind of found a workaround.  And that's what I want to talk about. And it really involves shutting up my inner dialogue and choosing a different dialogue. That's really the big part of it.  And often it's two people. One of them is like, can't you see I'm hurting? And the other one's like, oh, you're hurting. And so then it just goes back and forth, right? And we don't get anywhere. So what do we do with that? What do we do with all the hurting that we're surrounded by? And how do we make it into a life that we can stand? So that's what I'm hoping that I will end up having talked about when this is all over. Oh, you know what else? I can't see my presenter notes because I didn't arrange it so I could see them. So we'll see what happens. The first thing that I want to ask of you is if you are willing and comfortable to participate in a little exercise. And if you're not comfortable, conveniently, you can just sit there and no one will know the difference. No one can tell who's doing the thing and who's not doing the thing. So if you're comfortable doing it, I would suggest putting both feet on the floor.  This is something that the Zen Buddhists teach us, that we can balance on a particular point that will make us upright, but still relaxed.  Okay, and so your hands would be on your lap if you chose to move your hands. And I want to invite you to take a few breaths, noticing what kind of breaths they are, without doing anything to change them. Just watch your breath going in and out. Notice whether it's shallow or deep, rapid, slow. And if you'd like to, you can close your eyes. This will be no more than five minutes.  Again, without judging it or trying to change it. Just let it happen. Notice any sounds that are happening around you. You hear air flow, people, your own stomach, any smells or tastes, bodily sensations. Just notice and then turn your attention back to your breath. Breathing slow and deep. See if you can breathe down into your abdomen. Feel your chest and your stomach both rise when you breathe. Let yourself fall into a rhythm. And then turn your attention back to the sounds around you, smells. Maybe the feeling of the air on your skin. The feeling of your feet on the floor.  Thoughts. See if you can notice the thoughts and then let them flow down past. Maybe your thoughts are on an earlier talk or something that's gonna happen later. And maybe they're right here. Just notice. Turn your attention back to your breath. Let yourself keep that slow rhythm. And then notice if you have any emotions or anxiety. See if you can identify emotions and give them a name and then let them go.  One more thing. With all your attention on all of these things. See if you can notice what you want most in the world or what would bring you joy. Okay, so why did I do that? I did that because empathy to me is a really visceral practice.  It's not a phrasing of things that you can plug in words and you'll say it correctly and it'll be empathy. It's knowing yourself really well and having the ability to turn your attention to someone else and learn them in a similar way. So hopefully that will bring us all into the same sort of mind space and see where we go from here. What time is it? Okay. So there's a lots and lots of conversations about empathy going on. So I wanted to try to explain what I mean by it. What I mean is when you come to another person and you recognize in that other person your shared human experience. So if you meet up with someone in there upset about something, you notice that upset and you think, oh yeah, I can understand that, right? We have things in common that we want. We have, we want food and shelter and we want the companionship of other people and we want to feel good about ourselves. All of these things are across the board human traits.   So like if I told my mom that I lost my job, her reaction would be, oh no, oh, and suddenly I would be taking care of her, right? Because she has feelings about my problem. And so that's different from empathy. Yeah, it's feeling about somebody's feelings, but it's not the same thing as reflecting their feelings, understanding where they're coming from and be like, oh, that must be really hard for you, right? You don't take on, you don't lose yourself. Yeah, that's what I said. I don't know if you guys can read this, if not, don't worry about it because the slides aren't important. So recognizing in another person something that's inside you, that's what I mean by empathy.  They all find babies to be inspiring in some way, whether they think they're cute or want to throw them across the room. Okay, babies was a bad example. They all long for the same sorts of things that we long for. They all have frustrations and they all get scared and they all lash out, most of us lash out. I think there are some people who don't, I'm not them. So a teacher once suggested to me that I try on this idea. What if everybody I meet is doing the best they can to get through this life, given their skills and whatever. A lot of people have really, really bad strategies, right? Like abusive partners, for example. Time out. Strand, hand up. You guys all know Strand. Who else is here that's staff? Anybody? Who are you? I can't see who it is. Okay, these people all love you and if you get triggered by something I say they would love to talk to you if you want company. So all you gotta do is get up and walk out and maybe wave, they will be watching to see if you want attention or not. And I might say trigger things. So okay, I was gonna say that at the beginning, I forgot. Okay, so you have an abusive spouse, right? And they have horrible strategies for getting their needs met. But what their needs are are like trust, care, right? Safety, a lot of people use safety as a bad one that results in some nasty strategies. My point is I was given this idea what if everyone is doing the best they can to try on and I tried it on and it changed everything. It meant that I could meet all kinds of people and I could see them as people, right? I also, I was given this idea of unconditional love which Karl Rogers who's a psychologist, a humanized psychology, I don't know if you guys know. Anybody know Karl Rogers?  He said that what people need for a growing relationship for a relationship in which they can grow and blossom. They need empathy, authenticity and unconditional positive regard. And that like that last one stuck with me, apparently that means people actually need to be loved. They need unconditional acceptance which must mean it's possible for us to do that. Anyway, so this has allowed me to get closer to that.  So I back up. What if everyone is doing the best they can? How often do you not find it easy to forgive yourself? Does that ever happen? Anybody? What if you're doing the best you can to get through this life and sometimes your strategies kind of suck? Self empathy. Self empathy is a term that comes from, as far as I know, the creator of nonviolent communication which you're gonna hear about tomorrow. Self empathy is the ability to sit with yourself and listen to yourself the way you would listen to a close friend.  You could sit there and you could listen to that story and you could say, God, that must have been so hard. Right? I mean, what would you do if your friend was in that position? That's the idea of self empathy.  We have a meditation that we teach at my TRIA called befriending which involves sitting with yourself for a long time and just having a conversation where you say things like, I'm so sorry that happened to you and you did the best you could. So does empathy come naturally? Right? We're told that babies automatically have empathy, right? And to some extent, it does come naturally.  Right? And then what we do in that circumstance is we create distance instead of drawing people together. So it comes naturally up to a point but then after that, that's when the difficulty comes in and that's when we learn to go back to our breath. One of the practices that I've adopted gradually over time is to come back to the breath automatically. So when I get faced with something like this, ah! You take a deep breath and that rhythm because you practiced for years comes to you automatically and you're able to start noticing what's going on. That was a loud noise, right?  I can go, I just heard a loud noise. What's that about? This person seems to be upset, right? I get more access. To me the point of empathy is not that it's an obligation or that it's gonna help everybody else but that it helps me make sense of the world so that I can choose what I wanna do next. There's a lot of times I don't choose, right? A lot of times I react.   Then I can take a whole different approach, right? But it doesn't take being a saint.  Seriously, I mean, I know people who are nice all the time and consider it and they just automatically empathize and I just don't even, I don't know. I have to work at it. I make it hardest to empathize with me when I need it the most, right? Because that's when I'm weird lashing out, yelling, whatever, or some people yell really quietly. Has anybody had a relationship where the yelling is really quiet? Anyway, empathy is the hardest when it's most needed, which is why we need that ability to change our perspective, right? You know on Twitter, right? What happens on Twitter? Like your fingers have already sent that tweet out before you have a time to even breathe sometimes, right?  I'm talking about like people talking about some intricate part of TDD, right? How much do you mock? And that's Twitter, you know, you could take a minute to breathe. Nobody would even know. Breathing's not enough though. I don't know what the next slide. Nope, nope, let's get that. Breathing's not enough. You have to have resources. You have to be able to either sometimes get some empathy from someone else or do some self-empathy practice, which I will say is an advanced skill to be able to just pull yourself away and do it all by yourself. But having good friends to go to is useful. I'm curious if this has ever happened to anybody else.  So this is like an everyday thing, right? An everyday occurrence. You have somebody express as a feeling and the other person comes back with, oh yeah, I'm totally disregarding your feeling. We're gonna talk about my feeling. That's part of how we get ourselves in trouble. And you can see this. You can see this in GitHub threads, right? You can see it on Twitter, you can see it everywhere. And I think the problem I run across most often in trying to talk about this with people when it has to do with software is that they don't want to acknowledge that they have any feelings. That wasn't a feeling, right? So somebody puts up a pull request, somebody responds to it, right? And there's just like no acknowledgement that there's any feelings in there. But that's part of what the breathing exercise is about. There are feelings, we just need to identify them and let them come out and talk through them, right? See what we wanna do with them. So in a circumstance like that where there's two people having feelings, the question is, you can ask yourself, this really doesn't work if you try to make somebody else do it. It's all about your own practice. But you can ask yourself, right? Can I step back and listen? You will amaze yourself. If you take on this practice and you do it for a while, you will amaze yourself because you will be in a fight with someone you love and you will suddenly start listening to them. And you'll be like, dang. But if you don't have the emotional resources, then you don't, right?  So I don't, sometimes when I'm working on empathizing with someone, 22, sometimes when I'm working on empathizing with someone, they are telling a story about me that I don't like, right? You always do this, you never do that. You can't possibly understand where I'm coming from, whatever. I don't have any control over that. I only have control over the story I'm telling myself, right? And so I can listen for judgments and I can replace them with curiosity about who they are and where they're coming from. But I can only do that if I can let go of their story about me. I have to just let it roll on past. I can go, oh, I hear this is a story about me. You're probably not into discussing that right now. I do that in my head. Let it go. Maybe later we talk about it. Hey, you remember when you said I had horns? Did you mean that? Like later, but not now. Okay, oh, this is important. Okay, I could just stand here and say this for 30 minutes and I'd be pretty happy. But really, okay, let's make sense out of it though. What do you do about being right, right?  What do you do? You say, here's a person who's having strong feelings. How can I help? That's what you say. If she says, shut up, don't talk to me, then guess what you do?  Right now in the world, there are hundreds of people who are telling a story about me that I don't like. Maybe not hundreds. But I mean if I think, my parents, my parents are in the middle of living a story about me that I don't like. They're not interested in my opinion of that. They're interested in a lot of things I'm not interested in and so I know what's mine and I know what's theirs and they get to keep theirs and I get to keep mine.  And I can't fix it and I can't own it and I can't take it from them. I can't insist we're gonna talk about your story about me if that's not what they're into.   I was wondering how I was gonna get consent in here. You can empathize with someone without their consent because that's in you. Telling them that you're empathizing with them when they've told you not to speak to them, not the same thing, right? Okay, I won't belabor. Wonder how much more is left, I totally have no notes. Okay, so these are your strong fields, right? You have ideas about the statistics and you have feelings and you have defensiveness and you have all this stuff. You come back to the breath and you notice what's going on as best you can and then you make a choice because you have a choice all the time. We have a choice. Okay, I say this, I have already said I'm an asshole, right? So just to be clear, I don't mean it's an easy choice and sometimes it's too hard.  But ideally, take a breath and you notice and you choose do I want to be present for this and what do I need to be present for this? So if I go visit my mom, which has been known to happen and she starts saying things that I don't like hearing, fill in the blank, you all have moms. Okay, that's probably not right. Fill in the blank, you can all imagine my mom. Okay. The question, do I want to be present for this is an important question. I get to choose. There are people who are not people I spend time with, although I do spend empathy on them because that's for my own well-being, my ability to see the world and figure things out. But there are people that I don't engage with. I don't say, oh, bring me more of that diatribe so I can empathize more. Because I mean, I did that for a while with you know who. And then I said, this is getting old. I'm sure there are other people I could practice on. Anyway, you get to choose, that's the point of that. If you choose empathy, it's time to get curious, start exploring what's going on.  Don't just sit there and keep taking it, right? If you don't want to do it, don't do it.  Right, that shift just changes everything. How much time do we have? Oh, no time, good. All right, you cannot see these, but I will send them to you if you want. This is important. I want to reiterate, this is not a moral obligation that I'm offering you. It's a way to feel less frustrated and confused about the world, right?  It's that, it's for you, it's a choice. Huh, 29, although I have a last slide. This is a homework slide. Nothing, dead silence. Okay, I go in my head, what's the reaction gonna be? That was not one of the ones I thought it was. Okay, so there are lots of people you can practice on, right? Do I have a mouse? No, I don't have a mouse. There's a little baby. You could try to empathize with the baby, make some guesses. You can empathize with pretty much any of those people. You can make up stories about them. You can make up alternative stories, three or four separate stories, and then say, I wonder how I could find out which one is real, or if it's a different one. Then there's a person in blue over to the right. You wanna really work, you could work up some serious empathy for that person. You can do that. Okay, that's all I got to say. Thank you.