Welcome to Toffy TV, here is the Everton News Daily. Nathan Patterson has been called into the Scotland squad for their upcoming Euro 2024 qualifying games against Cyprus and Spain. Patterson has been out of the first team pitches and picking up an injury in Everton's 4-1 home defeat by Brighton back in January. They were hoping to have him back and available. He came back a few weeks ago and picked up another slight knee injury but has played a couple of games for Everton's 121 side. He is training again and there is hope that he will be in Everton's squad for the trip to Chelsea this weekend. But it's good to have him back involved with the Scotland squad. Obviously Dale Assassin, he may well get game time which will be good for us as a club because then he's back up to speed going into that final block of temporary league fixes which will be left when we return after the international break. So I think Sean Dyche will be happy with this because it will give the player a chance to get more minutes under his belt. And it gives him more options. Obviously Seamus Coleman has been excellent of late but he does need a rest as well. And we almost have to have that option off the bench as well which we are very limited. You've seen it with Dyche's substitutions so far. He's not used many or he's only used them late in games and having Patterson back and available certainly strengthens the Everton squad. So go to see him back in the squad. Everton, Newcastle and Westam United are monitoring Sheffield United's Senegalese forward Illyman and Dye. The clubs watched them again over the weekend. He scored 12 goals and got 8 assists for Sheffield United so far this season. Everton have watched him on a few occasions this season and were obviously heavily linked with him in the January transfer window as well. I'm quite sure they're stretching their casting there nefar and wide. Hopefully they are on-forward players and players who score goals. It's been a huge issue for Everton all season and they'll be having the luck what's available in them lower leagues as well and Dye is certainly having a good season.  Miami based investment group 777 are interested in purchasing a stake in Everton. This comes after purchasing a 64% stake in Heath of Berlin in Germany. That is according to reports in the Washington Post today. 777 were linked with Everton a few weeks ago. The interest has not gone away. That has been reported lately that MSP investment group were very close to completing their stake in Everton. There was also a tenuous link to a Qatari investment group as well, but MSP looked the most likely to be paid just in 20-25% for 105 million of a far-abmishiri. But today there has been a little bit of doubt put on that by Paul Desk as one of them who's reported it. There's other people as well have mentioned it hasn't signed yet so therefore that's where the doubt creeps in. They are unconfirmed reports. People we've spoken to who have the story early seems to think there's nothing in it. It's still as it was. I don't know honestly haven't got a clue. The longer it goes on, obviously the concerns are there. What is clear is far-abmishiri is looking for investment. He's looking for someone to come in and take a percentage of the club to be able to ensure that the stadium can be finished without impacting the football club's day-to-day run. Hopefully not impacting the summer transfer budget as well, which Everton will need the quicker this is resolved the better for everyone concerned. So maybe 777 will make a late play for Everton as well as they try to spread their sport and portfolio as well. Finally, Everton is on the midfield at Delhi. It was left out again of the Besiktas squad this week and they won 2-0 but he wasn't even amongst the substitutes. It said last week there was rumours that Besiktas weren't going to consider him again this season. He's fell out with the head coach Senol Goumez and Senol Goumez. He hasn't been happy with the condition of Delhi. It's a disappointment on this because obviously he's got over a year left on his contract at Everton. It hasn't worked out for him with us. There was hope he'd go to Besiktas and do well and then they may take him and help him resurrect his career. But right now it looks like that's dead in the water and he will come back to Finch Farm in the summer. It doesn't strike you as a shawndite player exactly but we'll see what happens. Obviously again it'll be dictated by what league Everton is in as well next season but there you go. It looks like he's fallen totally out of favour at Besiktas and his takers loan. Adventure may be coming to a premature end after waiting to see.


Everybody forced here ripping 2023 tops inception and chrome black baseball eight box makes your number five random teams Let's go ahead and run our random and then we'll rip. Good luck. Everybody. Thank you for filling this up. We'll run it 11 times All right 11 times on the names one two three four five six seven eight nine ten and eleven Jeff s down to Masatomo K And the team is now one two three four five six seven eight nine ten and eleven Jays down to Orioles All right, Jeff s with the blue Jays Frank M Astros Maxime with the Cardinals Tony J Reds Dan Mariners Kai Cubs Larry P Giants Richard H Rays Travis B Yankees Masaki with the Brewers Michael K Dodgers Larry P A's Glen C Phillies Jeremy S Angels Kale F Royals Sander K Red Sox Dan M Padres Nathan R Marlins Jeffrey H twins Mark G Pirates Matthew H Rangers David W Braves Archie Guardians George and Mets Cameron T Rockies Archie with the Tigers Howie with the White Sox Adam H Nationals Roland R D-backs and Masatoma Orioles Results link is posted in chat. Let's rip. Get that NT mixture filling up to Blackface Four and four. How much are the heat favorite tonight against the magic? All right, morale rookie for the Cubs Heck yeah, Jeremy. Good luck, dude. I wish I'd get you hit with them Did you get angels? Oh, that's blue to 75 the grom for Texas straight Turner First autographs gonna be Xavier Edwards, Ricky Otto Marlins Hunter Brown rookie for the the Astros We wave to 75 Jose Altuve Astros. That's right Vaughn. Watch with us. Watch the magic game with us And Yuri Perez Ricky Yeah, Paul. Yeah, Paul and then an orange auto is gonna be will Brennan Guardians Ricky to 25 The likes going to get the likes going Michael Harris Ricky for the Braves Fracture to 199 rookie Astros Hunter Brown and CJ Abrams Green auto here is for the Yankees Anthony Volpe 39 of 99 Travis with the Yankees. That's an awesome hit Go glove is Ricky here. There's only what 22 or something? Young 23. All right. There's a judge followed by a gold mini diamonds Rookie for the Guardians Brian Rockio to 50 And Raphael Devers Next is an auto of Yankees Paul O'Neill Back-to-back Yanks encased autos I'll do for you Yanks for Inceptions now He's from the Sapphire. We should get the most expensive chairs in here. Do you need something? Maybe a new breaking chair too.   Yeah, and then a green rookie drew waters for the Royals Come on inception Tony You have a merino green Blede rookie The Marlins out of 150 Abrams for the Nationals Mr. Ruiz and a Cardinals rookie auto out of 99 Zach Thompson. They're like a brand's rookie green Edward Julian twins nailer Weimer We have a secret lab here get different chairs and then a Cardinals Dylan Gorman rookie auto patch to 149 nice break for the Cardinals Gorman there probably are due for new breaking chair to be to be real probably or do Green rookie Corbin Carroll a Rosa ran it to 99 rays Hunter Brown and On the back as a rookie auto of your R. N. Carnassio in a 75 for the Marlins the rookie All right y'all that'll do it not gonna recap this one. That was a really quick break. Oh Appreciate it moving on now to the next mixer


Hey, what's up everybody? RootedLinol here coming back at you with some more Python programming tutorials still looking at Senpai and now we're moving on to a new topic the carrot symbol to take something to the power and Division now these are weird things right these are this is another Another kind of segment of the online tutorial and documentation that you should totally be checking out rather than looking at my videos But again these videos are kind of a walkthrough and a guide through that So if you want a video presentation here, I am for you. Here we go Let's jump into Senpai from Senpai import all and that works fine for us now notice at least in the last tutorial What we're doing is we were using a X plus one Times times two now I'm using the asterisk twice and it looks like times times to represent Something to the power of two something squared now. I know maybe most people think oh you can just use the carrot sign, right? That kind of represents bringing something up like to the power or something, but that doesn't work in Python in Python this carrot symbol represents, you know Logical exclusive or and if you knew stuff about Boolean variables and logical operands that means like true Carrot false is gonna return true because if you have any true statement in a logical exclusive or it's always gonna return true true Carrot true is equal false. Okay, I guess only if only one thing is equal to true I don't I don't I don't forget no man X X carrot Y Those aren't defined, but if those were symbols X and Y X and Y Now I use X Carrot Y. It's X or X Y and this that's just a Python object to represent this logical exclusive or so here We come into a small tidbit and tangent on how SimPy works When you type something like X plus one when you get your symbol and your integer put together Notice that the SimPy symbol X is Added to the Python integer one. This is still a Python integer type now Python's operator rules tell SimPy that to tell Python anyway SimPy objects know how to be added to Python integers So that means that this one one right here is automatically converted to the symbol Python or SimPy integer object like integer one This this integer function that I just kind of wrote out for you is within SimPy It just means that it's gonna convert what it can to a SimPy object of an integer SimPy dot integer So that's how it kind of works behind the scenes, but this this operator magic Isn't typically visible to you when you really don't even know that it's need to know that it's happening, right? But there is one exception when you combine a SimPy object and another SimPy object like X plus integer one or a SimPy object and a Python object like X plus one You get a SimPy object. It's gonna return either a symbolic object or That's just it.  You're gonna get a simple Python object Here we go. Let's take a look at it with the with the type Function in Python. It's gonna return a type right one is a type of an integer If I use SimPy's integer function and know that this is one it's gonna tell me oh, this is a SimPy object Numbers one whatever. Okay, that works just fine for us. Now if I did type Integer a SimPy object plus a Python object a Python integer.  This normally doesn't matter Python integers work pretty much the same way as SimPy integers, but there's one important exception Division now in SimPy the division of two integers typically gives a rational here. I'll show this out here If we had integer within SimPy one divided by integer SimPy three We get one over three and if I throw this into our type function within Python we know Hey, it's a SimPy object and it's rational. That's another it's another object class here rational And we can actually create this represents integers and rational numbers pq of any size We can say like oh one Being the numerator and a comma to represent something else and three representing the denominator One third the same output in the same kind of answer and symbolic expression up top integer one over integer three Now in Python this division symbol can represent either Integer division or floating point division now if I did nine divided by three with Python integers I get three now if I did 9.0 divided by three all of a sudden it's float division. I get a float return rather than an integer Now let's see this way. This is important if I did eight divided by three integers I'd get two and it doesn't make any sense. No Eight divided by three does not equal to we can get three in there three times We can get three and then we can get six and we can get really really close to eight But we end up going to nine so we can only fit these two inside eight three and six This is why we use our float division eight point zero divided by three is going to get me two points You know all this jazz because that's trying to get us the approximate answer Now this is where we separate the line between integer division float point division in Python You can kind of change this if you're working in Python two or Python three Or if you've even imported from the future You know you can run it from the future These are two underscores. I can import division Now I can use simply integer eight divided by integer three and I'll get a float value That's I mean hey whatever But we can of course completely avoid this if we use our senpai objects rational Let's say eight over three. Oh, sorry.  Sorry guys And that's really kind of what I wanted to show you for one thing We've got this rational object And I wanted to show you the difference in the way that Python and Senpai handles integers divided by integers or integers in Senpai over integers in Python or Integers in Senpai over integers in Senpai I think you there is a lot of variation and you've got a whole nother mental abstraction When you step away from Python and you look at Senpai and then when you put those two together And you look at both Senpai and Python. So that's the point of these videos Kind of overcoming these strange pitfalls that you see when you're working with both Senpai and Python And I know it's weird to show you these off the bat like before we actually even do anything with the module But it's good to have them in your back pocket. So, uh, that's that's really it That's kind of what I wanted to show you guys Thanks for watching this tutorial. Hope you liked it if you did like the video Hey, drop a like if you have any comments constructed for this isn't please let me know Maybe write a comment or send me a personal message and if you're willing. Hey subscribe. I would appreciate that Hope to see you guys in the next tutorial


So today we have Slava Makheev talking to us about digging into Xiaomi's tea to get to Chinese money. It's Slava's fifth time speaking at DEF CON, so please welcome him back. Hello, everyone. Thank you for taking the talk. I'm Slava. I have been doing mobile security research at Checkpoint for many years. Reverse engineering and vulnerability research is my daily work. When I hear the praise, trust zone or trusted environment, I imagine some secure place on a device where cryptography, keys, passwords, and other security sensitive information are stored. I imagine that protection is implemented with hardware systems and major mobile chip manufacturers, such as MediaTek and Qualcomm, are responsible for the business logic. In general, all my assumptions are correct, but in fact, and this surprises me a little, not only chip manufacturers can change the logic of the trusted code running on a smartphone. Device manufacturers, such as Xiaomi, also have the ability to page the trusted code and add new items. In my research, I consider the trusted code provided by Xiaomi as a target for techs, and I will show you several vulnerabilities in the Xiaomi's trusted environment, which align with an average Android application to steal money from ordinary people. Well, according to the latest statistics, the Far East in China account for two thirds of the world's mobile payments. And this is about four billion dollars in mobile wallet transactions. Let's zoom in, WeChat Pay and Alipay are the largest players in the Chinese mobile payment industry, together they account for about 95% of the old Chinese payment market. Each of these platforms have over one billion users, so actually it's enough to hug only one of them to get rich. Today I focus on WeChat Pay built in Xiaomi devices powered by MediaTek chip. Why is this particular combo? Because Xiaomi is the most popular Chinese smartphone manufacturer, MediaTek is the most popular mobile chip manufacturer in the world, and WeChat Pay is the most popular payment platform in China. Okay, now let's talk about the trusted environment, aka TE. As I mentioned, mobile payment signatures are carried out in the TE, so as long as TE is safe, so are your payments. On the internet, you can easily find many articles about the TE architecture, so I note only the key points. TE creates a virtual security world managed by a trusted operating system, which runs the trusted applications. Each trusted application implements a specific security feature, and the normal world OS, in our case, uses Android, can send a command to a trusted app and receive a response. Xiaomi devices powered by Qualcomm chipsets use QC, trusted OS, and MediaTek-based devices uses KINIBI. In both cases, Xiaomi can embed and sign the open trusted applications. On Xiaomi devices, you can easily find trusted apps in the directory Vendor Theta. Each app is represented by an unencrypted binary file, and usually trusted applications of the KINIBI OS have the MCLF file format, but Xiaomi decided to come up with one of the oven. Actually, we don't need even to understand all the format fields, because the initial part of the Xiaomi's trusted app is the ELF file. Trusted applications can have multiple signatures following the magic fields, and the magic fields are the same across all trusted apps on the device. Moreover, the same with the app's fields of all other devices. As you see, the version control field is omitted in the trusted apps file format. It means that in attacker can transfer an old versions of the trusted application to a device and use it to overwrite the new app file. As the signature of the old trusted app is correct, this app will be successfully loaded by the TE. None of these and the attacker can bypass security features and patches of Xiaomi and MediaTek in the trusted applications by downgrading them to an unpatched version. I will use this vulnerability in my PC. Okay, Xiaomi fools the global platform to client API specification, which define the interface between the client application and the trusted environment. This API is implemented in the LibTE common SO library, and we can use it, this library, to access the trusted applications from an Android. But unfortunately, an unprivileged Android application has no permission to communicate with the TE. SLE Nooks prevents access to the corresponding driver, and it's possible to work only from a limited number of privileged users, such as DRM and MediaCodec. To bypass, we need to use the vulnerability, and I will show you one a bit later. On this slide, you can see an example of how to call a trusted application from Android. In this case, I sent a comment to the THH admin trusted app. This app expects to receive one input buffer and one output buffer as arguments, and the comment ID will be ignored. Okay, trusted apps implement TA, invoke comment entry point function. It handles the comment ID, and buffers sent from the Android side. This function is a perfect target for fuzzing-based vulnerability research, and I use a classic combination of FAIL and QMU emulator to fuzz Shoyomist trusted applications on a Ubuntu machine. A bit later, I will show you vulnerability related to mobile payment. Okay, now we know what the Shoyomist trusted environment is. Let's talk about payment system. Okay, modern Shoyomist devices have an embedded mobile payment framework named Tencent Sotr. Tencent Sotr provides an API to create, sign, and verify payment packages, transfer it between a mobile application and a remote backend server, which it pay based on the Tencent Sotr. On this slide, you can see an architecture of the Sotr and this platform deals with three levels of keys. This is device key, ATTK, application key, ask, and business key, ALUS key. Okay, they are all asymmetric Earth Day keys, and the device key is generated in the trusted environment before the device leaves the factory, and the ATTK public key is safely transmitted by Shoyomi to the Tencent TAM server. Third-party Android application, such as VChat, can request to create an application key. In this case, the private ask key will be stored in the TE, and the public ask key and its device signature will be uploaded to the app's backend server, which forward them further to the TAM server for verification with the device public key. In case if the ask packet is legitimate, third-party store the application public key on its remote server for future use. Okay, for each business scenario, such as logging the business or payment business, app should create a business key. The generation process is the same with the application key generation. Okay, to make a payment transaction and application, ask a challenge factor from its remote server, usually it's random string as the object for signing, and after user fingerprint authorization, application sends this challenge factor, finger ID, device information, and payment data to the backend server. All this data is signed with the business key in the TE, and the public business key will be used to verify the transactions. Tense and Sorter does not provide TE-related code. Tense and leaves the implementation to the chip or device manufacturer, so Xiaomi implemented their own Sorter trusted application to store keys and manage key operations. On this slide, you can see a code snippet of the Sorter trusted application. I just listed a few supported comments. To start the sign session, Sorter trusted application exports a comment or function in its sign, which expects to receive business key alias and a challenge factor as arguments, and this function creates a session ID by concatenating both these strings to a heap-based buffer without checking for overflow, and an attacker can provide arguments of such length that they overflow the heap memory after the session buffer is controlled to alias. Xiaomi's trusted applications don't have SLR protection, so this vulnerability can be exploited. Okay, now let's get back to the Tense and Sorter itself. On this slide, you can see its implementation on the Xiaomi devices. Sorter server system application, Android application, exports, I mean share for public, Sorter service. This Sorter service binds vendor point, micro trust point, hardware point, Sorter system service to communicate with the trusted environment. As I mentioned, an unprovisioned Android application has no permission to communicate with the DE directly, but it can use the Sorter service as a proxy. This Java code binds the Sorter service and then calls the vulnerable in its sign function, okay. So, Xiaomi did not implement an Android permission to protect the Sorter API. Now I will show you a really simple demo when an unprovisioned Android application did disable an ability to pay in the VChat. Okay, so, on the right side, you see common line actually is just to show you what is going on and on the left side is the telephone. Okay, so I implemented a simple tool with name Sorter Polar. This tool, I used just to send a comment, specific comment to the Sorter trusted application and output will be stored in some files, provided in the common line. So, first of all, I just want to show you that Sorter, Tencent Sorter is okay. It works and returns some results. For example, using this comment, I asked to generate ask application comment and after that, and then sign it. So, we have two results. And also, in the Android kernel log, we see that everything is okay. So, Tencent Sorter responded to our request. Now, I just opened an unprivileged Android application. So, this is a malware. This application can be downloaded from Play Store. And moment of launching, or I implemented a button block payments. So, in this moment, when you press on a block payment, I just sent a used chain of vulnerabilities to break the Tencent Sorter. And it's mean, as you see on the right side, so I tried again to send a comment to the Sorter and we see that the target debt. And the same situation in the kernel log, so it means that nothing happened. So, we can't open a session with the Tencent Sorter. It means that in this moment, if we're trying to open VChat application, when we open it, we see that it tries to create a session, open a session with the Sorter twice, actually, but Sorter is dead. And it means that VChat application does not provide actually button to make a payment. That's all. So, it means that a malware application can close the ability to pay in the VChat, okay. But actually, we don't want to block payment. We want to extract a private key because key leak completely compromised the Sorter platform, allowing to unauthorized users to sign fake payment packages. Okay, to steal one of the private keys I use another vulnerability. This is arbitrary memory rate vulnerability in the old version of the Sorter trusted application. If you remember, we can downgrade trusted application on Xiaomi devices. Let's see in the TEC operation argument of the invoke command function, which we used to call Sorter trusted app from Android. The caller can provide up to four arguments, such as a number or a buffer to the trusted application for processing. And the common types are encoded in the param types field. Each trusted application must ensure that the data sent from the insecure side matches the expectation of this app. What happens if a trusted application expects to receive a pointer to buffer, but we provide a number. In this case, if this application does not check the type of incoming parameters, so our number will be recognized as a virtual address and Sorter application will read or write to the memory with its file. So I found that one of the old versions of the Sorter trusted application lacks checking of incoming parameters and we can use this to achieve arbitrary memory read. So if we hold the target device in our hand, we can send Heth Auski command and specify the address we're interested in as the second argument. And in this case, we will see a content of this address in the Android kernel log as shown on the slide. If we don't want to deal with kernel log and just want to get information from our code, we need to send Heth generate Auski command and specify the target address again as the second argument. And Sorter trusted application will generate the business key based on the content of the address that we specified. And after that, we can use Heth Auski command many times to find the value which matches the generated key. Okay, so we have read vulnerability. In the digital, there is no ACLR, so all we need to steal the data is just to shape the heap. Okay, I just want to note here to force load, for example, a private device key, we need to send export Auski command to the trusted applications. And in this case, this public key will be loaded from the security storage to the heap of the Sorter trusted app. Okay, now I'll show you, you see how to extract device private key. Okay, just a second. So it's already technical, sorry for this. So I will use the same tools that I implemented. It's really simple tool just to send some information. First of all, we're doing downgrade attack. So we overwrite the new version of the Sorter trusted application with the old one. This is the first step. After that, we send command to export ATK key. This command to ask official public device key. This is a public key. Just, I want to save it in the sound file to validate the transactions. After that, I ask, using the export Auski command, give me please authentication application key and signature application key. And again, we store it in specific files. Next step, we use arbitrary read vulnerability to extract private key. Actually this key is represented by RSA private exponent and RSA modules. And so now we have all the information we need. We extracted private key, public key, packet and we just need to validate that our signature is correct. How we can do it? We can use open SSL. So using this command, I just validate that the public key and signature of the original packet is correct. It should be correct because we didn't fix any data. Verify it okay. Next, we're going to patch packet. This is ask packet. Okay, we're going to patch some key, some packet with any data. And after that, we're going to sign this packet with the extracted private key. We can use open SSL here because open SSL doesn't know how to proceed with private exponent and modules, but matrix SSL no. This is open source to matrix SSL. So we sign packet and the last one, again, we use an open SSL to validate that the new packet which we fixed is correct and signature is correct. So verify it. It means that we extracted private key. We use it to sign and actually it means that we can sign any packet we want. Okay, thank you. To summarize, okay, OEM provided TEs are very promising area for security research because many security critical features are implemented by OEMs and not by cheap manufacturers. To prove this, we analyze the Tencent's total platform built in the Xiaomi devices and found two ways to attack Vichitec. One is from an unprivileged Android application by exploiting the overflow vulnerability. And the second one by downgrading the SOTR trust that have, okay. Xiaomi has fixed most of the vulnerabilities we reported two months ago. So thank you for your attention. You can find a lot of good security research on our point research board. Thank you.


As a university-based research center, the Mercatus Center's mission is to bridge the gap between academia and public policy by advancing knowledge about how markets work to improve people's lives. We look to achieve this by conducting research and applying economics to offer solutions to society's important problems that we face both at the federal and the state level, like we're going to be doing here today. It's in the spirit of this that we're hosting the event today to provide you with a robust and diverse dialogue about the issues of certificate of public need reform. We hope to give you a wide-ranging picture of the trade-offs that different stakeholders face and an overview of the research that we've done on this important issue. I'm sure there are panelists that they might not have all the same perspectives on everything that we'll be discussing, but we'll believe that engaging in an honest and open dialogue will better help you consider the available alternatives that you guys face. I hope that whatever your organization's affiliations are that you consider us a valuable resource when evaluating this or any number of other issues that our researchers are working on, and on your way out, if you haven't already, there's literature available to you that discusses some of the work that we've done on this specific issue. It's my job today, and I'm pleased to introduce the moderator for today's event, Mr. Chris Saxman, as a retired member of the Virginia House of Delegates representing the 20th District from 2002 to 2010. Delegate Saxman served on a number of committees, including agricultural and natural resources, transportation, and the House Cost-Cutting Caucus, a bipartisan group that works to fund cost savings in government. He's very familiar with the process policymakers have to go through when evaluating various tradeoffs, which is what we hope to help you do here today. In addition to his work in the General Assembly, Mr. Saxman is an active member of the community and serves on the State Water Commission, the Virginia Schools for the Death and Blind Advisory Commission, and the Board of Trustees for the Frontier Cultural Museum, and Blue Ridge Area Food Bank. Not only is he familiar with the process that policymakers have to go through, he's also a really good person, so we're glad to have him here with us today. At least that's what the Internet tells me. But I've met him so far, and it looks like that's true. So without further ado, please take it away, Mr. Saxman. No, I'm going to leave on being called a nice person. Kids at home might disagree with that construct. But it's nice to be with you all, having served in the General Assembly for eight years and really enjoyed the policy work. I can tell you that sometimes the easy work is trying to figure out where we're going to find the best foot forward in changing some of the laws that go in our lives. And I'm going to tell you, I'm going to take a little bit of license here, if I may, and how this one in particular, this particular issue, COPN certificate, need impacts families and individuals. Because while we can talk about policy all we want to, it's really about people. And health care policy in particular has dominated our domestic politics for quite some time, usually since 2008. But why this one matters to me personally, and I think it's important to keep in mind that whatever you come up with at the end of the day, whatever policy changes come at the end of the day in April with the governor's veto, amendment, signature, whatever. Translating it back home for the legislators is the critical part. Because if they can't go back home and say, I made your health care better, or I made your health care less expensive, or I made it better and less expensive, it's not going to happen. There's just going to be a roadblock because they have to go back home and sell it. By definition, and there's no disrespect to my former colleagues in the room, by definition, most legislators are not leaders, they're representatives. They represent the collective thought of their districts, first and foremost, that's why they're there. So this little anecdote, I know it's an anecdote, not data, I think is instructive at least for me because I come from part of the state that would probably be more adversely impacted from the changes in COPN from rural Virginia to Shenandoah Valley. My mother on December 1, 2013 had a stroke, bad, which she ended up passing away six weeks later. She was in Highland County entertaining friends at lunch, I already noted, and they called the rescue squad, which in Highland County doesn't arrive in five minutes. They get the call out in five minutes, then they go to the rescue squad, and then they come out to your phone. And they realized she was in pretty bad shape. And they called for a helicopter ride, which in the Shenandoah Valley, we all love Pegasus. Unfortunately, when you see it flying in to pick up your mom, it's hard. So thankfully, I didn't have to experience that my father did. So we're talking about real stuff. And she was airlifted to the University of Virginia Hospital. She wasn't going to operate on Highland County. She was operated on at the University of Virginia and received outstanding medical care, outstanding medical care. And she improved greatly, so much so that discharged her to a step-down unit at Augusta Hospital, where she did not receive the quality of care you would want for your mother. This is real stuff. This is real people being impacted by the decisions that we are making here in the stratosphere of policy. At the end of the day, it's going to be brought down to people levels. And when you're talking about my mother's health care and my father's health care and my daughters and our sons, it's impactful. So these are really important issues to not only discuss in policy but also in politics because it has to be translated down to that granular level so that the politicians you're asking to change the law can feel comfortable enough to explain it back home in the flow of everything else that impacts everyone else's daily lives. And it's not easy. It's not easy. Yeah, you've got to fit it on a bumper sticker. At the end of the day, it has to be five words or less. Because no one trusts government to make a decision on health care right now. I'm going to lay that as a construct, okay? The U.S. health care system is as complex as it is crucial. So some of that complexity known as certificate of need or as Virginia refers to it's certificate of public need, this law requires providers to obtain approval from a state board before expanding their operation, opening a facility, offering a new service and sometimes just purchasing new equipment. In 2015, the General Assembly's Appropriation Act called for the formation of a work group to review the state certificate of public need program and its impact on access to health care. The group was also tasked with exploring the need for changes to the current COPN process. Today's discussion will cover these issues that the COPN work group has been dealing with and offer various perspectives on these issues by our guests. Today, we are joined by Jamie Baskerville-Martin, I'm far left, non-voting advisor with the Virginia COPN work group and attorney at McCandlis-Hulton. Welcome, Jamie. Brent Rawlings, Vice President and General Counsel of the Virginia Hospital and Health Care Association. To his right, Thomas Stratman, a scholar at the Mercatus Center and university professor of economics at George Mason University. And finally, to my immediate left, Christopher Cootman, a research fellow with the Project for the Study of American Capitalism at the Mercatus Center who, along with Dr. Stratman, has produced some research on this important issue. First question will go to Ms. Martin. Can you describe for us the task of the COPN work group, what motivated its creation and what issues have you been considered? Absolutely. Thank you for the question and thanks to the Mercatus Group for sponsoring this very timely conversation. I will answer that in specifics, but I also really like your introduction because I think what it shows is that even though sometimes we have to talk in sound bites, I think many of us realize that health care really exists in a gray space, that health care exists, health care policy exists in a gray space and that there are not black, white, yes, no, right, wrong answers. So I think although we hear a lot about certificate of public need, is it a bar to competition? Does health care exist in the free market? I think what's been interesting about the work group, and I'll get into detail on that, is really how much the work group has grappled with data and with research and with discussion from the beginning, from our first meeting until I first, to currently, where really there has been a really engaged discussion about these complexities. And I think the fact that there are so many people here and that there is such an intense level of discussion really reflects that people recognize it's a very complex issue, both at the academic level and when it hits your mom or your grandma or your brother or your newborn baby. And I think that's why it's become such a hot topic and I'm very grateful for all of you for participating. Back to your actual question, my name is Jamie Martin. I'm an attorney with McAllish Health and I'm in private practice and I've been in private practice for almost 20 years, I'm exclusively representing, exclusively in the health care field. I represent hospital, physician groups and other health care providers in regulatory and transactional work. So there was an item in the 2015 Appropriations Act through which the General Assembly directed Secretary of Health and Human Resources, Bill Hazel, to establish a work group to study various issues regarding the Certificate of Public Need Law and to provide a recommendation to various House and Senate committees by December 1st of this year. That action, among other things, mandated the work group composition and stated that it should be composed of providers, consumers, representatives of business and industry, among others. And the result is that we have a work group of 16 members. The chair is Eva T. Hardy, who is a former Dominion Resources Vice President and also I think back in the 80s, early 90s, Secretary of Health and Human Resources. Secretary Hazel, who you probably know is also an orthopedic surgeon by training and practice, is an ex-officio member. I'm the non-voting advisor and then the rest are representatives of hospitals, long-term care providers including nursing homes, physicians, the payer community, free clinics and representatives of business and industry. The scope was set forth in the item in the Appropriations Act itself and you all can go online and read that and I won't bore you by reading it line by line. It's about this long. But in brief, there were enumerated items that asked for the process for the review and the criteria for review of Certificate of Public Need applications, the fees that are charged in that process, an assessment of the frequency of the approval and denial of Certificate of Need applications, the impact on the establishment of certain healthcare services, specifically noted were open heart surgery, neonatal intensive care and inpatient beds, the impact on charity care and how charity care is enforced, et cetera, impact on graduate medical education which as you probably know is a key issue for academic medical centers. The role of regional health planning agencies in the timing of the state medical facilities plan updates for those of you who are not in the weeds on Certificate of Public Need, the state medical facilities plan is a document in Virginia's administrative code that sets forth with more specificity than the code itself, various standards and thresholds for the review of those endeavors that are subject to Certificate of Public Need authorization. Okay, what are the takeaways so far from what you all have been able to accomplish or where are you now? It's been a really interesting evolution. We have had four meetings, one in July, August, September and then most recently last week at the end of October. And the secretary deserves great credit for really providing a lot of education on this topic. So when we first started out, I think many people had really been in the weeds on CON and had a lot of opinions, either pro or con. And then there was also a group who sort of, who had some familiarity with Certificate of Public Need but had never really been deep in the process. And so we have had a number of speakers that I think were intended to give a lot of education to the work group, the background of Certificate of Public Need, prior efforts successful or not at reforming or repealing the program. The impact of Certificate of Need, as it's called most age or Certificate of Public Need, as it's called in Virginia, on the delivery of healthcare services of various levels, information on charity care, a comparison of other states' COPN processes, how long they take, what is reviewed, what are the components of that review, and also some good education on the state medical facilities plan and the process for updating. As this has evolved, I think we have really seen the group be very interested in some of the research and in some of the options for reforming the process. And that discussion has continued throughout. There are some folks who still are very concerned that Certificate of Public Need is an inappropriate barrier to full free market activity in healthcare space. There are some folks who fear that repeal or a significant curtailment of the scope of what's subject to the Certificate of Public Need law could impact safety net hospitals or could really restrict or impair access to certain needed services, as well as folks who think that a proliferation of certain particularly complex services would adversely impact the quality of care. So we've had a lot of discussion about that as a policy matter. We've also had a lot of discussion about the process. And here I bring you back to the charge of the General Assembly, where we really are tasked with looking at different processes. And a lot of the concerns that we heard were this process takes too long. It's allegedly longer than other state's processes. It's too expensive. It's too imprecise in its outcome. Information is hard to come by and charity care enforcement is either opaque or nonexistent. So that discussion has evolved to various levels of information, questions and enthusiasm over the first three meetings. We really became much more focused in our last meeting, which is last week. Joe Hilbert with the Secretary had issued a documental draft recommendations. It was broken down into seven categories. The first six were, as a lawyer, I tend to divide things into substance and process. And the first six were clearly what I would say are very process oriented. How do we look at letters of intent? How do we make information more transparent and more available? What sort of certificate of public, what sort of information do we ask for in forms? How much do we ask for an application? And at this last work group meeting, we got through as a group, I think a very thorough and vigorous discussion on six of those topics. Again, all of them very process oriented. And I would say the group reached consensus on really some significant points to change the program. This is where you wanna take notes, Gilles. I'm almost done, so you can talk to me. No, no, no, I want them to take notes. This is an important part. They love consensus. Well, and I think that there was really a recognition that we could make the process more transparent, that we could really improve the regulatory structure to make it more responsive to what health planning is supposed to respond to, that we could make the process more transparent. The seventh topic was really what I'd call a blend of substance and process. And that seventh topic included some recommendations for the committee's consideration on potential either exemption or curtailment of the scope of what is currently subject to Certificate of Public Need Authorization. The meeting, just for some background, was scheduled from one to four. This topic, regrettably, we finally reached topic seven at about 350. And so with the scheduled adjournment and with some scheduled conflicts for some members of the work group who were very key to that discussion, we did have some discussion on those points, but in the end, we felt that the better due process would be achieved by moving that discussion to our next meeting. I should back up also and say that in addition to the substantive discussion on should we deregulate certain services within COPN, should we exempt certain services? There was also vigorous discussion about whether it was even within the scope of this work group's charge to recommend repeal of certain elements of the definition of project under Certificate of Public Need. So basically, was it within our scope to issue a recommendation on substantive deregulation? So those were sort of the two topics that we ended with. And because I think those are really key and people have very strongly held opinions, we did decide to move that discussion to our next work group meeting, which is November 16th from one to four. It's in House Room D. And like all of our meetings, it is open to the public and we welcome your attendance. Okay, thank you, appreciate that. Brent Rawlings, what are the top concerns for your industry? What questions were your members have from this group's review? Well, the first thing I'll start by saying thank you, the Mercatus, for inviting the hospital association to participate. At one point in time, I saw some of the work by Mercatus and reached out to Professor Stratman and expressed our interest in having a conversation about it. And so they're kind enough to invite us here and I really appreciate that. With respect to the issues that hospitals and health systems are most interested in, one thing I'll say as a starting point is that the hospital association advocated for this work group to be put into place last year coming out of session because there was not a lot of consensus around these issues. And so we're pleased to see the work group underway making good progress. And we really do hope that there will be meaningful reforms coming out of this, recognizing that it is a cumbersome process that has been in place for a long time. And when that happens, it's always difficult to unravel some of the challenges that you face with it. One of the things I wanted to talk about today though was to, in answer to your question, Chris, is to try to talk about some of the policy rationale behind Certificate of Public Need Law. And I think that is a way to start the dialogue and to think through some of the issues. And with Certificate of Public Need, at one point in time, the policy rationale behind Certificate of Public Need was cost containment. And this was at a time when hospitals were reimbursed based upon their costs. So if they put up a facility or add equipment, they would be reimbursed for their costs. And so there was a built-in incentive in our healthcare financing system to spend. And so back in the 70s or 80s, Certificate of Public Need laws were brought into play to help to restrict and confine some of that spending. Well, as we all know, cost-based reimbursement has gone away. So one of the primary policy rationale for Certificate of Public Need went away as well. But in addition to that, we also know that a majority of states retain Certificate of Public Need laws or Certificate of Need laws on their books. And so we have to ask ourselves, what is the policy rationale that those states, including Virginia, have? And I think in Virginia, the policy rationale is pretty simple. We want a sound healthcare delivery system in our state. That is the underlying policy rationale. And one of the things that we focus on is access to essential healthcare services. And this includes access to care for the indigent, access to care for Medicaid recipients. We look at things like teaching hospitals and medical education and making sure that we have adequate supply in our healthcare workforce. And we also delve into, some of the law delves into maintaining competency and quality levels at our healthcare facilities. So this policy rationale is the underlying policy rationale. And you can see that if you actually look at the statute, you can see that policy rationale spelled out and I'll quote some provisions from the statute. The extent to which the proposed service or facility will provide or increase access to needed services for residents of the area to be served. Quote, the financial accessibility of the project to the residents of the area to be served, including indigent residents. The extent to which the proposed service or facility fosters institutional competition that benefits the area to be served while improving access to essential healthcare services for all persons in the area to be served. There's also language that delves into looking at whether or not the project provides improvements or innovations in financing and delivery of health services as demonstrated by introduction of new technology, promoting quality and cost effectiveness. And there's also a consideration around the unique research training and clinical mission of the teaching hospital or medical school and contributions the teaching hospital or medical school may provide in the delivery of innovation and improvement in healthcare for citizens of the Commonwealth. So those policy rationale that I described are actually baked into our statute and it's part of the review process. One question might be whether or not these policy goals are being achieved by the way that the law actually functions and I think that's a lot of what the COPN process group is about is to see are we really achieving those policy goals and the secretary when he started the group set sort of set out as part of the charge evaluating whether or not what are the policy goals we have and are we meeting them with that law, with this law and I think that's an important consideration. So you can see those policy goals built in there. Certificate of public need does not grant a monopoly to any particular provider. What it does is it favors those that are best situated to help the state meet its policy goals. This is the policy tool we have in place for these things. One thing I also just want to mention the work by Mercatus that Dr. Stratman will talk about here in a minute, I commend them for doing that because I think it's very important that we try to bring in as much data and analysis into the evaluation of policy as possible and I think this is a great start. In response to some of the findings in that study I just wanted to touch on them because I do think that they relate back to some of the policy points. One of the things that the Mercatus Institute looked at is this issue of cross subsidization which is a policy rationale. It doesn't fit on a bumper sticker like free market. It's less than seven words but cross subsidization is kind of a confusing concept. The concept that is discussed in the Mercatus work is the idea that these laws create a monopoly that then allows hospitals to fix prices and raise up those prices so they can pay for the indigent care but there is not an ability to fix prices in this market. We do not have price control. The majority of our prices are set by government payers including Medicaid and Medicare that pay well below costs so that concept I don't think applies in the way that hospital financing works today but I do believe the cross subsidization does play a role and we just treated it a little differently. We look at cross subsidization in terms of how it works at a systems level and we look at that idea of basically you know that within a system you will have profitable services and you will have unprofitable services and those profitable services help to subsidize within the system whether it's a hospital or a health system help to subsidize those unprofitable services and there is some evidence of that in the peer reviewed literature around that cross subsidization occurring and that you know that demonstrates when you have specialty providers coming in that focus on profitable services that does result in a curtailment of the unprofitable services at the existing providers and so that we do believe that cross subsidization exists that's a big rationale as to behind why hospitals and health systems are so concerned with that issue because it does affect our ability to make sure that we have these essential health services in our communities. Another issue that the Mercatus work touches upon that I also wanted to address is indigent care. With respect to indigent care in Virginia you don't have to go very far to find evidence of whether or not the COPN law induces indigent care. We have part of our law is that the state can impose a condition upon hospitals upon physicians whoever it is that receives that certificate of public need and obligate them to provide a requisite amount of charity care and so for fiscal year 2013 according to the Department of Health statistics 1.34 billion was provided in meeting charity care conditions, 34.8 million of in kind donations to safety net clinics. So all told about a billion and a half dollars in 2013 accounted for charity care conditions that is going to provide indigent in the state. And then just the last thing I'll mention is about access to care. And a lot of the work that Mercatus did looked at national data around the impact of these laws on hospital capacity in MR and CT and Dr. Straven and I have communicated about this and we basically, we don't see a capacity shortage in Virginia, we've got an average capacity in Virginia for hospital beds about 56%. There are a couple of hospitals that have access over 80% but each of those hospitals has another hospital with open capacity within a 15 mile drive. And so we don't see the capacity issues and the same thing with MRI and CT, hospital MRI and CT, every hospital in Virginia with the exception of a couple of critical access hospitals have MRI and same thing with CT. We're not at the same, we're not at the national levels for the capacity that we have but our capacity is different and maybe that suggests that some aspects of our COPMR are working pretty well making sure that we don't have excess capacity. Real quickly, what's the breakdown though between your members? How are you, what are your members telling? What are our members telling us? Well, there's a lot of variation in sort of how our members approach these issues because they're all impacted differently. You have some members that are in urban areas, you have some that are in rural areas, you have some that are part of large systems, you have others that are independent hospitals and they're all affected differently and they all have different access to resources and how these laws affect them just differs based upon their operations. And so by and large, I think there's great consensus that we need to take a close look at this law and try to reform it and improve it. Okay. Dr. Stratman, can you describe your research and how it informs the debate on COPN laws in the Commonwealth? Thank you, I'm glad to. First of all, thank you very much for the caters to inviting me to share our research results and findings. And we started out working on this issue about one and a half to two years ago and looked at the academic literature that was out there and we found that the literature has some very mixed findings with respect to the benefits of CON laws and also most of these studies are fairly old. So we decided to take a fresh look and so for that purpose, we have compiled several data sets on CON laws nationwide, including Virginia and developed a research agenda looking at these type of issues. So we have a total of three papers eventually. Now let me talk first of all about the first paper relatively briefly that was just mentioned in the previous comments and there we're looking at whether CON laws limit the provision of medical equipment and specifically we're looking at MRI machines, we're looking at CT scanners and we're looking at hospital beds. So what we, for each of those different laws, for each of these laws specifying whether MRIs are regulated or not, whether hospital beds are regulated or not, we compared the number of hospital beds in states that regulate them, BSCON and that do not. And we adjusted of course for state population, the health of the state population income and some other socioeconomic characteristics. And when we did so and compared these differences we found that as was mentioned before, we found that specifically there are about 21% fewer hospital beds in states with CON laws. So that means for a population of about 100,000 there are about 99 fewer hospital beds or for a town with 100,000 people, that many fewer hospital beds. Now it's important to understand that just came up that this number does not necessarily mean that we have a shortage, the way maybe economists define it in that they say there is more supply than demand or more demand than supply. What our numbers mean is that without CON laws, most likely we would have more hospital beds, more hospital beds, even in a regulated market like healthcare we would get more competition and ECON 101 tells us that competition leads to lower prices, more competition leads to lower prices, higher quality and by lower prices and higher quality it's likely that the additional hospital beds would get filled. We also, as was mentioned, we're looking at MRI machines, the provision of MRI machines and again, we're finding that there are about 35% fewer hospitals with MRI machines in states with laws where you have to get permission as a medical provider to purchase that equipment. Now the upshot of these findings is that CON laws have a bite and they limit the supply of medical equipment and therefore, the availability of these services and that's something I'll get to in one second. And let me just say one more thing with respect to this first paper, we also looked at CT scanners and again, we found that there are significantly fewer CT scanners, hospitals with CT scanners in states with CON laws. Now one of the justifications of CON laws is that they are supposed to provide integer care or charity care. The idea is with CON laws, we're going to restrict competition, we're preventing entry into the market. With less competition in generally, we're going to expect higher prices, excess profits of those firms insulated basically from competition and the legislatures expected the hospitals and medical providers to provide charity care in exchange for these extra profits. So we said, well, let's see if this is in the data. So we compared states with CON laws versus non-CON laws, compared their charitable giving and we found no difference. It does not appear that there's more charity care in states with CON laws. Of course, Virginia may, it's definitely going to spend one billion, one billion, I forgot exactly what the number is, but again comparing Virginia or other states with CON laws to states without, there's no difference in between. And that was one of the expectations that there would be a higher medical, more services for needy people. Now the, so that was our first step and then when we talked about to people in the field, they mentioned to us well, CON laws are very important for the provision of rural care. Rural hospitals are in dire states in many areas in the United States and CON laws can help hospitals, rural hospitals to be insulated from competition. In particular, often people have specialty providers in mind like ambulatory surgery centers. And there the argument is that these ambulatory surgery centers are what people call cream skinning, skinning, sorry. So basically they're going to take the profitable patients while the rural hospitals are going to be stuck with unprofitable emergency services and other procedures. So we decided to take a look at this. This is forthcoming in the second paper. It's coming out in a few months. So first of all we saw two states with CON laws have fewer or more rural hospitals. And what we found is there are fewer rural hospitals. So there doesn't seem to be much to the justification that CON laws increase the number of rural hospitals or keep them alive because actually CON states have fewer rural hospitals. Moreover, then we looked at ambulatory surgery centers. And there are many states that regulate the entry of ambulatory surgery centers via CON laws. Again, we found many more ambulatory surgery centers in states without CON laws. And in particular states that had CON laws had fewer ambulatory surgery centers in the rural areas. So the upshot is what we find is without CON laws, more rural care provision, one through more rural hospitals, and two through more ambulatory surgery centers. Now our third paper in this research agenda looks at utilization. Utilization is an important measure for access of care because clearly if you would have zero access to medical care, you would have zero utilization. So we're looking at Medicare data because that's where the data are available for the entire United States. And again we look at different states with CON laws and without CON laws. And we find significantly lower utilization of MRI machines, PT scanners, PET scanners, and CT scanners in states that regulate these type of services. So less utilization and that can be perhaps interpreted as being less access to care. Now what do people do when they have less access to care in CON laws, in states with CON laws? We find that people actually go out of state. People migrate from states that have CON laws, to states that do not, and get their imaging service over there. That shows up in the data, in the Medicare data from 2013. If we can, we'll come back, hopefully come back to this topic, but if you had one takeaway, I'm gonna ask every panelist here, you're gonna have to put this on a bumper sticker for everybody in your audience, okay?  Okay, I'm serious.  Cause this is five words, it's all you got. It's healthcare one. Virginia Healthcare Hospital Association, you're done. This is tough for a lawyer. Welcome to politics. So what's your one takeaway? CON does not promise what they, does not deliver what they promised. Doesn't deliver, doesn't deliver. Okay, okay. Moving along so we can get to the Q&A after this. Mr. Coopman, for those who are unfamiliar with the certificate of need programs, can you give us some background on them and some context for what is happening around the country on this issue? Sure. So I think it's important to understand the history of certificate of need to understand why these were put in place, I think Grant referenced this before, on why they continue to be implemented, but then also what's happening around the country right now. You know, this conversation isn't happening in a vacuum in Richmond, it's happening all across the country. To give you guys the historical context for all of this, certificate of need laws are an invention of the states, but their proliferation across the country is the result of federal policy. So the first certificate of need program was created in 1964 by New York State. The idea being it would help these regional or planning associations better plan the healthcare market in New York. Now again, there was a proliferation of capital investments as a result of the federal reimbursement procedures, and so the federal government in 1964 passed the National Health Planning and Resources Development Act, which essentially required states to implement a certificate of need program to get certain federal funding. So this essentially went from about 18 states in 1973 having a certificate of need program to every state in 1980 having one. So this is a product of the federal government trying to fix problems with policies and creating new problems at that. And so far as they thought it would control costs, all of the early studies in the late 70s, early 80s found it did not control costs, and by the mid 1980s the federal government repealed the requirement and said, essentially they had made a mistake and they were no longer requiring it. Now since then about 14 states in the mid 1980s have repealed their certificate of need program. Now leaving us with two thirds, 36 states approximately in the District of Columbia that continue to regulate healthcare in this way, essentially requiring facilities and practitioners to go get permission from a state regulator before they can enter a market, expand their practice or purchase certain devices or offer new services. Now over the past nine months, two thirds of the 36 states, so approximately 22 states have begun to wrestle with the idea of what does certificate of need or CON or COPN, what role does that play in the future of healthcare? In five states there are beginning to talk about the idea of repeal. And now this is, again it shows some consensus, but these are states as diverse as Michigan, Illinois, Mississippi, Florida and Maine have all taken up the idea, including the Obama administration is now even recently sending a letter, I believe to the work group saying that CON is not an efficient vehicle to achieve in cost control or the other goals that people have sort of attached to CON and that repeal may in fact be an adequate response to this. I think is what the DOJ, FTC joint saving set to the work group. So that's sort of where we find ourselves today. Now where does Virginia compare to the rest of the country? So there's 36 states that currently regulate healthcare services through CON. On average they regulate about 14 devices or services. Virginia regulates 18, so slightly behind the curve when it comes to the amount of healthcare being regulated with a certificate of need. And what does this mean for Virginia? I think, again these are national studies and we're using large national data sets to look at these issues. But as Thomas said, this means lower competition. This means lower rural care for example, our preliminary findings are telling us that in states that regulate healthcare with a certificate of need you find 36% fewer hospitals in rural communities. You find 15% fewer ambulatory surgery centers in rural communities. So this is really I think getting at the heart of how do we move into the future of healthcare in the United States. And I think a big reason why this has become an issue as of late and really a bipartisan issue is that for the past maybe 15 or 20 years people have relied on the federal government to sort of drive the conversation as to how healthcare policy will look in America. And as Washington has stagnated and I think all of us have witnessed that in some ways is that states are realizing and people in Richmond are realizing that it's high time that individuals in their state capitals can take their own destiny into their hands and decide for themselves what the future of healthcare ought to look like beyond let's say policies dating back to the early 1970s. It's not that long ago. I apologize. Oh, do you? No, before we get to the Q&A session I wanna go to your bumper stickers. And then what I want you to understand is that when you're in the legislature you're in the caucus meetings these bills come out of the HWI in the house Doc Bannon, great to have you with us. And in the Senate, Ed and Health no one else knows what's going on. They haven't been part of the conversations if they're not on Senate finance and house appropriations, subcommittee on healthcare they don't know. And they gotta ask, they ask a very simple question and they got 30 bills coming up that day and Chris and John and Kathy can understand this. They go, look does it help my constituents or hurt my constituents? Bottom line of form, right Doc? And we all go to Doc O'Bannon and say help me. I don't know, this is not what we do in county cities and towns, okay? So, what's your bumper sticker? There being one word here, so. So, that is healthcare colon is more always better, question mark. Colon? Well, healthcare colon. Thank you. Is more always better. But I'm fine, we got an healthcare. Very funny. You're welcome. Gonna keep it light, it's a light lunch. Healthcare. Is more always better, question mark. Is more always better. That's what you're grappling with, is more always better. Is more always better. I think that's the theme of what we hear here. But your work group, that's what you're dealing with. That's what you're, is more always better. You're questioning the whole system. Well, I can't say that that's the statement of the work group, but that is the statement that I do. Your view of the work group coming out, what's the bumper sticker? I think is more always better is actually a pretty decent one because I think we have been assessing whether there is an unjustifiable or unneeded bar to additional market entry. So I think healthcare is more always better, question mark is an appropriate summation of the work group's discussion. Okay. Next. She actually stole mine. So you're in cahoots, is that it? No, no. Well, the concepts are similar. I'm struggling a bit, but I think the, with all of the issues that we confront, hospitals and health systems, we're inclined to put patients first. And so it would be something along the lines of, No, no, no, not along the lines. I need a bumper sticker. It's got a slap on the back of a Toyota. COPN, it's about people. And we're talking about facilities. We're talking about businesses. We're talking about adding CTRs, MRIs and the real issues, some of the issues here are about access. What we're really talking about is about access and access is affected by economic. So your bumper stickers, it's about access. It is about access. I think it absolutely is. And it doesn't mean, and it doesn't mean building more hospitals. It doesn't mean building more beds. I mean, we're in the midst of transformation in healthcare delivery. It's about access. It's about access. Thank you. It's more better. It's about access. This is what we did. I'm trying to help me help you. It's about access. Okay. It's about access. I like that. Three words. Thank you. Just saying. You won. It's early. Trust me. Professor. CUN doesn't know deliver. Does not deliver. Sorry to the Stolly Dunham family. That was the opposite of her campaign slogan. The OBGYN, the one Walter Stosh's open seat. Dunham can deliver. So CUN doesn't deliver. Yes. Sick Dr. Dunham on you. So I think I would say something like, more healthcare, lower cost, year after year. You got it. You would fit on the back of your car. Maybe not on your Toyota. I'm trying to tell you that. Well, you said a Toyota before. That's what's driving around suburban America. It's a Camry. I mean, let's go with it. I think it's about more healthcare, more people, lower cost. That's what this all about. And it really is about people, right? And it's important to remember. Over across higher care, higher quality. More healthcare, lower cost. More healthcare? Yeah, to more people. Get healthcare. Oh, so not more utilization. I mean, if that's what people need, again, as our data points, people are leaving. So let me help you here. People are leaving some states. Better healthcare, lower cost. That's fine, yeah. That's pretty good. That's what I want to campaign on. I'm a researcher. I write in a story. Well, that's not gonna get you elected. I'm just saying. I'm called. That's not gonna get you elected. And when you go to the website of the guy running for office, they're not gonna say, your healthcare is not gonna get marginally better, but on average, we're gonna bring down the overall utilization rates in your general area. If you're in this zip code, click this zip code to get a coupon. Don't hire me to write your bumper stickers. I think you need to take away. No, no, no. This is the challenge. Look, policy is one thing. And this is about delivering healthcare for people, but in the beginning, as you came in late, I described the situation where my mother was airlifted from Highland County to the University of Virginia, which are two different worlds in the same state, and received world-class care. Step down unit in Augusta, World Community Hospital, her healthcare level, her health quality degraded to the point at which she ended up passing away. In my estimation. Okay, that's a son looking over a mother. Okay, this is where the rubber hits the road, guys. And this is what the challenge is before all of us, is because we all have our interests and our desires on this final product we're gonna try to come up with. But at the end of the day, everyone in Richmond who comes in here to the General Assembly, which we just had an election for, has to go back home and say, what did you do for me? And when they go to the Lions Club and the Kiwanis Club and the Chambers of Commerce, just knock on doors and they get stuck in the grocery store for two hours when you went to get one thing because someone's gonna talk to you about my healthcare or my hospital if you gotta answer. And you gotta get it down to a point at which that person can walk away and say they care. And they listen. That's what it's all about. So, I leave that as the beginning so that when you're all working together on this you have to understand that the bottom line is if you can't put it on the cover of a USA Today, it ain't selling. Okay, that's the bottom line here. And that's my view coming from the business world and the political world. Yeah, and I think just to build on that and then also something, when I said before, I do like your bumper sticker. I like it too. He stole mine and I tried to pivot miserably. That happens all the time. But it is about people, right? It is about people, but COPN, you go through the history and the policy rationales for certificate of need across the country. It is not about people. It is about the business side of healthcare. It's about the viability of critically important community, I think the financial viability, I think is in the guiding principles of the state medical facilities plan. It's about financial viability. It's about utilization. It's about what you're buying, what doctors are purchasing and what they're not purchasing. It's not about the services being provided. It's not about the access people get. It's not about can they get it more efficient and better for them. And that's sort of what, in many ways, that's what the data shows is that people have to leave certificate of need states to go find services elsewhere. Because certificate of need, again, is not allowed. Well, that's happening, I would imagine, Professor, we'll get to Q&A here within states. I think you're seeing a migration within states where people are moving towards better healthcare anyway, where they do have more of a free market orientation and better healthcare. I think you might find that as well, not just leaving states from one economic zone to another. I think people are leaving rural Virginia to go to suburban Virginia for healthcare, better education, better job prospects. I think it's all the same. So back it up. One more time through on your bumper sticker. Health care is more always better. There's more always better. Question mark. Question mark. You're still in the questioning phase. It's about people. No, it's about access, period. And there's one underneath it that says no margin, no mission. And...  You're on the phones. Answer the phones. You're in the campaign office, you're on the phones. Don't talk to the customers. Right? Professor? I'm gonna stick with the provocative, Colin doesn't deliver. Doesn't deliver. Better healthcare lower cost. There we go. All right, we're gonna open up for some Q and A. Microphone in the back there, Mike Thompson with the... With the Thomas Jefferson Institute. The Thomas Jefferson Institute. Super public policy. Think Tank for the Commonwealth. I'm interested in whether the commission that there are 14 states that don't have COPN laws and there are a number of states that have less things they regulate under their COPN laws. And the concerns expressed today about charity care and those things. Have you compared the non-COPN states to Virginia on whether there's that kind of impact? When Pennsylvania took away their COPN law in the early 90s and legislation was introduced this last year to bring it back, it was the hospital association and the Pennsylvania AMA that went and testified to keep the COPN laws out of their state. So I think that the commission really ought to take a look at the non-COPN states. And it would be interesting to find out with the legislators here whether the restrictions on the commission of not looking to do away with it was really a restriction of what they had in mind. I don't understand how you can look at this without having that as at least an option that you bounce things against. Get a response? I think that those are all topics that have been discussed. We have posted a lot of literature to the website. If you Google COPN work group Virginia, you will come up with the website that is devoted to this group and has countless articles, all of which have been made available to the work group. So we've not only read a lot of that literature, the Pennsylvania case in particular has come up. We have discussed it and we've had a number of presentations on the different levels of regulation or no regulation in different states and how that has impacted the number of features of the health care delivery system. If I can't, if I can work? Well, let me, Mike, let me ask, let me follow up on that one, Mike. If we can, since you were alluded to process earlier, what is the process?  So the statute under which we are acting directed that the report and recommendations be directed to various House and Senate committees. So that answers your question about to whom the report is addressed. Is there a deadline on that? That did say December 1st. I can only report on what was discussed in the meeting because that's the only discussion that I've had on this topic. But we do have our next meeting on November 16th. There is a concern that with the Thanksgiving holiday and the scope of what we still need to address that we may have to have yet another meeting and that the actual report may be a bit beyond December 1st. And in terms of your other question about the scope of the report, whether it is pure process, whether it crosses over into recommendations on changing scope of the specific public need law itself, I think that is still a very right topic for discussion as well. Not, I'm not aware of the process on this, but if they do return by December 1st, can you receive it in the legislature? So it's not a rec, it's just a recommendation. Okay, get on that. Doc O'Vannon. John O'Vannon. I think I just talked to the person that wrote the budget amendment, the budget language. It's actually not statute, I think it's in the budget. And I think it was pretty clear that our request to the commission was not just procedural. It was to look at the whole COPN plan and that would certainly include consideration of changes in what's regulated and all the other pieces of it. Okay, thank you, doc. Thank you, Susan. Claire, good to see you. All rise. Just kidding. That's funny for those of you who work in the General Assembly. Any other questions? Student hand up? Yes, yes sir. My name is Ken Law Nelson. I'm a retired urologist. I worked with Virginia Urology. Over the years, I personally put in three certificate of need applications here in the state and one in all for ambulatory surgery or facilities. And all were approved. Their grand total cost of those four applications to me at that time was two parking tickets. That I did it all personally. Businesses subsequently had a number of other CONs where our legal fees have been astronomical. Well, not astronomical, they've been appropriate but significant. That I went to look at the Martha Jefferson, not the Martha Jefferson, the HCA application for Fredericksburg, the amount of paper reached almost six feet in terms of the amount of paperwork required. That CON tends to prevent innovation. We had a CON application at one time for a mobile operating room, I'm a urologist. Our standard operating room cost a million dollars. Then we had an application in to provide a mobile operating room at Franklin, South Hill, Emporia so that those services could be provided at those hospitals. It's the same here in Richmond. There were eight sister, eight urologic rooms. We could reduce that to four. Here it gets turned down. I think the CON laws particularly take away the ability to innovate and make healthcare affordable and available to everybody. Thank you. Okay, did you have a question or do you want to express the concern of the permitting and application process to the commission, to the work group? Have you, are you all looking at that? Yes. Okay. Delegate Byron? Just one question in regards to the price controls that were mentioned. You were talking about price controls and how you, this doesn't affect, doesn't affect that. I forget exactly how you put it, but how would you explain then when a hospital picks up purchases another facility and then don't they also have the ability to charge a different rate as an outpatient facility than they would if that facility was independent and free standing? There are differences in payment mechanisms for example with Medicare. Medicare pays a outpatient facility differently than it pays a free standing ambulatory surgery center. So that is part of it. My comment was with respect to the fact that when you look at price control, the ability of a hospital to affect its prices, you look at average 40%, upwards of 70% of your payer mix being Medicare and Medicaid. We don't negotiate prices with Medicare and Medicaid. Medicaid pays about 66 cents on the dollar for hospital services, pays about 90% on the dollar under Medicare. So we don't affect those prices. That's the significant portion of our payer mix. And then beyond that, you've got commercial payers and we're seeing greater consolidation of commercial payers. So my point was that our ability to affect the actual dollars that we receive for the services and to cover our costs is limited by, is basically dictated by payers. But your point is correct that Medicare does recognize the difference in payment amounts between what would be a provider based facility versus one that is a free standing ambulatory surgery center. If I can, I think it might be a good time. If I can, call on Dr. Stowley and I need to put you on the spot. I carried two hats in this room as a doctor and a legislator. Congratulations. You care for patients? What kind of an impact would you see from these changes and what would be most concerning to them if there were any? You live in a relatively suburban, urban area relative to the most of the landmass of the Commonwealth. Well, I'm actually, I don't see patients anymore since I've been in the General Assembly. I am a hospital administrator though and I have to make our budget meet. I mean, we're going through the budget process right now. John, I think Kathy can both tell you I'm more than a little bit passionate about this topic. I was actually shocked a little bit when we compared healthcare financing to Econ 101. There is nothing Econ 101 about healthcare financing. When we talk about beds going up by 21% in other places, you have to staff those beds. You have to put doctors and nurses in those beds. I think for most businesses, healthcare included, your number one cost is your payroll. So I think it's just as likely that if we increase the number of beds out there and I have to staff those with doctors and nurses, we know we already have a shortage of doctors and nurses, limited workforce, salaries go up, costs go up associated with that. But not only do costs go up, we now have suburban, urban areas better able to take and buy those services from skilled employees that your rural hospitals do not have. So I think there are a lot of aspects to CON that have to be looked at. I think the impact of CON on hospitals, particularly on rural care and our ability to provide that rural care is really at risk. And so I guess what strikes me is the stuff that I hear about D&D regulated, surgery centers, diagnostic centers, cancer infusion centers. There's one thing in common with each of these services. They're profitable. You don't see anybody out there saying I really, really want to start a birthing center. Right, because birthing centers don't make any money. And so we, as you started out, you said, well, this is about the patient. But I really, really think that a lot of this push is really about the dollar. And when it comes down to it, what is the impact of taking and setting up a surgery center or a diagnostic center across the street from a hospital? How is that gonna impact if they can sit there and cherry pick patients that can afford to pay and just send the patients who can't afford to pay across the street to the hospital? That's something I think we need to address. Healthcare finance is not simple. Just because you build more does not mean prices go down or a fixed price market. So to sort of compare this to a lemonade stand just doesn't make a lot of sense to me. Again, I started out by saying I was passionate. And thank you for being someone who serves in those capacities and with passion. We need that in the world. I guess I threw that to Professor Strattman and that's one of the questions that I've been chewing over when we first got this assignment on this panel is is this a free market anymore and can it be governed with free market principles? I mean, there is definitely, it is not a free market in that it is very regulated in many aspects. But the solution to an unregulated market or a heavily regulated market is not necessary to regulate it more. It may be to loosen some things up. And even in a regulated market, you have competition. Just competition occurs around different dimensions. And so if you have more hospital beds and hospitals are trying to fulfill it, maybe, I mean, one way competition goes if the carol compete along prices, they may compete about care, quality care. So there are levels of dimensions competition can happen and I do not mean to be callous by comparing it to ECODE 101. The point was to say, ECODE 101 is about competition and competition goes in lots of various areas. Well, it's not to say also that there's no competitive market orientation, free enterprise pressures involved in this market whatsoever and obviously that's going on. Also, there are, and I've experienced that, having grown up in the bottled water industry up against global companies, companies try to gain the system and try to gain a competitive advantage through legislative policies. Isn't that correct? Exactly. Which subverts the whole free market enterprise. The can subvert the whole free enterprise. It can be a detriment concept, yeah. Do you wanna? I mean, the regulatory complexity is something that gives leverage to larger, more well-funded establishments regardless of the industry. So if you have a really complex, really difficult system to wade through, maybe some individual practitioners are savvy enough to wade their way through it, but it does give a competitive advantage. There's competition on that margin too. Gives a competitive advantage to the larger established. Because they went on scale. Just simply they're bigger, they have more resources to grow it at handling the system. So there are ways that regulation, I mean, this is sort of economists have been identifying this phenomenon for decades as regulatory captures that sometimes, even if a regulation was put in place with the best of intentions, right? Increasing access, lowering costs, increasing charity care, protecting rural hospitals. All of these are really laudable public policies. But the question really ought to be, A, are these policies achieving that end? And B, do we have unintended consequences? And so far as, I think you mentioned how big some of these applications are, we were talking to somebody at the Office of Licensure. I think they said the average application is 1,500 pages. By the end of the process, in some go, is as high as 6,000. That's a huge, and you think that's all time.  That's a lot of time spending. It's not like they get paid by the page. Yeah, that's a lot of time. Just kidding for all your lawyers out there. Filling out pages, and that's high, high cost to smother newer entrants in their market. So yes, there are ways that the system can't be gained. If I can jump in, that's a great thing. If I, if I just look at you. Yep, yep, go. The gentleman in the back of his hand up. My name's Eric Turner, I'm from Indiana. Chris, I'm part of the dead legislator club.  Just retired. Am I dead? Am I really dead? Just retired after 25 years in Indiana House and appreciate the discussion, serious discussion, as you know, many states are looking at CON. I wanna talk just about one specific service. My colleague and I represent the largest developer of nursing homes in the United States based in Indiana. And one of the things that was brought up here at this table is innovation that CON prohibits in some areas. And in the nursing home industry, it's certainly that case. And let me give you a couple of examples. There's 15,500 nursing homes in the United States. The average age of a nursing home is in excess of 40 years. That means they were built for people who were born in the 1800s, who were 70 and 80 in the early 70s. And in the 36 or 37 states where no new innovation in senior care can happen, the public, and this is one thing you have to remember in delivery of healthcare, the public rejects some healthcare services. And I would venture to say in this room, it would be very similar to National Polling that the company we represent, Main Street, has done 81% of seniors say they would never go to a traditional nursing home. They've had that experience. They've either gone with their parents or visited a loved one. They have no desire to go there. So there's need for innovation. What Main Street builds actually is transitional care, short-term care, rehab and back-to-work rehab, back-to-home, but in all these states they cannot build. And Virginia is one of them. And they build what the public wants. That includes private room, private bath, restaurant-style dining, amenities like a movie theater, a spa, a pub, things like that, that they wanna go to. But in many of these states you can't build because of COM. So I'll just throw that out to you. No, thank you. That's a great point you bring up in the representation of other states what you're doing. Any other questions from the teacher I'll call on you? All right. Summations, please. Can we start at the other end? Yeah. Go right ahead. Oh, okay. You know, I guess I started my summation just a minute ago, but all of these are laudable public policies, right? To try to say how do we get better healthcare to people, increased access, increased charity care. All of these things are really laudable public policies. And especially with older regulations it's incumbent on policy makers, on everyone to look and say are these policies being achieved by these public policy approaches? Are we achieving what we're set out to do? And it's not there, and I would say for people interested in increasing competition, increasing innovation, and the long-term growth and sustainability of the healthcare market, it's incumbent upon all of us to take a hard look at what's on the books and figure out what we can clear out, and I think COPN or COIN is a good place to start. Okay? Professor, and thank you for coming. Appreciate your time. Yeah, so we are not necessarily, or I'm not thinking about a regulation necessarily per se is good or per se is bad. Question is, what do the data tell us? Some regulations might be supported by the data, and others do not. So we looked at the regulations for COIN and COINP and looked at various outcome measures, and just comparing basic averages, it doesn't look that favorable for COPN. So that's basically where the numbers are, and so we have to just rethink whether COPN and COINP is exactly doing what we intended to do. Okay, all right. Again, thank you everybody for listening, and I appreciate all the questions and the thoughts on this issue, and I think it demonstrates one of the challenges, because there are a lot of different viewpoints, and everybody's right, and at the same time, we're all wrong, but I think that's helpful. The one thing I'd say, just to make sure that you all appreciate is that it's, we can talk about doing away with this regulation over here and that there's no reason to have more regulation. More regulation doesn't get us where we need to go, but when you peel away one regulation, there are all these other regulations over here that don't make it a free market, and we need to look at things comprehensively and really think about what the impact is, and when we talk about issues like access and how people get health care services, again, you can do away with significant public need, but then you need to think about the consequences, and I think the example of Pennsylvania was brought up earlier, and in the 10 years after they repealed their law, they saw hospitals closed, they saw ambulatory surgery centers through the roof, and 14% declines, eight closures, 21 mergers, four conversions in the hospital industry, and how does that impact your community? How does that impact how you receive services? So to expect that changing a law like this that has been in place for so long and not thinking through the consequences and thinking about how that plays out and how it affects individuals is a risky proposition. We just need to be really thoughtful about it. Okay, great comment. Jenny? I'm sure everyone here has heard the alleged Chinese curse of may you live in interesting times, and I like to think that is how lucky are we that we live in this absolutely fascinating, interesting time where we can help to affect great change in health care one way or the other, and so I think that the lesson from the work group is what a great time to be interested in health care. What great data we have now after years of not having great data. What a great opportunity, right in this very room, to talk to some physicians and some surgeons and some hospital administrators and some policy folks to learn. And so I would say make that time more interesting. Make that time, make this time a time where you can learn more about health care and understand that it is complex. So we might not be able to run to our corners of the purity of a particular economic policy or the purity of alleged protectionism or the purity of one particular theory or another. It is a complex area and regrettably and for the good, I think that that means it doesn't lend itself to easy issues. So I would encourage you to engage in the debate and come to our next meeting. Figure out when our next meeting after that is and we would love that participation, thanks. Thank you all and I guess I'm gonna ask and indulge if you could say one something to a legislator who are somewhere in the room, but if you had a legislator back home and you've been a part of this discussion and you've seen, I don't wanna say both sides, you've heard all angles from this conversation. You're very schooled in this topic. What would you tell them? And I'll start with Brent. What I tell a legislator about this topic today, here. Right now. Let's figure out a way to make this work. You listening, Dr. B? No. Let's figure, there is a path forward and as there are with all issues that are tough then Virginia's especially good at that. So we just need to keep talking. Okay, Professor. I would say look at the evidence. Okay, follow the data. Follow the evidence, yep, follow that. I would say yes, it's complex, yes it's hard. It won't be easy but it doesn't mean there's issues that aren't worth tackling and it doesn't mean that we should just throw our hands up. Okay. There are worth going after. Worth going after, that's a great way to conclude. Jamie. Let's say don't be afraid to ask the hard questions. Don't be afraid to be in that uncomfortable space where really if everybody's a little bit unhappy with you maybe you're in the right spot. That's easy for me to say, isn't it? That's a tough sell back there, I can't sell. Well, thank you all for coming out today. I want to thank the Mercatus Center for putting on this excellent discussion today and providing lunch, thumbs up. When you get people to an event, you have to feed them. And thank you all for coming out and participating. I'm sure the panelists will be open for questions after us. Thank you all for coming.