WEBVTT - GOP's Brooks Defends Proposed U.S. Budget as 'Responsible' 0:00:00.240 --> 0:00:04.040 Runt You by Bank of America Mary Lynch with virtual reality, 0:00:04.320 --> 0:00:09.719 virtually everything will change. Discover opportunities in a transforming world 0:00:10.160 --> 0:00:14.440 VI of a mL dot Com slash VR, Mary Lynch, 0:00:14.520 --> 0:00:28.120 Pierced Fenner and Smith Incorporated. Ye, Welcome to the Bloomberg 0:00:28.120 --> 0:00:32.360 Surveillance Podcast. I'm Tom Keene with David Gura. Daily we 0:00:32.440 --> 0:00:36.080 bring you insight from the best of economics, finance, investment, 0:00:36.120 --> 0:00:42.160 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:42.280 --> 0:00:50.640 Bloomberg dot Com, and of course on the Bloomberg Gabriela 0:00:50.720 --> 0:00:53.800 Santos with US with JP Morgan Asset Management. She would 0:00:53.840 --> 0:00:57.760 only appear on Bloomberg Surveillance with a Dow or higher. 0:00:58.120 --> 0:01:00.560 What do you tell people when you say they go 0:01:00.640 --> 0:01:03.880 twenty one? I never imagined it. How do you frame that? 0:01:04.000 --> 0:01:08.440 For sophisticates and those like me less sophisticated, We would 0:01:08.440 --> 0:01:11.199 say that less important than looking at the index level 0:01:11.319 --> 0:01:14.880 is actually looking at the underlying earnings for companies, which 0:01:14.880 --> 0:01:18.119 is exactly what's led us to these higher index levels 0:01:18.160 --> 0:01:22.360 is the fact that US companies are making again uh 0:01:22.440 --> 0:01:26.280 an incredible amount of profits every single quarter. That's really 0:01:26.319 --> 0:01:29.360 the most important piece here. Rather than a particular index level. 0:01:29.520 --> 0:01:31.600 When it comes to volatility, what do we learn last 0:01:31.640 --> 0:01:33.520 week and we had that spike or at least thing 0:01:33.760 --> 0:01:38.120 and nine point nine point nine for what do we 0:01:38.200 --> 0:01:41.039 learned last week from that? When I think about the 0:01:41.120 --> 0:01:44.160 VIX and I think about volatility in the market, um 0:01:44.280 --> 0:01:47.119 there as the volatility in terms of headlines, right and 0:01:47.160 --> 0:01:50.440 those certainly we have plenty of both in the US 0:01:50.520 --> 0:01:53.680 and around the world. But also if we think about 0:01:53.720 --> 0:01:58.360 economic volatility, that's really decreased over the past year or so. 0:01:58.920 --> 0:02:00.840 A lot of the risks that have been threatening the 0:02:00.840 --> 0:02:05.040 global economy have receded from plunging commodity prices to a 0:02:05.120 --> 0:02:09.240 Chinese hard landing too uncontrolled currencies, and that's what is 0:02:09.320 --> 0:02:12.120 keeping volatility low, I think, is the removal of a 0:02:12.160 --> 0:02:15.440 lot of those economic uncertainties. How do you look at 0:02:15.440 --> 0:02:17.600 at Europe playing off of that a little bit? We 0:02:17.639 --> 0:02:19.720 have the political story when following that for for many 0:02:19.720 --> 0:02:21.920 months now, and then there's the economic story. Do you 0:02:21.919 --> 0:02:23.840 cleave both of them? Do you look at them in 0:02:23.919 --> 0:02:26.040 concert with each other? How do you how do you 0:02:26.080 --> 0:02:28.440 look at the European market economy? Right now? We place 0:02:28.560 --> 0:02:32.000 much greater weight on the actual economic story, and that's 0:02:32.040 --> 0:02:34.880 been positive for quite a while now. In Europe, we 0:02:35.000 --> 0:02:37.080 saw some very good growth out of Europe in the 0:02:37.120 --> 0:02:41.120 first quarter, two per cent um growth that's being driven 0:02:41.200 --> 0:02:45.079 by a rebound in consumption as well as investment UH 0:02:45.120 --> 0:02:48.720 and growth that's very diversified by country, and that's very, 0:02:48.880 --> 0:02:53.320 very encouraging in terms of its sustainability. When you look 0:02:53.320 --> 0:02:56.720 at at opportunity overseas UH and emerging markets are at 0:02:56.919 --> 0:02:59.320 the AAR zone, where do you see the greatest opportunity 0:02:59.320 --> 0:03:01.360 at this point? So we see in exactly both of 0:03:01.360 --> 0:03:05.720 those regions you mentioned, so the Eurozone specifically speaking, and 0:03:06.080 --> 0:03:08.280 when we think about companies, we want companies that are 0:03:08.320 --> 0:03:11.800 able to access that domestic story in Europe, so companies 0:03:11.840 --> 0:03:14.840 that can tap into that rebound in the European consumer, 0:03:14.919 --> 0:03:18.680 for example. And we also look at emerging markets and say, 0:03:18.960 --> 0:03:24.440 with so many, so much stability in these external variables China, commodities, currencies, 0:03:24.800 --> 0:03:28.720 that's actually a good environment for growth to continue improving 0:03:28.800 --> 0:03:33.200 in e M with within this is the feeling that 0:03:33.240 --> 0:03:37.200 it's the greatest bowl market since time began, and people 0:03:37.200 --> 0:03:39.360 say it's unloved, is it really? I mean, you're out 0:03:39.360 --> 0:03:42.360 in the trenches what do you hear from institutional people 0:03:42.480 --> 0:03:44.920 desperate to make the benchmark? And what do you hear 0:03:44.960 --> 0:03:48.160 from high net high net worth people. You know they're 0:03:48.160 --> 0:03:49.960 in cash, their scirits off. What do I do with 0:03:50.000 --> 0:03:53.160 the next three million dollars? Now that we have that problem, 0:03:53.240 --> 0:03:56.520 But what's the mood out there? It has been incredibly 0:03:56.600 --> 0:04:01.400 unloved and I think it's still like Dan Saunders H 0:04:01.800 --> 0:04:06.240 David is adamant about this, it's still totally unlooked. And 0:04:06.640 --> 0:04:09.360 we feel that when we're on the road speaking to clients, 0:04:09.400 --> 0:04:13.480 both of the institutional and the individual variety. Our job 0:04:13.520 --> 0:04:16.159 for the past few years has been talking people off 0:04:16.160 --> 0:04:18.479 the brink thinking that the US is about to go 0:04:18.520 --> 0:04:21.520 into a recession, companies will never make enough money again. 0:04:22.200 --> 0:04:24.640 And that's what I think has made it very unloved. 0:04:24.760 --> 0:04:29.599 Is this distrust of economic and earnings data. Um perhaps 0:04:29.680 --> 0:04:32.880 that's starting to shift as we're starting to see some 0:04:32.960 --> 0:04:35.720 fading of those concerns, but we still see a lot 0:04:35.760 --> 0:04:39.400 of special especially individual investors, that are still very heavy 0:04:39.400 --> 0:04:42.920 on cash and fixing income. Is dividend grows still work? 0:04:43.160 --> 0:04:47.719 We got seconds the just the theme of our lifetime 0:04:47.800 --> 0:04:50.279 is dividend growth Still the religion. Well, you have to 0:04:50.279 --> 0:04:54.040 think about sustainable dividend growth and whether you also have 0:04:54.080 --> 0:04:56.599 earnings growth that's associated with that. So it's not just 0:04:57.080 --> 0:05:00.880 purely chasing dividends and utilities and Telecom's chasing companies that 0:05:00.920 --> 0:05:03.880 are able to grow their dividends and their earnings. We 0:05:03.920 --> 0:05:06.120 want to give us a name or to just you know, 0:05:06.279 --> 0:05:11.040 try to, you know, someday we can speak to in 0:05:11.120 --> 0:05:14.120 terms of sectors, I would think about financials. Is actually 0:05:14.120 --> 0:05:16.800 a great dividend and earnings play the reason you have 0:05:16.880 --> 0:05:19.680 Gabriela Santos back, we didn't cover financials. How about that? 0:05:19.880 --> 0:05:34.600 She is with JP Morgan with our question. Our interview 0:05:34.600 --> 0:05:38.240 of the day was on China on the misinformation, the 0:05:38.320 --> 0:05:41.800 miss and the reality as we can perceive it of 0:05:41.880 --> 0:05:45.240 their financial system. This was Donald Strassheim. We did this 0:05:45.240 --> 0:05:48.160 on Bloomberg Television earlier and we are thrilled to go 0:05:48.279 --> 0:05:51.359 further now on Bloomberg Radio. David Guraw was just great 0:05:51.440 --> 0:05:54.920 on that new fragility and mystery of what they're doing. Yeah, 0:05:55.000 --> 0:05:56.440 thanks for it for sticking a right. Let me ask you, 0:05:56.480 --> 0:05:58.520 first of all, what we know about China's death picture. 0:05:58.520 --> 0:06:00.640 We saw the news of the downgrade yesterday China out 0:06:00.640 --> 0:06:04.359 It's Moody's fifth highest investment great tick down a notch. 0:06:04.720 --> 0:06:06.400 What do we know about the debt picture? There's all 0:06:06.400 --> 0:06:07.960 of this shadow banking. How much of it is still 0:06:08.000 --> 0:06:12.680 a mystery? A lot of it's still a mystery. Um, 0:06:12.760 --> 0:06:16.719 there is uh a mystery in terms I think of 0:06:16.800 --> 0:06:22.400 actual levels. There is a mystery of whether there is 0:06:22.600 --> 0:06:31.680 a mismatch of maturities of all these various paper How much, um, 0:06:31.920 --> 0:06:35.240 how much of long term projects are being financed with 0:06:36.000 --> 0:06:40.440 short term money? This is inherently a problem to be 0:06:41.560 --> 0:06:44.640 to be avoided. Are we are we seeing defaults? Are 0:06:44.640 --> 0:06:47.840 we beginning to see more defaults in China? Not materially 0:06:48.360 --> 0:06:51.960 that's one of the problems, I think quite frankly, Um, 0:06:52.040 --> 0:06:56.640 you need to have HUM. I don't hesitate to use 0:06:56.720 --> 0:07:01.280 the term, but an honest system, and failures are part 0:07:01.320 --> 0:07:07.400 of the process. And what we see rather is um 0:07:07.680 --> 0:07:11.440 loans that are clearly non performing get evergreened and they 0:07:11.520 --> 0:07:15.240 rolled over, they get rolled over again and again. And 0:07:15.440 --> 0:07:18.680 bonds that are financing some four thousand seat opera house 0:07:19.000 --> 0:07:22.600 uh in some middle size city that there's just not 0:07:22.760 --> 0:07:25.120 four thousand people to go there every Friday, and Saturday 0:07:25.200 --> 0:07:28.680 night for the next decade, and these get rolled over 0:07:28.720 --> 0:07:33.600 and over and when when that kind of thing happens, Uh, 0:07:33.640 --> 0:07:38.120 it just creates uncertainty and doubt and it's a bad thing, 0:07:38.240 --> 0:07:40.360 not a good one. How do you dovetail this that 0:07:40.440 --> 0:07:43.560 the conversation about China's debt with what the Chinese president 0:07:43.600 --> 0:07:46.120 unveiled at that form a few weeks back we saw 0:07:46.320 --> 0:07:48.880 the meeting at the State Guesthouse with with Vladimir Putin 0:07:48.960 --> 0:07:51.760 all of that, How does that complicate the dead picture 0:07:52.000 --> 0:07:55.840 the ambitious plans of creating this new Silk Road. Actually, 0:07:56.240 --> 0:08:00.320 I don't think it really does complicate it. Uh. Anything 0:08:00.360 --> 0:08:03.560 that happens in this so called new Silk Row one belt, 0:08:03.600 --> 0:08:10.400 one road project is going to be agreement among um 0:08:10.480 --> 0:08:14.360 kind of consenting adults. And so China is going to 0:08:14.480 --> 0:08:18.080 have a deal with Country X and this or maybe 0:08:18.120 --> 0:08:24.680 a multilateral deal on some infrastructure project or whatever happens 0:08:24.720 --> 0:08:29.520 to be. UM. Unless all parties agree to this, it's 0:08:29.520 --> 0:08:31.680 not going to happen. So we don't really know the 0:08:31.800 --> 0:08:36.280 scope of this project yet and we won't uh, And 0:08:36.440 --> 0:08:40.160 it'll be a constantly moving target. Given how important debt 0:08:40.160 --> 0:08:42.480 has been to fueling the Chinese e comedy. What what 0:08:42.559 --> 0:08:46.360 will the Chinese prison do? What options are available to him? Uh? 0:08:47.320 --> 0:08:49.400 Would he scale back the reliance on debt? Is that 0:08:49.440 --> 0:08:51.880 even a possibility? But does he have to keep counting 0:08:51.880 --> 0:08:54.560 on it to maintain the level of growth we've all 0:08:54.600 --> 0:08:59.719 become accustomed to? There? He he has to continue. Uh, 0:09:00.760 --> 0:09:03.560 they are reliant on debt, they're addicted today. He has 0:09:03.600 --> 0:09:06.240 to continue that. He can't do He can't reduce it 0:09:06.280 --> 0:09:11.040 in any kind of uh precipitous way. But their growth 0:09:11.080 --> 0:09:12.840 rate is going to come down, and it's going to 0:09:12.880 --> 0:09:15.560 come down a long ways over the next decade. And 0:09:15.679 --> 0:09:18.240 it is a myth to think the new normal, just 0:09:18.640 --> 0:09:21.240 to use bill growth term from a few years ago. 0:09:21.559 --> 0:09:23.880 The new normal is not any number. Well, it's a 0:09:23.920 --> 0:09:26.280 lower number every year. I want to go back to. 0:09:26.360 --> 0:09:30.319 And I'm gonna mispronounce this, sir. The Guaso opera house 0:09:30.559 --> 0:09:33.760 is Guiso on the Pearl River, right, So they build 0:09:33.760 --> 0:09:35.560 an opera house. Maybe it's that one, maybe it's one 0:09:35.640 --> 0:09:38.520 of ten others, and they have debt for that. Who 0:09:38.600 --> 0:09:42.640 holds that debt? The banks, the state owned banks, the 0:09:42.960 --> 0:09:47.559 state owned the issue bonds to build an opera house. 0:09:47.720 --> 0:09:51.079 I assume the government issues the bonds. Who owns the banks? 0:09:51.880 --> 0:09:56.560 The banks not like a mutual fund that this is 0:09:56.600 --> 0:09:59.040 not usually owned by guys like you and me over 0:09:59.080 --> 0:10:02.840 there are there in solvent If they own Guangcho opera 0:10:02.880 --> 0:10:06.439 house bonds, they are. They are solving so long as 0:10:06.679 --> 0:10:10.520 the lender of last resort is prepared to make them solves. 0:10:10.520 --> 0:10:13.040 So this is my key question. I don't have time, 0:10:13.080 --> 0:10:15.839 but do they have the cash to be lender of 0:10:15.960 --> 0:10:18.920 last resort? The answers they do. The answer is they do? 0:10:19.120 --> 0:10:24.040 What do they they? Well, what's the hurry? Okay, well, 0:10:24.080 --> 0:10:29.200 the hurry maybe the international markets. The whole issue is 0:10:30.400 --> 0:10:32.800 they control both your kids side of the liabilities side 0:10:32.800 --> 0:10:34.880 of their own ballet, don we Gotta go, won't play 0:10:34.880 --> 0:10:37.920 Pocito dumno? Here to get us out down strass, I'm 0:10:37.960 --> 0:10:55.439 on Chinese opera houses. This is Bloomberg. We promised this 0:10:55.520 --> 0:10:57.920 a few minutes ago. Eager to have is he commnual 0:10:58.000 --> 0:10:59.760 joining us now? I could spend five minutes reading all 0:10:59.760 --> 0:11:01.760 of his various professional titles. I'm just gonna say here. 0:11:01.760 --> 0:11:04.160 He's a Vice Provost for Global Initiatives at the University 0:11:04.160 --> 0:11:06.880 of Pennsylvania, Senior fellow at the Center for American Progress 0:11:06.880 --> 0:11:09.760 will flag his new book as well forthcoming. Uh. Here 0:11:09.800 --> 0:11:12.480 I think in early June the book called Prescription for 0:11:12.559 --> 0:11:15.760 the Future, the twelve Transformational Practices of highly Effective Medical 0:11:16.280 --> 0:11:19.880 Organization zeke. Let's start with that CBO score highly anticipated. 0:11:19.920 --> 0:11:23.079 Another iteration of scoring on this on this bill, the 0:11:23.120 --> 0:11:25.520 American Healthcare Act. What did you take away from what 0:11:25.559 --> 0:11:29.680 the CBO had to say yesterday? Well, basically, it's the 0:11:29.720 --> 0:11:32.800 same as be born. It shows you that the MacArthur 0:11:33.040 --> 0:11:38.920 effort to quote unquote soften the houses affordable American Healthcare 0:11:38.960 --> 0:11:42.160 Act did almost nothing. Uh. It's spent a bunch of 0:11:42.200 --> 0:11:47.080 billions of dollars and had negligible impact even on the 0:11:47.160 --> 0:11:50.359 number of uninsured or on the total cost of healthcare 0:11:51.080 --> 0:11:55.240 for Americans who would buy insurance. Uh. You have twenty 0:11:55.240 --> 0:11:58.679 three million people going to be thrown off insurance. Uh. 0:11:58.720 --> 0:12:02.120 The uninsured rates going to go over fifty million Americans 0:12:02.120 --> 0:12:06.760 by twenty UM. I think you know I've u this 0:12:06.800 --> 0:12:10.280 word before to describe the American Healthcare Act. It's cruel. 0:12:10.640 --> 0:12:13.320 I don't. I find it's hard to analyze it any 0:12:13.320 --> 0:12:17.880 other way. It grows twenty three million people off of coverage. Uh, 0:12:17.920 --> 0:12:22.640 it raises insurance premiums, especially for people who have illnesses. UH. 0:12:22.679 --> 0:12:26.760 And it gives a big tax break to healthcare corporations 0:12:26.880 --> 0:12:29.839 and the rich. UM. This does not sound like the 0:12:29.960 --> 0:12:33.480 kind of plan most Americans want. UH. It seems very 0:12:33.640 --> 0:12:37.600 very cruel. We had Michael Cannon on your friend, Michael 0:12:37.600 --> 0:12:39.920 Cannon from the Cato Institute just a few minutes ago, 0:12:40.000 --> 0:12:43.360 and he was talking about, yes, this particular piece of legislation, 0:12:43.400 --> 0:12:45.000 but also what he thinks is wrong with with the 0:12:45.000 --> 0:12:47.280 Affordable Care Act, and he plays his blame squarely on 0:12:47.320 --> 0:12:50.640 the the regulations imposed by that law. I just want 0:12:50.640 --> 0:12:53.000 to get your response to that. When you when you 0:12:53.080 --> 0:12:55.600 look at these insurance companies pulling out of market places 0:12:55.640 --> 0:12:58.839 in places like Kansas City or Iowa, Virginia, how much 0:12:58.840 --> 0:13:01.400 of that is attributable early to to to what's called 0:13:01.440 --> 0:13:04.840 for by the Affordable Care Act. Well, a lot of 0:13:04.840 --> 0:13:09.400 it's attributable to UH. I would say, let's put it 0:13:09.440 --> 0:13:13.200 this way. You could easily stabilize all the insurance markets. 0:13:13.320 --> 0:13:16.240 And you should remember the Congressional Budget Office said they're 0:13:16.280 --> 0:13:18.480 here to stay, they're not going away. You could easily 0:13:18.520 --> 0:13:22.360 stabilize them by enforcing the mandate. UH. Strongly and telling 0:13:22.480 --> 0:13:24.319 reminding people to have to buy insurance. That will get 0:13:24.360 --> 0:13:27.240 some people to buy insurance. Second, of all, those cost 0:13:27.280 --> 0:13:30.160 sharing subsidies that the Republicans keep threatening or at least 0:13:30.160 --> 0:13:33.200 making uncertain, means that insurance companies don't know whether to 0:13:33.320 --> 0:13:36.240 bang on them or not, and so are raising rates 0:13:36.280 --> 0:13:39.640 and are or or withdrawing. And the third thing you 0:13:39.679 --> 0:13:43.240 could do is the reinsurance, which remember Marco Rubio pulled 0:13:43.280 --> 0:13:45.520 out at the Affordable Care Act, was solidly in the 0:13:45.800 --> 0:13:48.800 Affordable Care Act and he changed the rules halfway through 0:13:49.000 --> 0:13:51.160 the game. Do those three things and there are someone 0:13:51.640 --> 0:13:55.280 to better targeted advertising, and those marketplaces are stable and 0:13:55.360 --> 0:13:58.480 actually the rates come down. So I agree that we 0:13:58.520 --> 0:14:00.839 could do more with Cannon, but that's not to say 0:14:00.880 --> 0:14:03.600 you throw the whole thing out that talks about reform 0:14:03.880 --> 0:14:06.439 not repeal. He is scathing and we've got a huge 0:14:06.480 --> 0:14:09.360 response against Mr Cannon. Thank you all of you for 0:14:09.400 --> 0:14:13.120 emailing uh In, particularly Matt in London. Ze Commanuel, the 0:14:13.240 --> 0:14:17.559 first thing you said is a distinction of do a mandate, 0:14:17.720 --> 0:14:22.800 So everybody's covered. That seems to be the not Democrat, 0:14:22.920 --> 0:14:27.760 not Republican, but the libertarian complaint. What is your study 0:14:27.880 --> 0:14:32.880 and analysis of the outcome of mandating everybody to do this. 0:14:33.120 --> 0:14:39.720 What happens, Well, the public doesn't like I mean, and 0:14:39.760 --> 0:14:42.080 I'll be honest. The poems suggest that it is the 0:14:42.160 --> 0:14:44.240 single part of the Affordable Care Act which the public 0:14:44.280 --> 0:14:48.560 doesn't like. A mandate. You cannot but the public has 0:14:48.560 --> 0:14:50.840 to be educated. And again I would say that we 0:14:51.240 --> 0:14:53.920 democrats but not do a good job of educating them 0:14:54.040 --> 0:14:57.440 to say, Look, you want no pre existing condition exclusions. 0:14:57.640 --> 0:15:00.280 You want everyone to be able to get int at 0:15:00.360 --> 0:15:03.120 a reasonable rate. You have to have a mandate or 0:15:03.160 --> 0:15:07.160 you have to have Why can't we do that? Where's 0:15:07.200 --> 0:15:11.360 the courage, where's the will to say this is what 0:15:11.440 --> 0:15:13.200 we believe in. If you don't like it, this is 0:15:13.240 --> 0:15:16.880 the outcome. Yes, I think I think we have to 0:15:16.920 --> 0:15:18.840 do a better time to explain that. But I would 0:15:18.840 --> 0:15:22.240 say so for my standpoint, if we don't like the mandate, 0:15:22.400 --> 0:15:25.320 the only alternative to really getting a stable market with 0:15:25.480 --> 0:15:28.760 pre existing disease exclusions is we're going to auto enroll 0:15:28.840 --> 0:15:32.680 everyone into an insurance package. Everyone gets it by default 0:15:32.760 --> 0:15:36.200 of being an American. We do that with Medicare, party, 0:15:36.360 --> 0:15:39.200 we basically do that with Social Security. I think that's 0:15:39.240 --> 0:15:41.640 it Okay, the alternative. Here's what we're gonna do. We're 0:15:41.640 --> 0:15:43.960 gonna come back. David Gura just wrote down that smart 0:15:44.000 --> 0:15:47.160 response from Dr Emmanuel. This is a raging debate. What 0:15:47.280 --> 0:15:50.240 we're trying to do with surveillance, folks, is give you 0:15:50.400 --> 0:15:53.920 many conversations on this so you can decide. We hope 0:15:53.960 --> 0:15:58.640 you're accomplishing that with us. Right now, Doctor Emanuel, I've 0:15:58.640 --> 0:16:00.320 got a sore elbow. Maybe you can help me with 0:16:00.360 --> 0:16:03.359 it later, Zeke Manuel. The new book will be prescription 0:16:03.720 --> 0:16:08.400 for the future. David Gura is unleashed, Doctor Manuel. One 0:16:08.440 --> 0:16:12.200 of the most important photographs in the history and courage 0:16:12.200 --> 0:16:17.200 of American medicine. Eighteen forty seven the Massachusetts General Hospital 0:16:17.760 --> 0:16:23.200 Southwestern Haws early operation using ether for anesthesia. That is 0:16:23.240 --> 0:16:27.280 a spiritual place in America, that dome at mg H 0:16:27.400 --> 0:16:29.320 and the photograph. I'll put it out on Twitter, folks. 0:16:29.520 --> 0:16:34.760 The photographs extraordinary. I think it's eight six. John Warren 0:16:34.880 --> 0:16:38.720 did h and he was the nephew of one of 0:16:38.760 --> 0:16:43.560 the great American unknown American revolutionary heroes, Joseph Warren, who 0:16:43.600 --> 0:16:45.800 was a physician in Boston and the leader of the 0:16:45.800 --> 0:16:48.720 Boston Revolutionary Group. And I know this photo. I know 0:16:48.800 --> 0:16:51.240 this from Joseph Warren and Johnny Tremaine, which I read 0:16:51.240 --> 0:16:54.920 when I was ten years Oh, zeke Emanuel, here's the 0:16:54.960 --> 0:16:59.040 emotion that everybody faces. If we go to a socialized 0:16:59.160 --> 0:17:03.960 medicine further on than Obamacare, where everyone's covered, we will 0:17:04.040 --> 0:17:09.360 lose our technical and research excellence. Will we lose our 0:17:09.640 --> 0:17:16.760 worldwide excellence in medicine if we go to where everyone's covered? Oh? 0:17:16.800 --> 0:17:21.880 Absolutely not. Just quite the contrary what you see once 0:17:21.920 --> 0:17:25.119 you do cover everyone, as you see a focus on 0:17:25.200 --> 0:17:29.480 trying to dramatically improve equality and lower the costs of healthcare, 0:17:29.720 --> 0:17:31.800 and that yields a lot of innovation. One of the 0:17:31.840 --> 0:17:34.040 things I like to say to investors is in the 0:17:34.119 --> 0:17:37.280 seven years, in the five years immediately after passage of 0:17:37.280 --> 0:17:42.280 the Affordable Care Act, venture funding and healthcare increase compared 0:17:42.320 --> 0:17:45.240 to the five years before. UM, there are a lot 0:17:45.320 --> 0:17:47.840 of talented people coming into healthcare because they see a 0:17:47.840 --> 0:17:50.600 lot of ways to innovate in the delivery of care, 0:17:50.880 --> 0:17:54.960 making it much more efficient, uh, making it much better 0:17:55.160 --> 0:17:57.760 for patients. So I think, quite the contract, you're going 0:17:57.800 --> 0:18:01.679 to see a huge flood actually, uh with if we 0:18:01.760 --> 0:18:06.280 continue with the Affordable Care Act in universal coverage of innovation. UH, 0:18:06.320 --> 0:18:09.600 in lots of places we haven't seen innovation before UM, 0:18:09.680 --> 0:18:12.760 and that's very important. Do not think of innovation and 0:18:12.800 --> 0:18:15.040 healthcare is just a new pill or a new medicine. 0:18:15.240 --> 0:18:18.280 There are going to be innovative processes of care, innovative 0:18:18.320 --> 0:18:20.560 ways of trying to get patients to be more adherent 0:18:20.600 --> 0:18:24.320 to their treatments and to lifestyle changes. And those are 0:18:24.359 --> 0:18:28.440 all serious and very vital innovations for improving our health, 0:18:28.720 --> 0:18:31.760 which is the ultimate outcome measure. I definitely want to 0:18:31.800 --> 0:18:33.480 talk a bit about that in just a minute here, 0:18:33.520 --> 0:18:34.760 But let me put a question to you that I 0:18:34.760 --> 0:18:36.760 put to Michael Cannon a few moments ago. That is, 0:18:36.800 --> 0:18:38.720 if if you have a lot of these companies pulling 0:18:38.720 --> 0:18:41.760 out of marketplaces, do you think that that turns sentiment 0:18:41.800 --> 0:18:45.240 against those companies and makes makes Americans more willing to 0:18:45.280 --> 0:18:50.480 consider a single payer system where a government run healthcare plan. 0:18:50.560 --> 0:18:52.320 Michael Cannon, I don't mean to have you guys debate 0:18:52.320 --> 0:18:54.280 by proxy. His response to that was he thinks that 0:18:54.280 --> 0:18:56.840 there are those in in Republican circles in particular, who 0:18:56.840 --> 0:18:58.720 think that was the plan all along, that this was 0:18:58.760 --> 0:19:01.840 going to May We're handicapped the insurance industry so much 0:19:01.880 --> 0:19:04.000 that we were going to get that universal coverage. I'll 0:19:04.040 --> 0:19:05.320 let you respond to that if you'd like, But I 0:19:05.320 --> 0:19:09.840 just wonder what you what you think sentiment. First of all, 0:19:09.840 --> 0:19:13.800 I think that's a ludicrous analysis if you actually look 0:19:13.880 --> 0:19:16.760 what happened after the passage of the Affordable Care Act, UH. 0:19:16.800 --> 0:19:20.840 The insurance company UH number of members went up, their 0:19:20.880 --> 0:19:24.240 revenues went up, and their stock prices went up. Everyone 0:19:24.480 --> 0:19:28.359 thought this was a great bill for insurance companies. UH. 0:19:28.480 --> 0:19:30.720 Not the reverse that it was a covert method to 0:19:30.760 --> 0:19:35.280 blow up insurance companies. Remember, the problem here for the 0:19:35.359 --> 0:19:37.960 exchanges has not been the Affordable correct It's been the 0:19:38.000 --> 0:19:41.199 Republicans pulling away the reinsurance and saying, well, we're not 0:19:41.240 --> 0:19:44.080 going to fund the cost sharing subsidies. That's what's thrown 0:19:44.160 --> 0:19:46.879 the insurance market into his tail spin. So it was 0:19:46.960 --> 0:19:51.040 not a covert way to get UH single payer at all. 0:19:51.200 --> 0:19:53.720 And there are many people who worked on it, myself included, 0:19:53.760 --> 0:19:56.520 who were not did not think single player was something 0:19:56.560 --> 0:19:58.800 we're going to get in the United States, or maybe 0:19:58.840 --> 0:20:01.679 even the most a horrible way of delivering healthcare for 0:20:01.720 --> 0:20:04.880 a variety of reasons. So I think that's the absurd, 0:20:05.119 --> 0:20:10.720 uh conspiracy theory, UH fake news story. I look at 0:20:10.760 --> 0:20:13.240 your book here again out on June the six, so 0:20:13.280 --> 0:20:15.080 we have a preview you copy, but but one of 0:20:15.119 --> 0:20:16.960 them here, a chapter here is how to pick your doctor. 0:20:16.960 --> 0:20:18.560 And I think that's something a lot of people wrestle 0:20:18.880 --> 0:20:22.520 within this conversation about where medicine is going, how it's 0:20:22.520 --> 0:20:25.200 being transformed. That's the notion of how you pick a 0:20:25.240 --> 0:20:30.240 physician changed. Yes, I do think we have better ways 0:20:30.240 --> 0:20:32.320 of trying to pick a physician. The first thing you 0:20:32.359 --> 0:20:36.120 want is a physician who's focused in uh in arranging 0:20:36.160 --> 0:20:39.879 their office on patients, not on making their schedule better. 0:20:40.119 --> 0:20:41.840 So one of the things you want to ask is 0:20:42.000 --> 0:20:44.760 do they have something called open access scheduling, That is, 0:20:44.960 --> 0:20:47.159 they have open spots in the day, so if something 0:20:47.200 --> 0:20:49.240 comes up or you happen to have three times, you 0:20:49.280 --> 0:20:51.600 can actually see the doctor when you want, not when 0:20:51.600 --> 0:20:54.760 the doctor wants. The second thing that's really important is 0:20:54.760 --> 0:20:57.520 you want a doctor who's monitoring their quality. So you 0:20:57.560 --> 0:21:01.520 want someone who's evaluating on an ongoing asist their performance. 0:21:01.800 --> 0:21:04.760 I recommend in the book you want a doctor who's 0:21:04.800 --> 0:21:08.119 got a patient centered medical home UM That's not the 0:21:08.200 --> 0:21:10.760 only way they could evaluate it, but it is one 0:21:10.800 --> 0:21:13.800 way many doctors do. I think those are probably the 0:21:13.800 --> 0:21:17.160 two best criteria. UM. I would say, you know, I'm 0:21:17.200 --> 0:21:20.560 sort of as the chapter suggests, I'm against concierge medicine, 0:21:20.680 --> 0:21:23.600 and I'm against just relying on word of mouth. Those 0:21:23.680 --> 0:21:28.040 tend not to be or the your local magazines. You know, 0:21:28.400 --> 0:21:31.639 fifty best doctors in the Washington, D c. Area wherever 0:21:31.640 --> 0:21:34.600 it happened to be. Those tend not to be UM 0:21:34.800 --> 0:21:38.760 driven by any data. Let me ask you the same 0:21:38.840 --> 0:21:42.160 question I asked Michael Cannon. We had Missouri, Kansas City, 0:21:42.200 --> 0:21:46.639 Blue across whatever drop out of these programs yesterday. Michael 0:21:46.680 --> 0:21:49.119 Cannon of course mentions Tennessee. You know all these you 0:21:49.160 --> 0:21:52.960 know what zip codes are involved, et cetera. Where's the 0:21:53.040 --> 0:21:56.520 tip point? Where's the point where you know, not that 0:21:56.520 --> 0:21:59.480 they're going to protest in front of sixtund Pennsylvania Avenue, 0:21:59.480 --> 0:22:02.399 whoever is the White House, But where's the tip point? 0:22:02.680 --> 0:22:07.040 Is insurance companies just say this isn't working? Yeah? No, 0:22:07.119 --> 0:22:13.440 I think the tipping point is going to be the elections. 0:22:13.560 --> 0:22:16.320 If you want to know the truth, I think if 0:22:16.359 --> 0:22:20.960 I were Mr Uh MacArthur in New Jersey. I'd be nervous, uh, 0:22:20.960 --> 0:22:25.720 And I think a lot of moderate Republicans are nervous. Unfortunately, 0:22:25.760 --> 0:22:28.600 given the gerrymandering, the people who voted for it are 0:22:28.720 --> 0:22:30.960 are going to be you know, immune. But I think 0:22:30.960 --> 0:22:32.919 the Republicans are going to take uh, you know, this 0:22:33.000 --> 0:22:36.520 is an election issue and people have you know, taking 0:22:36.560 --> 0:22:40.720 away guaranteed insurance and guaranteed no pre existing conditions. People 0:22:40.760 --> 0:22:43.680 are very upset about that, and I think you are 0:22:43.720 --> 0:22:46.480 going to see people pay the price. And then we're 0:22:46.480 --> 0:22:49.280 gonna get back to all right, how do we stabilize 0:22:49.280 --> 0:22:51.520 the market. What are the reforms we need? And again 0:22:51.960 --> 0:22:55.720 I'm I'm honest. We've had you known seven years. We 0:22:55.800 --> 0:22:58.760 need reforms. It's not like the Affordable Care Actors working perfectly. 0:22:58.960 --> 0:23:03.439 But reform is not throw everything out through millions. Okay, okay, 0:23:03.560 --> 0:23:05.840 but but you you hit the heart, you built this thing. 0:23:05.880 --> 0:23:09.040 It's your fault. So seek if it's your fault, what 0:23:09.080 --> 0:23:12.520 does Chuck Schumer need to do because quote unquote it's 0:23:12.560 --> 0:23:17.160 not working perfectly. But well, I I've told you that 0:23:17.200 --> 0:23:19.840 there are many things to do. So first, stabilizing the 0:23:19.880 --> 0:23:22.360 insurance market. I gave you the three most important things 0:23:22.359 --> 0:23:25.879 to thank you. H. There's a lot of cost control 0:23:25.960 --> 0:23:29.640 things that we can do quickly. Change how we pay 0:23:29.920 --> 0:23:32.840