without being asked so, cleve, where did you get your m.d.? we believe that because of our brand, our members would expect that we would not contract with hospitals and physicians that we knew provided unsafe care or ineffective care. the data suggests that it's as much as 30% of the $13 billion we spend on care in massachusetts for our members may be of questionable value. and then, of course, there's a problem if you spend $13 billion and you pay 90% -- 93% of your claims, there seems to be a problem with that algebra kind of not acknowledging the 30% waste. it became clear that this was a problem that we as an insurer in the community needed to deal with. and, of course, as it's our responsibility to do as members to reduce the unnecessary and morbidity that we now had evidence was occurring. to deal with this, we designed a four-point strategy. the first point headed to a hospital governance. how do we teach hospital trustees to be better advocates for care in their institution? and we made a partnership with the massachusetts hospital ass

and as cleve often said, we're not trying to pay less than we paid today. what we're trying to do is have health care grow at a slower rate than it has been and health care, medical trends in massachusetts is currently around 10%, so medical costs are growing at about 10% per year in massachusetts. premiums are growing a little bit lower, because shifting cost to workers, but medical costs are growing about 10%. so then the second thing, and just the second thing we do is then sit down and negotiate an inflation rate, which we're trying to get down to very close to cpi, in the 3% to 4% range, which is very different than what has happened in massachusetts. that's the first thing we do. the second thing we do is talk about performance incentives. and here, we're not talking about the 1% or have percent on even 2%. we're talking about perform an innocencincentives when it coulw hospitals to learn above 10% above their global payments and think for a 2nd, how different this conversation is. most conversations between health plans and physicians and hospitals a

and as cleve says, there's enough inefficiency, we could handle that. the primary care physician problem they have in massachusetts and elsewhere, that sort of unique to especially. it's not across the board at all. and i don't really know if we have a shortage of it. i mean, you have to choices here. either you say the american people are really stupid. we have a shortage of primary care doctors, therefore we underpay them. that a stupid. [laughter] >> or maybe you say maybe we don't. maybe somebody dreamed this up at but if we really needed them we pay to market this is a market economy in this regard, and why are we. so i'm not totally convinced that we actually have a shortage of primary care physicians. it doesn't make sense to an economist. given the way we price this. >> actually think, really what cleve and patrick were saying, really comes down to unless we reform the payment system we're not going to get the improvements in productivity and efficiency that we need. and i think at a time given more people coverage and increasing the demand for

so we're not as far along as cleve's payment with global capitation type of payment, but we are moving down that path and the providers of care see that as an important vehicle that they are actually asking for. we think with the foundation we have in minnesota, and with the change payment reform, that we can be a model for the nation and we would very much like to step up to that challenge. when we look at some of the collaboration, i mentioned before, understanding where to collaborate, where to compete, we as a community have moved to a number of different organizations. one called the institute for clinical system improvement. we refer to that as icsi. that is also looking at best practices and establishing those for the community, not health plan by health plan, not institution by institution, but for the community. a valuable asset. minnesota community measurement is looking at data, it's looking at the patterns that are emerging in our community, and publishing those. so you as a consumer can go and Ã"2k at minnesota community