massachusetts. so that's the first thing we do. the second thing we do is talk about performance incentives and here we are not talking about the 1% or half percent or 2%. we are talking about performance incentives when fully executed could allow physicians and hospitals to earn up to 10% above their initial global payment. think for a second how different this conversation is. most conversations between health plans and physicians and hospitals are every other year adversarial conversations about price. this is a conversation about a five-year partnership. five-year partnership about quality and about affordability. it's an entirely different conversations of providers in the first year that will earn quality incentives where they are in terms of measurement can earn up to 10%. and then finally as we try to explain to hospitals and physicians and the are increasing the understanding there is an enormous opportunity for them to keep the savings from eliminating on necessary harmful care and waste i

massachusetts. cleve is a very important leader of healthcare reform in massachusetts. he's also participating very much in the day-to-day way in that healthcare reform as well. he's been an outspoken advocate for quite a bit of time now on payment reform and he is doing some very interesting things with his own company. joining him will be andrew dreyfuss who is executive vice president of healthcare services for blue cross blue shield of massachusetts. >> good morning. it's good to be ñ avoidable medical errors and they could be by abuse or omission of services and a strong statement about medical errors generally in the system. it was the first time that the magnitude of the problem was characterized for the nation in such actionable terms. this report came from a prestigious organization, the institute of medicine, which has lots of physician credibility all around the world. and so about five years ago, kind of having righted our insurance company, we decided that the next place to add value

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 are every other year, adversarial conversations about price. this is the conversation about a five-year partnership. a five-year partnership about quality and about affordability. it's an entirely different conversation. so pro