put together today and the overarching paper which i would strongly recommend you read by mark and by joshua burner raise very various points of view and various issues with respect to the impact of comparative effectiveness research, various ways of using and constructing that research and the uses of that research. ..

and fortunately, reach a totally successful resolution. i remember the doctors who treated me saying the key to my situation was that there was a very specific cause that was very rare and would occur with almost no one else who had my symptoms. so my first question how does the research capture the individuality, studies and treatment. as many of us have experienced, i know i certainly have, different individuals can react very differently to the same medications based on body chemistry for morbidities. as was raised by one of the questions, different groups in our society, very different medical circumstances, many highly important ways, how does

comparative research address these aspects of individuality with respect to both the studies and treatment. third, compared effectiveness research, comes through very clearly. one is putting together a body of knowledge and useful guidance, and the other is cost benefit judgments. the cost and additional benefit and treatments may have. the obvious question is, leave doctors and patients free to make their own decisions in each case as to what they think looks

best. and great constraints. you go one step further. what role, if any, should this research play in addressing the seemingly inevitable imbalance between fully meeting all medical care needs and any reasonable projection of resources that would be available for medical care. and the one addressed to peter, is there any reasonable way to estimate the benefits comparative economic research will have. even if those benefits are not officially recognized by the congressional budget office. i have an impression as someone who is taking the trouble to read about the subject, compared of research can be a powerful

tool, but there are a lot of questions that need to be explored and resolved i first met peter when he stood out for his intellect, his tour of fullness, industriousness and sense of humor. later in the clinton years we oppose tax cuts which were fiscally unsound, and opposing a social security proposal we thought was fiscally unsound as well as being on sound with respect to retirement security. out of that effort came the decision to found a project which peter lead with the enormous distinction. it was aimed at developing a strategy and policies pursuant to that strategy to promote

economic growth. brodeur pace participation in that growth and increase economic security. we then lost peter to what some viewed as a higher cause. peter is the director of the office of management. in that role he is central, he is looking at the immediate economic crisis. in dealing with the enormous shortfalls with critical public investment, and dealing with federal government's unsustainable long fiscal position. and with respect to economic growth. i have no doubt that peter will lead us to successful resolution.

let me introduce the distinguished peter rorzak. [applause] >> thank you, good morning. i am delighted to be here. i want to start today with a story which was embodied in a recent new yorker article which i found so, telling, i followed up by asking the researchers for additional information. i want to talk for a few moments about this story. there are 2 towns in texas which are both -- they have similar demographics, they both have 700,000 people living there. in 1992, not too surprising, given their similarities in their population, medicare expenditures were fairly similar in the 2 cities in texas. since then, there has been a

dramatic difference. mcalan has grown more quickly than the rest of the country or al passed though. and the result is that now mcallen spends twice as much as the u.s. average. you can see that difference showing up in all sorts of medical indicators. you can continue down the list. those additional expenditures would be worth it if the result was higher quality and better outcomes in mcallen. but as the data suggests, we are not getting higher quality for those additional expenditures in mcallen, quality is actually lower in mcallen than in el

paso. a central fact surrounding our health-care system is that higher cost does not mean higher quality. one of the key thing that has to change is we need to reorient the system rather than more. as we read that article, the first was stunning. they're not aware that they were more intense users of the health-care system. against comparisons event

comparison hospitals. bob raised a series of interesting questions. one is the idiosyncratic nature that he faced. it would be useful for the physicians and doctors to have more information about what was likely to work. we have dramatic variation that is not explainable by medical evidence. lower back pain admitted to mass general, admitted almost randomly, only to see a nerve specialist or phone specialist. it may be a nehr for bone problem affecting your back. it turns out they never measured before that the rate of spinal m

r i was dramatically different whether you enter the hospital through the nerve mode or bone mode and whether you saw narrow radiologist, when they set the radiologist down, why are these so dramatically different? they were able to reduce that variation, eliminate many of the spinal m r is which not only drive up costs but pose potential risks to people. you don't want to get unnecessary tests done. simply providing information could address regional variation and move towards a quality oriented system. sometimes we don't know what works. we don't know whether that spinal mri is or is not warranted. that is the focus of today.

we need much more information provided to the medical system so that doctors and hospitals know what works and whether those additional procedures are not warranted. finally, as the article emphasizes, in some cases, this is not a derogatory statement, it is natural that doctors and hospitals do not do things that disadvantage them financially. we have a set of incentives that reward more intensity, and actually financially penalizes those providers that are more efficient. that approach adopt lower intensity even if they are more effective health care procedures. we need to change that. i will come back to that. finally, there are questions about the way in which we set health-care policy in the united states, the administration has put forward a proposal to empower the medicare payment

advisory committee with fast-track protections under congressional consideration so that we can move towards a system in which you are constantly keeping up with an evolving health care market and addressing the disparities that opened up between mcallen and el paso through an evolutionary process in which changes are adopted, what works and what doesn't and more changes are adopted. all of this is important and i will come back to the health research that is at the art of today's conlan. i want to pause because there has been a lot of confusion about how did ministration is going about undergoing health care reform. in addition to addressing regional variation and moving towards a more efficient system, there is a moral imperative to expand coverage and reduce the ranks of the uninsured. to finance that expansion of

coverage, we will have a hard offsets. i want to be very clear. the package, the reform plan as a whole will be deficit neutral in over the next 5 to 10 years. there is no ambiguity about that. many people have confused our effort to lead to a more efficient health-care system and address regional variation with the hard offsets that are reductions in payments for medicare and vantage plans, reductions in paymentss for other types of providers. s in medication and additional revenue, with the changes that are necessary to lead to a more efficient health-care system. we need to do both, we need to offset the cost of any changes over the next 5 or 10 years in a deficit neutral way. this is not make believe. this is -- these are proposals

that were made by skeptical budget office. on that basis the package must be deficit neutral. it is not just the president's insistence that the plan be deficit neutral, but even if you look at congressional configurations, it is is implausible that a plan with a deficit increase would pass the u.s. senate because you either need 60 votes to pass in which case deficit concerns are likely to be salient for many of the senators who would be considering voting for the package, one relies on reconciliation as a backstop. reconciliation must be deficit reducing. either way, even without the president's insistence, deficit neutrality is going to be a key part of the overall package and the president is insisting that

any way. the confusion of whether this is deficit neutral is misplaced. if that is all we did, if all we did was expand coverage and pay for it in that traditional within the box kind of way, it will be perpetuating a system in which the el pasos and mcallens of the world would be an unsustainable system. in addition to addressing the moral imperative of coverage and paying for it in a responsible way, we need to address data efficiencies and regional variation that arise within the system and that has to do with this other bucket of activity which we are calling the long term game changer's which we believe over time will lead to a more efficient health-care system. i would put to you that i have been at innumerable conferences.

if we are leaving something off the list that you believe would actually help to drive a more efficient health-care system, let me know. we are trying to dilute these long-term game changers as much as possible and i believe we are reflecting the best knowledge about what would work. admittedly, it is uncertain because we have never tried to transform this health-care system into something that would work better. but we are reflecting the considered judgment of people who have studied the system for decades and trying to do the best job we can. i would welcome additional suggestions to the extent that they exist but i want you to appreciate that we're trying to do as much as possible and this is the most aggressive set of game changers ever put on the table either by the administration or the legislative process. so let me return to more

information, being key, we have $19 billion in the recovery act that will go toward health information technology and moving towards a universal system of health by key. i will turn to that in a moment. changes and financial incentives. we have put forward a variety of proposals involving bonus eligible organizations, penalties and incentives to reduce hospital admission rates, other bundle payments that will help to change the financial incentives facing providers so they are more oriented towards quality and less towards 70 and we put forward a change in the process for decision making so we can keep up with the dynamic health-care system over time. the focus of today's conference is one of those pieces, much health care in the united states is not backed by evidence that

it works better than alternative. that is the key reason why this dramatic difference between mcallen, where there's a lot more done, but you don't get better results for it. the variation in seems to occur as the quotations suggests and evidence underscores, the variations in the largest in those areas where we don't know what works and what doesn't. it is clear what should happen, but the variation is less extreme, there's a lot of ambiguity, there is more variation and we have a payment system that accommodates the more intensive approaches even if they are not backed by evidence. you can see this in a variety of ways. the american college of cardiology has clinical practice guidelines, only half of which are backed by hard evidence that

they are justified. similarly, the institute of medicine has suggested that a very large share, perhaps as large as half of the health-care delivered in the united states across the board is not backed by specific evidence that what your doctor is recommending or what is being done actually works better than an alternative. we spend a very tiny share of total health-care spending in the united states trying to examine whether what we're doing works. that needs to change. we have 1.one billion dollars to expand this kind of research. the goal is to provide more information about what is likely to work in that kind of case. let me try to be directly responsive to the excellent questions that were raised

during the previous session. and by mr. rubin. critically important, we do not just look at national averages. there is a huge amount of variation in what is likely to work for different types of people, what that will necessarily entail, i did read the papers for the conference last night. they were very good. we are likely going to have to adopt different types of evidence procedures for this research effort and randomized controlled try and cannot be the only standard by which we judge things. in order to get a wider array of evidence brought to bear we are likely going to have to struggle with different types of evidence. what is fascinating is, at this same time the field of economics is moving away from data econ e

econometri econometrics, causal relationships from larger databases, moving towards randomized controlled trials whenever possible, the medical profession is going to have to move to some degree in the opposite direction and rely on the panel data that will come out of a more expensive set of health information technology, precisely to examine the, be able to get exact individualized recommendations, but what would be more likely for a fly-fishing, distinguished form of public service suffering from back pain, with a rich enough's database, the samples of different types of people become -- it becomes more possible to study what will work and what won't. the other thing we need to pay attention to, this was a key part of one of the other papers

by alan garber and david melt r meltzer, what will happen to future dollars that are appropriated? the value of information concept they put forward strikes me as making a lot of sense. you should research dollars for the areas where there's a lot of uncertainty about what will work, what the right thing to do is, and there's a lot of money going into that kind of procedure. it is the combination, the biggest payoff comes from -- we don't have a lot of information about what is working and what is not and we're spending a lot of money on that stuff. beyond that, there are a variety of other priorities settings that need to occur. finally, i want to speak directly to some of the critics of this effort. it strikes me that this is not

about getting in the way of you and your doctor. it strikes me that it is not about a government run, dictated on/off switch, but it is about making sure that your doctor and you have as much information as possible on what is likely to work for you. it is not always going to be right, but under the current system, you lack a stunning share of cases, that information does not exist. providing your doctor and you with information about back pain, that this procedure is more likely to work and this is not, it is difficult for me to see how that could be something that is a problem, and, in fact, it is difficult for me to see how we will get at the

mcallen/el paso variation without knowing more about precisely what types of procedures, tests, and other medical procedures are likely to work with subsets of the population and allow for individual variation beyond that. i again want to sum up by saying 2 main things. first, we cannot perpetuate a system in which, as you saw from mcallen purses el paso, we spend twice as much in some areas as others and don't seem to get anything in return. addressing that is going to be difficult, you cannot write down a full list of proposals today that will address it in any kind of definitive way. but we conceptually know based on the work that has been done here at the institute of health and elsewhere, the things that are most auspicious, we are trying to do as much of that as

possible and perhaps just as importantly, put in place a change in the process so we can keep up overtime with an e evolving health care market. separate and apart from that, but the health reform that will be adopted at some point this year, working with senator ba h bacchus and others, medicaid savings and additional revenue, we have put on the table $635 billion and scored savings. the president indicated last week that we will be putting $200,000,000,000,000 more on the table in the near future. you can easily do the math to see that your quickly getting into the range of the sorts of packages under discussion on capitol hill. and not confuse those 2 things, we need to address the moral

character of of expanding coverage and make the health care system more efficient. thank you very much. [applause] >> that was terrific. peter has 5 minutes to respond to questions before he has to get to a white house meeting. and in his administration, meetings apparently start on time. somebody right -- >> whenever you like. >> thank you very much, appreciate your comments. i wanted to be sure to clarify, the selection to get or not get an mri is not the decision of radiologists. is the side -- i want to make sure that was clear. >> chad ginn mean to blame the radiologist. >> our first two speakers, and

above what a complex problem these are. we hear comments from the hill with regard to a bill surfacing in july that they be passed by august. some of us are a little uneasy. can you comment on that. >> what the committee has been hard at work, some of the staff members in attendance, this has been -- they have been engaged in discussions for several months. there was a lot of work even before the process began this year. my understanding is it is likely the committee's will be marking up and moving to consideration over the next -- before the august break. there will be plenty of attention paid to what is or is not in that legislation as it moves through the process. what i would say, the finance committee under senator baucus

has been putting forward white papers that provide indications of where they are intending to go. for those who are interested in the major condor's of reform, i would refer you to those white papers with regard to the finance committee, but you are right that the next month or 2 is going to be where you are going to see the reform packages coming together. >> alice? >> peter, as you know, there is a long history of congressional resistance to doing things like competitive bidding on durable medical the claimant or things that medpac recommended have gone nowhere. is there a new mood on capitol hill, a different understanding of the necessity of doing some of these cost savings things?

>> yes. let me answer that in 2 ways. yes, there's widespread appreciation that the reform must be at least deficit neutral and contain costs savings and there is a surprising recognition, a significant recognition that a change in the process would be beneficial. senator baucus has spoken about the fact that he doesn't feel, both because of understandable, real lobbying pressure and because of the technical nature of the medical analyses that need to be done, the finance committee might not be the ideal location for deciding upon the reimbursement rate for durable medical the equipment. as one of the motivations for the proposal we have put