captioning performed by vitac they cannot evaluate a student's course work on the basis of their religious viewpoints and cannot discriminate against student organizations on the basis of their religious viewpoints. a fairly broad based -- we've been able to take through k through university level understood students. in 2011 we had a fairly simple

bill passed that says when a church speaks out on a political issue on a ballot measure -- some of you may have recall in montana a few years bag where a church was asked to register as a political committee. they said no, they can -- any kind of minister can speak out on a ballot measure without having to sign up as a political committee under state laws. this year we've had two critical bills get through. we have a sponsor of our rights to conscience bill. it says if you're a professional that has to be licensed or certified by the state that the government cannot deny, suspend or revoke that license because you declined to provide any service that violates your religious beliefs. if you're a counselor, if you're an attorney, if you are say, no,

i'm sorry, i don't serve that type of clientele, you have the right to decline that service. i would encourage you to look at this bill, senate bill 1365, our governor just signed it. we've had issues in arizona. the state bar in arizona has try to prohibit me. that type of provision would violate my religious beliefs. i've been able to defeat those efforts within the state bar but we need a state law to say, sorry, stay bar, can you not go forward in that type of an area. we had a situation where an individual had been appointed or was recommended or had applied for a state commission and during the public hearing, one of the commissioners actually said i think this person is too

religious, that an organization he's been involved in is too religious. so this same law says that you cannot deny -- there's not a religious test for serving on a state commission. so we had to clarify that in state law to make sure, hey, people, you cannot do this. that is a key test. to have the rights of conscience area go beyond the health care industry, this is what we're trying to do with this regulation. in thearena it's been fairly well established. that's the intent of this legislation. we also had the issue -- you've heard a lot about the hhs mandate today, our representative debbie lesco is with us today. arizona had for ten year e --

ten years that said if you had health insurance, you had to provide family planning. how many faith-based institutions only serve people of the same faith. we saw an opportunity this year to change it and what the arizona exemption says if you're a religiously affiliated employer you're exempted to provide -- religiously affiliated employers are the articles of incorporation state you're a religious organization. we defined religiously affiliated employers in the law. we had a number of us who do not have a religious belief, for example, on contraception and

would say over and over again the government cannot compel anyone to act against their religious beliefs, this was never an issue of access, it was who was going to pay for it but it was quite the debate. you probably saw representative lesco on television with it. to say -- >> we're going live to the alliance for health reform.

>> you'll notice that we've configured this to discuss the variety of parts of the health care world. and every organization

represented there has been extremely helpful not just in financially supporting the series but helping us to plan it out and make sure we had the right folks around the table. and finally, let me just reiterate our thanks to informal advisory board from the national commission coalition on health care, who is also a member off board. there is a sheet describing those folks if those materials. we'll make this whole thing a very productive exercise. we're pleased and actually quite fortunate to have guiding us through this entire series susan denser of health affairs, who i

will not say anything nice about because you know all the good things about her. we're just very happy that she's here to make sure everybody gets a chance to make the contribution that they're doing. susan we'll turn over to you. >> we tried valiantly in the first session and failed, we will probably do that again today, just because of course as we all know there are multiple determinants of higher health care spending and these don't stend to exist in d-- tend to e

discrete silos. and as you know, as ed said today, we're going to be talking about technology and chronic conditions as drivers of health care spending and health care costs. we of course are attempting to understand not just the role that these play in contributing to the health care costs and spending issues but also in particular to start to discuss what is actionable, what can we actually do about these things, are there policy initiatives that would address them that would not contravene some of our own goals in having a robust health care environment that does address our needs. so what we will hear this tension throughout the conversation today as we discuss some of the actionable --

potentially actionable policy solutions but recognize that there are trade-offs involved in embracing them all. to get us started, we're delighted to have two speakers, joe antos from american enterprise institute and ken thorp from emory to expect about the roles of technology and chronic conditions. and joe, we're very happy to have joe here with us today. he decided to have an authentic health care experience over the weekend in order to have a legitimate grip on his subject, but joe managed to come back from a case of sciatica and be with us today. joe, thank you so much for being here. we know it was only with considerable effort that you were able to join us and we appreciate that. so, joe, we're going to start with you. joe has a presentation and then we'll move directly in to ken's presentation. joe, all yours. >> thank you. what do we aim at? okay.

all right. there we are. so i promise to stay on the subject for whole minutes at a time, technology, and of course you saw the picture of marcus welby. you know, if you got up this morning and took a pill, you used medical technology. that's probably what almost everybody in this room did. i took quite a few pills. they didn't do much good. rick, get to work. but virtually everybody -- what's that? i'll be getting to that in just a second. so rick has already taken me off of technology and out of my favorite topic. marcus welby, that instrument that he's using, that was probably the best one that he had in those days. the reason he went to your home to visit you, he took that black

bag, what was in it? a stethoscope, something that had been available sense the greeks. they had a thermometer, too, good deal. health care is not practiced that way anymore. and i think mostly we can say that's a good thing. so there's the contrast to marcus welby. that is is proton beam therapy chamber. it's somewhat controversial but one thing you can be sure about it is it's expensive. it's always interesting to know how these things work. here's a nice schematic. you can see there are these various ways to treat people. the real power source of course is money. if we didn't have big demand for this kind of technology, we

wouldn't spend the money. it's the money at that drives the system. so i'm glad i got past technology so i can now talk about economics. no, seriously, i'll go back to technology in a minute. so that's the point. as susan said, the various sources of health care cost growth that people have attributed over the years are not separable and in particular they all have their root in either the supply of something or the demand for something and since it's a market economy, it means money. and in this particular case it's both supply and demand. so anyway, here's something that i found in someone else's presentation, i thought it was very interesting. this does reflect the march of cost of technology and of course

the march of progress. you know, the traditional technology, which it's not clear that that's really traditional. the real traditional technology of course is something the cave man did so this is really kind of advanced stuff since about 1910 or so. but, you know, we'll take it. and you can see that over time we've gone to more and more sophisticated equipment and every time there's a new generation of equipment, it seems as if the cost is higher. what i can't tell you for sure is whether this is in price adjusted terms but it probably doesn't matter. i think the impression is undoubtedly correct. when people talk about technology, they usually think about pieces of equipment. it's not just pieces of equipment. it's essentially everything that a doctor does. i mentioned drugs.

that's part of technology. equipment is part of technology. not just the equipment that is in the hospital up against the wall of some big thing but also the little things. the stethoscopes work a lot better these days, to pick on the thing that i mentioned marcus welby had. but also it's medical technique. that's part of technology, too. even if the basic tears are the same as they were 20 years ago but you now know how to do it, that is an advantage in technology and all of that adds to both the supply of services that are available to treat disease and diagnose disease and also the demand for such diagnoses and treatments. now, one of the things that you'll see in the literature, which i've never particularly found useful, i'm an old labor economist at heart, but

technology, you'll see the studies that try to parse out how much of cost growth is accountable for -- by various kinds of factors, including technology and technology is that -- is that one thing that can't be directly measured, although i'd argue that the other factors that people usually point to aren't that measurable either. everybody admit that technology isn't that measurable. so it's not technology, it the i don't know factor. so if you see somebody say technology is responsible for 60% of cost growth over some period of time, maybe. maybe not. it's just not at all clear. and technology alone -- as su s suess -- susan said, technology alone isn't the culprit.

if people didn't want it and the money wasn't there to buy it and doctors wouldn't do it, then that technology wouldn't be used. so when you have better technology, you generally have better care. not uniformly but overs vast span of time we see this to be the case. and my example is cataract surgery. there's evidence that a crude form of cataract surgery that was literally someone putting a stick in your eye, was practiced sometime in the babylonian era but more concrete evidence, there's evidence of something in the 16th century of sticking a fancy stick in your eye. that didn't work too well, probably wasn't used too often

and there wasn't anesthesia at that time so you had to really want to do it. in the 60s, vast improvement in enpatient operation, we've learned something about infection so in the 60s we're far more capable of dealing with infection, that was a technological improvement. but it was risky. this is the kind of thing you used a sharp knife, probably sharper than something you're likely to see on the streets of washington in the evening but it's the same basic principle. essentially because it was so risky, very few patients ever got it, it was always reserved for those patients who literally couldn't see out of that eye, often only had one operation and the idea was to extract the lenz and after the operation, which was highly risky, they sewed things up and then the patient

was held in the hospital room with at least two weeks with sandbags so they wouldn't move. very uncomfortable. not so much patients were willing to try it and those who were willing to try it were absolutely at the end of their ropes. that wasn't too long ago. then we move to today, sometimes within the last 15, 10 year20 ye have a much more sophisticated procedure, doctors are liking through microscopes to make sure they're cutting exactly in the right place, using a more sophisticated procedure to replace the lens theshs replace the lens with something that makes you see better than you ever saw in your life. and even better only the unfortunate few don't make it to medicare before this happens. if you're medicare patient, they pick you up, give you lunch, zap out an eye and two weeks later

they do the same thing. so it's the food program. the fact is that better technology is generally consistent with more successful results. and if you have something that works better, you generate better demand. those the price might be lower on a per-patient case, the price is generally lower. there's no guarantee that the price will be lower. overuse, underuse, misuse. these are the terms that everybody hears and a great example has to do with treating coronary disease. this is from a paper done by skinner and they classified using another study from somebody else, they classified different kinds of treatment according to their cost effectiveness and their cost. and you can see the way they did

the classification, and i'm sure anybody could have ample reasons to argue one way or another on any specific intervention but i think the overall sort of pattern here is interesting, that effective low-cost treatments were, according to them, accountable for more than half of the mortality decline due to coronary disease between 1980 and 2000. of course they didn't have the guts to say that anything was actually not cost effective but less cost effective and probably there wasn't anything that wasn't effective in a sense and the word "cost" i think is probably an issue here. you can see that according to their categorization, the more aggressive treatments, constituents, cardiac rehab, they're much more expensive than aspirin, for example, that they account for maybe 19% of the

mortality decline. you want to be a little careful about this kind of display because you have to ask yourself something they didn't ask themselves in the paper, which was what was the condition of the patient? somebody who really needed a cabbage, you could shove an awful lot of aspirin into their mouth on their way to the morgue. so it's not at all clear -- this is in fact a kind of a resit you'll study. it's not very reliable either, but it does say something about our use of services and it does imply something about economic incentives associated with the complicated things. aspirin, who makes money off that? not even the drug companies. cabbages, who makes money off of that? you know who they are. that's something to think about. nonetheless, would you turn this down? would you go back to marcus

welby's day where they had heard about infection but basically couldn't do much? no, of course not. the thing is they want all those things. i'm still sore at rick because he hasn't given me the drug that's really going to help me. but i'll give you till 2:00. what about evidence? can we find out about evidence? here's a study by elliott fisher looking at regional variations in medical spending. and this is an index called the end of life expenditure index. so these are medicare patients at the end of their life, i didn't read the article close enough to know how close to the end of their life they were but you knew they were. so pretty close. and look at the distribution of tests and procedures that were done on people close to the end of their life. and lo and behold what do you see? very few major procedures, quite

a few more minor procedures but a lot of imaging, tests, evaluation and management. that's where the money is for the very sick people and obviously that's where the money is for the not very sick people. it's not in that -- i mean, there's plenty of money in those fancy machines, don't get me wrong. but where is the real through-put? it's in the seemingly ordinary interventions that we're all used to and expect. that's where the money is. okay. so, well, everybody says, well, let's do some effectiveness research and figure out what we really should be doing and don't do the this evenings we shouldn't be doing. the only problem is that there are an awful lot of things that we do and there are very few studies looking at what we should be doing and i don't care whether you look at the stimulus funding and you look at the billions of dollars that are going into other places.

the research can't move fast enough. you can't spend enough money. you'll never get ahead of it because things that we accept for granted we do without question. and occasionally when we question it, such as the on and off again discussion about the blood test for prostate disease, we get a lot of resistance because that's not the way we do it. the reason is that it's probably more than 90% that we're never going to look at, that 10% or whatever the percentage is the small part, the glamorous part. it's heavily regulated, it tends to be drugs first and that doesn't strike me as being the intelligent way to allocate resources if you're going to look at effectiveness research.

this wasn't meant to be a diatribe against skeptical research but i've always been skeptical. these are always highly refined. it's not clear they would tell you what would happen to the average patient in the average setting and that's a problem. that's what you want to know the answer to. is it going to work most of the time rather than under ideal conditions or is it not going to work? things that would work under ideal conditions might well not work under normal conditions. of course let's not forget about the patient because the patient might not be adherent either. and professional judgment changes all the time. why is that? because there are changes in the way you do things and partly because our experience grows. we see more patients. that experience is accumulated not necessarily systematically but it is and our views, professional views about what to

do changes all the time. effectiveness is interesting, it's going to make a lot of people a lot of money, i don't think it going to have any substantial impact on how we spend the money. can we spend or money better? i think there are some things we can do. part of the problem is that hardly anybody in this country actually pays for what they get. they pay for it, they pay 100% for it but they don't know it. they pay through indirect means. when they go to their doctor, the doctor can't tell them how much it's going to cost them because the doctor doesn't know what he's going to get paid. that's where we have to focus our attention and we also focus our attention, of course, on better information. but if you have don't know the price, you are don't know much of anything. knowing clinical effectiveness doesn't get you halfway to knowing whether that's something i want. because what you want know is value. so there are lots of things we can do. the medicare problem has tried

lots of things. they haven't been very successful because it is not a health program, it is a political program and political programs cannot make decisions. they try but they can't. i was tied up with the centers of excellence project, it was a great project, it worked spurtly and it was shelved. another program, the hard part was not setting it up to phase in something that might not work, the hard part is phasing it out. what can do you? conservatives talk a lot about financial incentives. i think this is a case where we do need to apply financial incentives the whole system. private insurance i think is the

more likely place where you're going to see action along these lines. along any of these lines. why? because although they do ultimately report to congress, they don't report directly to congress. so there's a possibility of some progress in making hard decisions and trying to make them stick. i've got to say i haven't seen much evidence of that but as conditions -- economic conditions tighten, as business conditions tighten, as the resistance of employers to higher premiums thereby necessary stating to keep premiums not so high, necessary stating higher and higher ded t deductibles and co-payments, i think we'll begin to see that turn around. one theory that chandra advances is why don't we attach differential co-payments to measures of effectiveness