that sounds like a great idea until you ask ask can you really trust those measures of effectiveness? my answer is it's to variable. new business structures that provide real financial incentives for physicians to rethink their style of practice that, makes a lot of sense if we could find the right kinds of structures. i don't think we've found them yet. what about consumers? in the end what's a consumer? it's a patient. i'm a consumer and if i could find the right thing for me today, i'd go out there and buy it and i'd be paying for it with

my own money chances are and i'd be delighted to do it. so what i'd like to know wanted to know and what consumers would like to know is not only whoo what is it going to cost me but how is it going to affect me and that's really hard to get an answer to and that is really the key to understanding how technology works. finally what about expectations? i left that here for consumers because in the end we don't change our views about what we demand as an absolute minimum and, rick, i wanted to assure you it's a complete cure immediately but until we get reassurance about those things, we will not get control over cost. thank you. >> thank you very much, joe. as joe said, technology adds to both supply and demand and one of of the things we know we have an unending supply of right now

are patients with chronic disease. so, ken, over to you to talk about that. >> okay. first of all, thanks, ed and others, for inviting me. it's a pleasure to be here on this panel. great to see everybody that you often don't see all the time so welcome back to work. i'm having a tough time making the transition myself so i'm delaying this a little bit. susan mentioned i'm going to talk a little bit about another angle of this but it's really not unrelated to what joe talked about, as you'll see in a minute. it always fascinated me in health care some of the most fundamental big questions get the least amount of attention in study. six years ago i went and looked at the literature of what do we know about public data about what's driving the growth in health care spending. one of the last few pieces i saw was a piece that joe did, i

guess it was '92, '93, looking at the time period between 1940 to 1990. and if you think about it, that was a very different time period than the most recent experience that we've had. the number off uninsured over that time period went from 19% to 15%. so the amount of induced spending as our whole system changed overtime was roughly rerelated to insurance and demand and innovation. we brought medicare, medicaid on and we had new innovations that fundamentally changed hough we treat patients, neonatal intensive care units, treatment of low weight babies, treatment for cardiovascular disease and so on.

it was a different time period. i'm going to spend my time looking at the time period between the early 1990s and today. i think the point i'll make is that even during that time peefrd the year-to-year changes in what's driving the growth in spending is somewhat different. i want to look at the long-term drivers here that are more recent. i've sort of taken -- you can decompose this into a lot of different ways. i've looked at this and tried to sort the data into three buckets, looking at the change in spending linked to the chang in the prevalence of treated disease, looking at the the change in spending linked to how much we spend to treat a case and obviously the interactions between the two of those. and if you look it-from-the late 80s to today, about 60% of the growth is linked to rising prevalence of treated disease.

we'll go into what accounts for that. some of that is going to be good, i'll argue, some of that is going to be bad that we can go in and potentially do something about. so just to give you a sense of some of these -- the magnitude of the changes here u, you can down by medical condition and see the prevalence increases and in each of these condition, the factor driving the growth are somewhat different. if you look at the treatment of cholesterol, mental disorders, those have obviously increased very dramatically. much of that is technology related. we have new approaches for treat, patients with cholesterol, we have new medical innovations to treat people with mental disards that we didn't have 30, 40 years ago. diabetes, i'll come back and talk about that, that's almost all incidence increase.

it's not anything to do with detection, largely more patients we're seeing with diabetics, one of the key drivers of rising spending and medicare is rising incidents of diabetes and other cardiovascular related incidences. there are enormous increases in prevalence of treated disease. if you take a step back and say what's driving this growth? some of it as i mentioned is going to be things that we should be happy about, some of them are going to be things we shouldn't be happy about. so the first one, diabetes, our detection rates of diabetes really haven't changed much in the last 20 or 30 years. we're today detecting about 72% of total cases of diabetes. that's gone up from the upper 60s 10, 15, 20 years ago but we're not doing a whole lot better in detecting diabetes so

the prevalence -- treated prevalence numbers we see for that are really just incidence increases, not detection increases. the second one is debatable and controversial but there's no question that over time we've changed the definition of disease. particularly cardiovascular disease. most of the studies i've seen that have looked at that think that's a good thing that, a more aggressive treatment of cardiovascular risk factors has been a leading cause of declining rates of card your vascular mortality over the last 20 years. new medical technologies, the treatment of mental disorders and joe went through that, provide more fools for to us treat pishs that we didn't have

and changes of disease. if you look at something as simple as diabetes, that's changed a little overtime in terms of the clinical blood sugar levels that kick off a dying of diabetes versus prediabetes. one of the things that's very different in this time period that we're looking at is increases in obesity. if you look at the 1960s, 1970s, 1980s, that whole time period the share of adults considered obese was about 17%. really didn't change for about 30 years so clearly not a corrector over the time period that joe was looking at to rising health care costs. it was just not changed. it was a constant. that's not the case most recently. if you look at the long-term trends here and hopefully we're

stabilizing it a little bit, it's doubled since the mid 1980s and if you look at some of the calculations that are just linking or looking at hope of the growth in spending is due solely to obesity holding technology constant, holding treatment intensity constant, depending on the time period you want to look at, it accounts for about 7% to 10% of the rise in spending. cbos did an estimate of it and came up with 8 %. of all the things that we can actually quantify, to joe's point, of the things that we can try to quantify, it is an important contributors. about a third of the growth of medicare spending is linked to cardiovascular conditions that are lifestyle related, diabetes, arthritis, kidney disease, hypertension and mental disorders.

the things that are interesting about those conditions in the medicare program is those are largely conditions that are ambulatory treated with appropriate medication. unless you botch it up somehow, with the exception of kidney disease, you really have nothing do with inpatient hospitals here. this is dealing with am latory care, primary care, medication management. the ultimate irony of that is traditional fee for service medicare is really the only major payor, unless you're home bound, that has no care coordination. so it just doesn't do it. we'll tell you you've got a problem in your personalized care plan but we don't have anything available to engage people in medicare to help them deal with these conditions. as i've mentioned, the share of

spending increase leaninged to disease prevalence does differ over the period period you're looking at. over the last couple of years, spending per treated case is a more important place but if you go back and look at the long-term trends, it's disease prevalence increases that are driving it. if you try to drill down a little bit more and say, well, we f we can look at treatment intensity, meaning how much are we spending to treat a particular case of diabetes or heart disease over time and how much of it is just due to increases in obesity, again, holding technology constant, as i mentioned about 7% to 9% is due to obesity alone and if you look at the 1987 to 2001 time period, about a quarter of the

growth in spending is due to increases in the intensity of treatment. of how we're engaging and working with patients. now, some of that is due to changes in technology, clinical threshol thresholds for treatment, clinical judgment of how aggressive we should be on treatment. if you look at obesity and treatment intensity, anywhere from 20% to 30% of the growth is linked to both of those two combined. so what are sot of the challenges here? that we face? we know that any given year that obese adults spend about 40% more in health care and depending on there's a whole range of different estimate of how much is in the base of spending linked to obesity. the last piece i saw was certainly around 20s are 21% is

due to obesity alone in the base of health care spending. as a productivity component we spend a lot of time focusing on the health care piece but if you look at the total kors every dollar we spend on the dollar side, we're losing productivity. >> let me go back to my medicare alcohol ng and look at life time health care expenditures and if you compare the lifetime spending of an obese adult versus a normal weight adult, anywhere from 20% to 40% more spending over the course of a lifetime at age 65 on medicare. so the point is is that this is a very different story than

smoking. smoking is a mortality discussion, this is a morbidity discussion, that there's not really the huge differential mortality rates linked to obesity. steems to me if you think about medicare, there's two opportunities that i think are important. one is to find ways to change the incoming health profile of people coming into the program because there are long-term potential savings with a healthier population coming in at the age of 65. i'm sure melanie with l talk about this, they're doing a great job of trying to build in more coordination, think about the opportunities of putting into place care coordination inventions. i think in programs like medicare, they enorm as you. medicare is going to spend

roughly $ billions on and the frustration is that we actually have interventions that are effective. we have a program that eric holman has developed out of university of colorado denver that has several randomized trials that shows we can cut readmission rates by 50% to 60%, we have a more advanced nurse practitioner model that comes up with similar results. that should be a major component that is -- i think there's opportunities here but we have to focus on it would have the problems we can actually do something about. one is preventing and alerts disease in the first planned lot

to have a discuss and, second ssh to really build into programs look medicare evidence-based components and care coordination that we basically have decades worth of randomized trials that show that they work. things like transitional care, medication management therapy management, health coaching. so we know the elements that are effective. i think we just need to find ways to integrate them and build them into medicare. so with that i'll keep this short and i really look forward to the discussion. >> great. well, thanks to both of you. so we now have some time for clarifying questions if people want to ask questions specifically of ken or joe to draw them out on points they made. we don't want to get into a lot of deep analysis of what they said at this point or debate,

but just again clarifying questions. if you do have a question, please introduce yourself briefly by name and affiliation and be sure to switch on your mic. let my me take a quick look around. i'll take the moderator's prerogative to ask one to you, joe. if i look or at your slide "high cost of technology" and i look at current technology, i see surgery robot and treated constituent, both of which recent studies have shown do not materially produce better outcomes for patients. and, in fact, with respect to the treated accident constituenconstituent

johnson&johnson stopped making them. that underscores that we have technology that does not produce better results but costs more or could be harmful. the institutes of medical tell us about half of the efforts we engage in, there's no proof that they work at all. i was curious why you didn't put more emphasis as some -- i want to make the somewhat counter point that what we're going to focus on is in fact the treated stent and actually less so the surmgry robot, since that's such a great marketing tool for big hospitals and people want to believe that somehow putting a machine between the surgeon and their body is necessarily an improvement. they really would like an improvement there because they

think they could be seriously harmed or killed. but, you know, the fact is that we do have a tendency especially on stents, for example, smaller things, we do have a tendency to look at them. for one reason it's easier to examine the effect of the stent because it is a purpose. it doesn't have multiple purposes. it is less dependent on the skill of the physician to place it for example. there's some skill involved but it's somewhat more singular product that is more amenable to testing. that i think is maybe the point i'm trying to make, that we have a tendency to examine the things that are easy to examine and not the things that are really hard to figure out. and the hardest thing to figure out are the things that are standard practice. so there's some hope for

technology assessment. there's -- in my view there isn't much hope in going from assessment to sound medicare policy, but there could be plenty of hope going from good technology assessment to good professional standards. >> kent, quick question for you. you have used the phrase "treated prevalence" here a lot, suggesting that you're distinguishing between just prevalence and treated prevalence, obviously, we treat people. can you dissegregate those two pieces? for example, potentially possible, we're giving statins to a lot of people for high cholesterol and there's debate whether that is the correct set of interventions. how much of this is treatment independent of actual prevalence versus treated prevalence?

>> i'm confused. >> i'm getting hammered. >> it's not even happy hour. >> are you sensitive about these hard issues? >> well, the phrase for me, treated prevalence is to distinguish the fact that we really are only engaging a fraction of patients that have different conditions. go back to my diabetes example, 28% of people that live with diabetes have not been diagnosed and don't have a medical intervention. so at some point hopefully they will. but at any point in time, they're not. so that's the distinction. the other part of is it, you know, is an important issue. i tried to distinguish in this discussion that there are components of prevalence that we could intervene and do something

about aand we want to, issues around obesity, diabetes and lifestyle, things like diabetes we can reverse the curve on. other components, go back to my slide, look at treatment of cholesterol are hypertension, that are you know a medical call that says, if we are more aggressive at treating those diseases, plus we have the new technologies to do it, that it does produce better value, that we're reducing cardiovascular mortality, improving the quality of life and so on. i think some of the stuff that david cutler and others have done looking at the impact, hyper tensives and cholesterol are good investments. but those are part of the discussion here, is that we have changed and made a medical decisions and treatment decisions that say if we're more

aggressive at treating certain types of cardiovascular risk factors, that they do pay off. >> yes, brad. >> brad stewart, we're building systems of care coordination for seniors. my question to you is, i'm a primary care doc for a third of a century and research as well, all of our discussion -- and i'm coming from a provider place -- is focused on the providers. what about preference of patients, particularly seniors who are in this near-end of life population where our data is showing now that they would prefer not to be patients they would like to be comfortable and stable and safe at home, and i think we have systems to begin to do that. but my question around the data

is, we have a lot of studies now on effectiveness, in other words, is the treatment necessary and valuable? what kind of data do we have on preference where we know -- we begin to know whether these treatments are actually wanted or unwanted which, to me, is much less controversial than trying to decide what's necessary. you often can't know what's necessary until after you do it and it hasn't worked. it's not controversial to know that people really don't want this stuff and as it turns out, many of them don't. >> that's a -- that's a great question. you know, as i think about these different models of primary care and care coordination, and to your point about take palliative care and giving people options and decisions about the type of care, how aggressive they want care to be toward the end of their life, lord knows i don't want to bring up death panels,

but yo know, that's a legitimate discussion that needs to be built into the coding of medicare, needs to be part and parcel of how families and patients and health care providers talk about options. and you know, i think that's a classic example of working with patients to give them options and give them information and have the time to be able to have the time to from a physician's standpoint to talk about that, is important. and we're -- you know i've seen more and more interesting palliative care models k s comeo place. hospice, again, another important component of that. but having the time to have that discussion in a fee for service system is a real problem. i mean it's just not built into the coding. it's not built into the amount of time physicians spend on counseling with patients on important decisions like that and it should be built into how

we think about doing care coordination and primary care with patients to give them options, and then have options out there available. another example on the other side of this, if you think about to me the incompleteness of the medicare wellness benefit, we built in a welcome to medicare physical, we're going to do app personal care plan that says you're overweight and diabetic but we don't cover anything to do anything about it. there are programs like the diabetes prevention program that the ys and united health group have put into place that we shown in randomized trials, including community-based randomized trials they generate a 5% to 7:00% weight loss. that should be an option, built-in to the medicare program that would give people a choice of, geez, if i want to make a difference in terms of changing you know lifestyle or improving my blood sugar levels, that

should be a component of what medicare covers. on both extremes we don't give people a whole lot of options because of the way that medicare coverage policy works. >> rick smith. >> hi, rick smith. ken you have references several initiatives around the cluster of chronic conditions that you identified as significant cost drivers. can you speak a little bit to what happens to utization and outcomes as these interventions take place and, you know, how does care change and what is that ultimate will add up to? >> it's a good question. you can look at the -- look at the prevalence data in terms of how we're treating patients with cardiovascular risk factors and the important questions, what

are we getting from it? is it worth it? i referenced david's work on in this and others, i think on balance the more aggressive of treatment of patients with cardiovascular disease is worth it. we're getting improvement in longevity, improvements in the quality of life, that those are investments that not only are clinically driven but generating better outcomes, so that those are sort of parsing my prevalence increases into two components, things that are good increases, things that we want, you know, make investments in, should be happy about, that would be a series of them that we've done on statins and cholesterol and there's a series of prevalence increases that are bad that we should try to do something to reduce our incident increases linked to lifestyle and diet and exercise and smoking like, diabetes. there are different -- there are different issues how we think about them i think are very

different. >> let's see, tom miller. is your head up there? we'll come back to mary ellen. tom miller, a.i. we've gotten good and clever coming up with new names to call chronic conditions, got a code, we can find a technology and bill to throw at it. you have a list of the ones that have had greater treated prefb lens. when you do your time series, what have we had any reduction in, in term of treated prevalence? what's gone off the list. great savings in smallpox. is it an added key to the keyboard? >> that's a good question. we've probroken these into i gu we have 260 that we've looked at, and i'd say most of them are fairly constant. i mean, obviously big ones like heart disease and cancer are getting improvements in. the one that has been the biggest d