store. once a month, c-span's local consent vehicles explore the history and literary life of cities across america. this weekend from wichita, kansas, on c-span2 and c-span3. well, i believe in every book i write, go there. that's the first law that i have. go to green bay to find out what it's like in the winter when vince lombardi is coaching there. go live in hope, arkansas and hot springs and find out what it was like for bill clinton. i'd never been to vietnam before. how could i write about it without going to the battlefield? i will to go. >> in his book, "they marched into sunlight" two major turn g ing points in vietnam. one in vietnam, one in the u.s. over the past four years he's been traveling and researching his newest book "barack obama: the story." recounting his latest world journey and take phone calls.

sunday, june 17th. writing is a transaction the process. writing assumes reading. it goes back to that question about, you know, a tree falling in the forest, if there's no one there to hear it. you know, if you've written a really wonderful novel, then one of the parts of the process is that you want readers to be enlarpged and enriched by it, and you have to pull on everything at your disposal to do that. >> author and pulitzer prize winning columnist anna quinlan will talk about perspectives on writing and life and the politics that make it happen. live sunday on "in depthth" her late ef rumination on life is lots of candles, plenty of cake, ready for your calls, tweets and e-mails starting at noon eastern on book tv's "in-depth" on c-span2. the alliance for health reform if yesterday seambled several panels of experts to discuss rising health care costs and high-tech medical

procedures. they also talked about chronic disease and efforts to move away from a medical system where doctors are paid for each service they provide. the alliance described itself as a non-partisan group that doesn't lobby in legislation. founded in 1991 by democratic senator jay rockefeller of west virginia. >> i'm with the alliance for health reform. first of all, the word from senator rockefeller, bob graham and rest of our board of directors, but a word of thanks for everybody who began their post-holiday work periods, per say here in washington, developing into one of the toughest and naughtiest problems that health care faces, which, of course, is health care costs. and we're going to talk today about two of the most prominent aspects of that. that is, chronic care for chronic conditions, and the role

of technology in health care costs. i want to thank, first of all, our friends at the kaiser family foundation, diane roland and her colleagues for not only helping to support and sponsor this series, but offering us this wonderful facility in which to have the discussion. you'll notice that we've configured the seats, those of you who were here for the first of this three briefing series, in a way that we hope will encourage everyone around the table, and i see a lot of eluft tr illustrious faces around the table to get into the conversation and we've reserved a fair amount of time for that to happen. so don't be bashful. i don't see anyone around here who would usually be characterized that way, so we will look forward to contributions from everybody sitting around the square. thanks, also, to everyone whose

logo and name appears on the screens above you. we have had broad and very gratifying support from a 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. finally, let me reiterate our thanks to our informal advisory board, chaired by john rather, from the national commission coalition on health care. who is also a member of our board. there is a sheet describes those folks in your materials, and each of them played a big role in shaping the series itself of the content and the format in a

way we hope will make this whole thing a very productive exercise. we're pleased and actually quite fortunate to have guiding us through this entire series susan dentzer of health affairs, whom 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 that everybody gets a chance to make the contribution that they're capable of doing. susan, let me turn it over to you, and have a great discussion. >> thank you very much, ed. and good morning to all of you and welcome back to work. those of you who were at our first session will know that when we open up a conversation about health care costs, it's very difficult to confine that conversation to a couple of discreet contributors to health care costs.

we try valiantly to do that in the first session and failed, i should say, miserably. 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 tend to exist in discreet silos. they very much interact with each other, but once again today we're going to try to stay on a couple of discreet contributors to health care spending and health care costs to the degree question do that, and as you know, as ed said today, we're going to be talking about technology and chronic conditions as drivers. 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 health care cost, and spending, 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 continunterveen other needs. so what we will here this tension throughout today as we discuss some of the 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 thorpe from emory to speak respectively about the roles of technology and chronic conditions, and joe, we're very happy to have joe here wir 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 and, 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 into ken's presentation. joe, all yours. >> thank you. what we aim at -- ooh. okay. all right. there we are. so i promise to stay on the subject for -- oh, sorry. 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 personally everybody -- what's that? oh. [ laughter ] i'll be getting to that in just

a second. so rick has already taken me off of technology and on to my favorite topic, but you know, marcus welby, instrument he's using was proeblg the best 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 available since the greeks and basically nothing else. a thermometer, too. okay. 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 a proton beamed therapy chamber. it's somewhat controversial, but one thing you can be sure about is, it's expensive. and so you know, it's always interesting to note how these things work. so here's a nice schematic and you can see that there are

various gantrys to treat persons and we know the cyclotron, but we know that is not true. the real source is money. if we didn't have this demand to this kind of technology we wouldn't spend the money. it's the mrn thoney that drives system. whew. i'm glad i got past technology to talk about economics. seriously, back to technology in a minute, but that's the point. as susan said, the various sources of health care costs 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 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, 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 now. what i can't tell you for sure is whether this is in price adjusted term, but it probably

doesn't matter. i think the impression is, undoubtedly correct. the -- but when people talk about technology, they usually think about pieces of equipment. of course, it's not just pieces of equipment. it's essentially everything that a doctor does. i mentioned drugs. obviously that's part of technology. and equipment is part of technology. not just the equipment that is you know, in the hospital up against a wall, some big thing, but also the little things. the stethoscopes work a lot better these days to pick on the thing that i mentioned that marcus welby had. but, also, it's medical technique, and i think that's part of technology, too. it's knowing how to do something, even if the basic materials are the same as they were 20 years, but you now know how to do it. that is an advance 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 economist at heart, but technology, you'll see these studies that try to parse out how much of cost growth is accountable by various kinds of factors? including technology, and technology is that -- it's that one thing that can't be directly measured, although i would argue that the other factors that people usually point to are really not that measurable either, but everybody admits technology is not directly measurable. so technology is usually treated as a residual. it's not technology, it's the "i don't know" factor. 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 susan said, technology alone is not the culprit. it's everything. but in the end, if there wasn't money to buy it and if people didn't want it and if doctors weren't prepared to do it, then that piece of technology wouldn't be used. so it's more complicated than, i think, most studies are capable -- most empirical studies are capable of dealing with. okay. so when you have better technology, you generally have better care. not uniformly, but over the vast span of time, we see this to be the case, and my example is cataract surgery. there is evidence that a crude form of cataract surgery that was literally somebody sticking a, putting a stick in your eye, was practiced sometime in the babylonian era.

but more concrete evidence, there is some evidence in the 16th century of something old couch which is essentially sticking a fancy stick in your eye. that didn't work too well. probably wasn't used very often and, of course, there wasn't anesthesia and that time, so you had to really want to do it. in the '60s, you know, there's hundreds of years later, vast improvement. in in-patient operation. we learned something about infection. so in the '60s we were far more capable of dealing with infection. that was a technological improvement, but it was risky. this was the kind of thing, you used a sharp knife. probably sharper than you're likely to find on the streets of washington any evening. probably a little smaller, but it's the same basic principle. and 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 hl one operation. and the idea was to extract the lens, and amp the operation, which was highly risky, they sewed things up and then the patient was held in the hospital room for at least two weeks with sandbags so they wouldn't move. very uncomfortable. not so many 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 that long ago. so then we prove to today, and i'm not sure when today started. probably sometime in the last 15 to 20 years. we have a much more sophisticated procedure. people, doctors are looking through microscopes to make sure they are cutting exactly in the right platece. using a more sophisticated procedure to take care of the lens. they replace the lens with something that makes you see

better than you ever saw in your life and even better, they pick you up, you're a medicare patient, which only the unfortunate few don't make it to medicare before this happens, were ut if you are a medicare patient, pick you up, give you lunch, zopp oap out an eye, twos later, do the same thing to the other eye. the fact is, technology is consistent with more successful results and if you have something that works better, you generate greater demands and, of course, although the price might be lower on a per-patient case, you generally generate more spending. itship in guaranteed, by the way, the price will be lower because of the weird way that we price things, which was certainly, not all that well explained the last time, but i'm going to claim that it was. okay. over-use, under-use, misuse. the terms everybody used, and a great example has to do with

treating coronary disease from a paper by amatab and john skinner in a classified actually using an understud fri somebody else, they classified different kinds of treatments according to their cost effectiveness and their cost. and you can see that 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 hatch of the mortality decline, due to coronary disease between 1980 and 2000, and, voshs, they den have the gouuts that anything w less cost effective, but less cost effective and probably there wasn't anything that wasn't effective in a sense, and the word "cost" is probably an

issue here, were ut you can see that according to their characterization, the more aggressive treatments, stents, cabbages, cardiac rehab, are 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 a display, because you have to? yourself something that they didn't ask themselves in the paper which is, what was the condition of the patient? somebody who really needed a cabbage, you could shove an awful lot of aspirin in their mouth on their way to the morgue. so it's not at all clear. this is in fact a kind of residual study. it's not very reliable either, but it does say something about our use of services, and it does imply something about the economic incentives associated with the complicated things.

aspirin? who makes money off of that? not even the drug companies. cabbages, who makes money off of that? you know who they are. so 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. baup the fact is because the fact is we want all of those things and i'm still sore at rick because he hasn't given meep the drug that's really going to help me, but i'll give you until 2:00. okay. so -- what about evidence? can we find out about evidence? okay. so here's a study from elliott fisher, looking at regional variations in medical spending, and this is in the -- this is an ins d d index calmaled the end of life. medical patients at the end of

their life. i didn't readed article to know how close to the end of life they were, bust you knew they were so pretty close. 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 those -- i mean, there's plenty of money in those fancy machines. don't get me wrong. but where's where is the real through put? ordinary interventions we're all used to and expect. that's where the money is. okay. so, well, everybody says, well, let's do effective research and figure out what we really should be doing and don't do the things we shouldn't be doing.

and 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 ka cory and 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 kwep question it, such as the on and off discussion as the blood test for prostate disease, we get a lot of resistance, because, that's not the way go it. so, you know, is effectiveness the way it's going go? the reason is, of course, it's probably more than 90% that we're nerve are going to look at. that 10% or whatever the percentage is, is the small part. it's the glamorous part, and, in

fact, the part that's already heavy lif regulated. it tends to be drugs and devices first. everything else last, and that doesn't strike me looking at the previous chart as being the exactly intelligent way to allocate resources, if you're going to really look at effectiveness research. even worse, this wasn't supposed to be a diatribe but i've always been skeptical. these are highly refined studies and so on. soap it in at all clear that they necessarily tell what you would really happen to the average patient in the average setting, and that's a problem. that's what you really want to nope the answer to. is it going to work most of the time rather than under ideal conditions? or is it not going to work? because things that would work under ideal conditions might well not work under norm many conditions. normal conditions. let's not forget about the patient. the patient might not be adherent either. finally, there's the moving

professional judgment changes all the time. why? baup there are changes in the way do you things. partly it's that our experience grows. we see more patients. that experience is accumulated, not necessarily systemically, but it is, and our views, our professional views about what to do changes all the time. so i think effectiveness research is interesting. it's going to make a lot of people a lot of money. i don't theyy got to have any substantial impact how we spend the money. can't we actually spend our 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. yes, they do pay for it, of course. they pay 100% for it but they don't know. therapy paying through indirect means. when they go to their doctor, their doctor can't tell how much it will cost them because the doctor doesn't know what he's going to get paid. it's all avail and this brings us back to p & q but that's where it's we have to focus our attention and we also focus our

attention, of course, on better information, but if you don't know the price you don't know much of anything and as i said in the previous slide, knowing it clinical effectiveness doesn't get you half way to knowing whether that's something i want. because what you want to know is value. so there are lots of things we do-of-could do. the medicare program tried lots of thing and haven't been very successful. they haven't been very successful because it not a health program. it does r is a political program and political programs can not make decision ps then try, but they can't. i was tied up with the centers of excellence project. it was a great project that worked perfectly then it was shelved. coverage without development another example. seemed like a good idea at the tile. the hard part wasn't setting it up to phase in coverage for something that may or may not work. the hard part is phasing it out. so what else could you do?

well, conservatives talked an awful lot about financial incentives and this is a case we need to apply for financial incentive, to the whole system. so i won't get into it, but fit sensible pay for service reform and medicare and premium is a prompt could take us a long, long way. private insurance i think is the more likely place where you're going to see action in a lot of these lines. following 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 somebody progress in making hard decisions and trying to make them stick. now, i've got to say i haven't seen much evidence of that, but as economic conditions tighten, as business conditions tighten, as the resistance of employers to higher premiums thereby necessitating to keep premiums not so high, necessitating higher and higher deductibles and co-payments i think we're going to see that begin to turn

around and i think we are begin tock see that turn around among some insurers. one theory that actual lly chana advances, why don't we attach differential co-payments to measures of effectiveness? and that sounds like a great idea, until you ask yourself, can you really trust those measures of effectiveness? my answer was, no, not really. i think it's to individualistic, but, sure, the idea of value-based insurance design is a sound one and it's being tried but won't be tried in the medicare program. providers, driving a lot of things. great to see this group of specialty societies recently put out under the banner choosing wisely, a list of things that they strongly urge their practitioners to reconsider, whether they were in need to do those things. that's a good idea. 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 found them yet. what about consumers? in the end, once 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 and buy it and i'd be paying for it with my own money, chances are, and be delighted to do it. so what i'd like to know, what all consumers would like to know, no just what is it going to cost me? a question barely answered today, but also what, how is it likely to affect me? and that's really hard to get an an answer to, and that is really the key to understanding how technology works, and then finally, what about expectations? i left that here for consumers, because in the end we don't change your views about what we demand as an absolute minimum, and, rick, i want to assure you, it's complete cure immediately, but until we get realistic about those sorts of things we will not get control over cost.

thank you. >> all right. thank you very much, joe. so as joe said, technology adds to both supply and demand, and one of the things that we know we have and unended supply of right now are patients with chronic disease. so, ken, over to you to talk about that. >> okay. first of all, thanks for inviting plea. a pleasure to be on the 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. as susan mentioned i'm going to talk about another angle of this, not really unrelated to what joe's talked about as you'll see in a minute. it always fattenat a