AcademyHealth
                  25th Annual Research Meeting
    Reflections on the Field of HSR: Where We've Been     &   What
                  Questions We Left Unanswered
                          June 9, 2008


     Uwe E. Reinhardt:   All right.    Why do we not get started?

This is the 25th anniversary, of course, of AcademyHealth, the

former AHSR, and we have this session on "Reflections on the

Field of Health Services Research: Where We've Been and What

Questions We Left Unanswered".     And that, of course, will be

done in two sessions.    First of all - the old guards, so to

speak - those of us, who when we entered the field, there was

not that much a field.   There certainly was not an AHSR, and

there was not that much health services research.      Certainly,

it was almost none in economics.      So the panelists, we have

Stuart Altman of Brandeis; Ron Andersen, University of

California, L.A.; Bob Brook, RAND Corporation; Karen Davis, the

Commonwealth Fund; and Joe Newhouse, Harvard.

     I'm Uwe Reinhardt, and I moderate this thing.

     In those days, when I started, people often ask me, "How

did you become a health economist?"     And it was, actually,

because I was told to be one.    I wanted to write on a far more

interesting topic, and it was "Optimal Tolls on the Connecticut

Turnpike."   And I already sank a half a year's reading into it

because I was always bothered -- when it came out of New York



                                 1
at midnight, I had to pay tolls when there was no congestion,

and that offends an economist.     And to me, that was a serious

topic, but Richard Ruggles, whom some of you may remember,

said, "It is the most ridiculous thing I ever heard.        Six years

of college and that is all you can think of."        So I asked him,

"What interests you?"     He said, "Health," and I said, "All

right.     I will write in health, I do not care."     So I went and

read some more and wrote a thesis on what the practice of

physicians had to do with workforce forecasting.        Everyone said

we had a shortage, and I came out - you have to be opposed, of

course - saying we did not, and I had nice equation to show

that.

        Now, I view health services research as, basically, an

attempt to limit the folklore and lies on which health policy

is made, and we have done that, I think, quite successfully.

For example, when we started out in our field, the health

economics, people really believed the demand for health care is

totally price inelastic.     Certainly, people go to the hospital

or not could not have anything to do with price.       Well, I think

Joe Newhouse's work shot that one out of the water very

quickly.     There was the theory that every time you take a

dollar of health care out of health care, quality of care will

fall.    And I think that is being completely demolished




                                  2
initially by Jack Wennberg, but then Bob Brook went far more

beneath the Wennberg data and looked at it.

        There was the theory that there could not be a quality

problem in the United States because we were the best health

system in the world.        I think Karen Davis' recent work has

pretty much killed that idea.        We believe that there is an

optimal physician population ratio.         We destroyed that idea.

So there was a thought every American had access to good health

care.    Well, Ron Andersen and his colleagues destroyed that

idea, and there are many of you out there, our vintage - Mitch

Greenlick; I see, Dorothy Rice; Clif Gaus           we did quite a bit

of work that actually did limit the range of folklore.         It is a

little bit like legal cases.        They have precedents; we have

papers and data.     And I think it does improve the policy

process, although there is still a lot of faith-based analysis

as in recent years we have particularly seen.

        Now, my first panelist is Stu Altman, who got his - what

did you say - PhD in a Chicago farm school called UCLA.         In

economics, that was then the Chicago farm school.         He is the

Sol Chaikin Professor of National Health Policy, was the dean

of the Heller School from '77 to '93.         I thought you still

were.

        Stuart H. Altman:     I am again.




                                     3
       Uwe E. Reinhardt:     I think -- yes.    So it never ends with

him.    He just does not get paid for it now.       He was president

of Brandeis when I became a major Jewish philanthropist,

remember?

       Stuart H. Altman:     Yes, I do.

       Uwe E. Reinhardt:     He was the chair of the politburo

called ProPac, the Prospective Payment Assessment Committee

that introduced Soviet pricing in America; on the Clinton

transition health team; a great friend of [indiscernible], who

fired him the minute he looked at him.         And so Stuart was

instrumental in keeping me in health economics.         We met in

Detroit in some defunct coffee shop, and I was going to quit

and go into finance.       I thought more of a future there, and I

realized it would have been -- you can actually sell garbage

and get paid for it.       But Stuart told me to stay, and how could

I not when he told me that.       And he has been very helpful to me

when you are in a little rural economy.         I live in rural New

Jersey.     We do not really keep up with what is happening.        And

I can tell what is happening, and I showed that to you a couple

of years ago when we got the prize from AcademyHealth.         And

people pleaded to see those pictures again - I'll show you -

how you can tell what is happening.

       This is '70s, the era of regulation when Stu dressed like

this, like a communist commissar.         He regulated everything in


                                     4
sight.   If it moved, he would regulate it.    Price controls,

ProPac - that was his life.   Then came Ronald Reagan, and Stu

retooled, and he became like a snake oil salesman, looking,

selling pro-competition as the new approach.     And then he heard

of consumer-directed health care, and that is him now, totally

wired into the latest data on where to get cheap, cost-

effective health care.   So with that splendid introduction, I

turn it over to Stu Altman.

     Today, by the way, he wears his bar mitzvah suit, which

means he is in a holding pattern.     We do not know what is

happening.

     Stuart H. Altman:   I left my hat home.    So the moral of

the story is that you cannot be a successful entrepreneur in

health services research unless you have a hat.     So feel free

to get your own hat.

     So I'm glad Uwe told you the truth because it is.        The

story he did tell at the end was true.     He had given up.     He

did his dissertation on health care, and we met in Detroit.          I

think there was a group of the early health economists that

really set the stage, Herb Klarman, and even though Paul

Feldstein is not much older than we are, he was much earlier.

But it was a very small, little group, and I do not know if

everybody remembers "The Graduate".     Remember plastics?




                                5
        Well, my background is similar to Uwe's.   We were trained

in economics.     There was no such thing as health care

economics.     I have always had an interest in women.     I have

three daughters, five granddaughters.       I have female guppies.

And so I wrote my dissertation on unemployed married women, and

that made me uniquely qualified to go into the Pentagon to

create a -- I anticipated the fact that the military now has a

lot of women in it, and so I got there and -- economists, in

the '60s was a wonderful time.     All of a sudden, this town

thought, "Oh, my God.     We need to understand economics," and

there was this great war on poverty and the OEO and the

Pentagon.     And then, all my friends went over to what was then

HEW and I went to play academics for a while at Brown.

        And I was there about - I do not know - six months, and

they called me up and said, "I have a problem with nurses.          You

know about women in labor force.       Why do you not come and help

us?"     I knew absolutely nothing about nurses.    I knew nothing

about health care, but it turns out economists, next to

surgeons, are the most arrogant people you are ever going to

meet.     We can do anything, and for those of you who were

trained in economics, you know what I'm talking about.

        So I went down, and being a good academic, I said, "Well,

I need a grant to do this."     So I got money, and I eventually

wrote a book on nursing.     And that got me into health care, but


                                   6
then I ran into his young guy.    It turns out we are a month

apart in age, and we compared our childhood.       And he was

hunkered down in the middle of Germany, and I was hunkered down

in the middle of the Bronx.   And our lives have been the same

ever since.   Anyway, we met and he said, "This health care

stuff, there is no future in it."       So I said, "Health care -

this is going to be the field."       And there were two people that

I feel the most proud of convincing to come into our field.

And one is Uwe, and the other is Gail Walinsky, who was my

almost next door at the Urban Institute.      And she was into

welfare economics, and I said health care.

     And so now, of course, we have this wonderful field that

you are all part of, and for those of us who helped start this

organization, it cannot bring but really warm, good feelings.

It is a group that has prospered and grown and not only in

terms of numbers but in terms of influence.       As a matter of

fact, it has gotten to the point that I get a little worried.

The good news is that no -- since I live in the world that

transcends research and policy so much in my life, I like to

think of myself like a bee.   I go back and suck up the honey of

all the smarts that are in this room and in this meeting.        And

then I go to the Hill and around any place that will listen,

and I give them the little words of wisdom.




                                  7
     The good news is that health policy cannot and does not

function without a whole research aura around it.       The problem

is that every side is well surrounded by research, and

sometimes, I think we do ourselves a disservice in the sense

that we are - I do not know if it is intentional or

unintentional - on every side of every issue.       I do not care

what piece of legislation is up there, but it is surrounded by

some level of research.   Now, how good the research is and

where it comes from is up for grabs.

     One of the things that I said yesterday at our meeting of

the founders of this organization is that what is so important

is that this organization, AcademyHealth, while it strives for

decent funding and for decent standards, must maintain the

quality of the product.   I do not know how we do it, but we

need to stand for things that say standards mean something;

quality, in terms of research, means something.      We are busy

criticizing the health care community for its lack of quality.

We criticize it for using too many services.      We criticize it

for not covering the uninsured.       But we should criticize

ourselves in terms of some of the research findings that find

their way into the policy arena that are less than -- let's say

they are not always complete, if not false.

     So as I think about where we were, there is no question -­

I go back.   And this is a long story I do not tell sober, but


                                  8
there I was, the good kid from the Bronx in the middle of the

Nixon administration - and many of you remember, I had the job

of -- for those of you who have great desire to have the

federal government run the health care system, I'm living proof

on why you should be nervous because there I was in 1971 as the

chief health policy person for this country.    And if it was not

for Clif Gaus and Dorothy Rice, I had to write on my sleeve the

difference between Medicare and Medicaid.     And then my sleeve

would get dirty, and I would screw them up.     So they would come

and help me out.

     But the point was that I did find myself in the middle of

a health policy debate.   We were debating something that you

probably never heard of like national health insurance.     In

1971, we almost passed that, actually, and we were very

concerned about rising health care cost.    And I was told by the

powers in the White House that if America had eight percent of

GDP, our whole health care system was not going to die, and so

I went out to regulate health care cost.    And for those of you

who enjoy the trappings or the droppings from the health care

system, you should be very proud of the fact that I failed

personally, from eight percent to 16 1/2.

     But the point was that we were sitting there in the

beginning of the 1970s with really no information whatsoever,

and I remember we were debating this issue, as Uwe said - what


                                9
is the elasticity of demand?    And we actually spent $100

million and made this young health economist from Harvard into

a household name.   The idea that we would spend $100 million on

a number that we all knew before we started this study -- so I

almost apologized because I realized that economists are really

not allowed to talk about quality of care.     It is not in our

union contract, and physicians get very mad.     So I said, "While

we are spending $100 million on it, should we not know a little

about the quality of care?"    And I said to Joe, "I want to

approve the continuation of--" - remember this one, Joe?       I

want this to go on because for some reason, it wound up in my

office.

     The people above me did not know anything about research,

and I made believe I did.     And I said, "I want it to go on, but

we need to justify it a little more than just what the

elasticity of demand is.    You think you could learn and maybe

put some things in the RAND experiment that would look at

quality of care?"   He said, "Well, we have this young,

aggressive, energetic physician who thinks he knows about

quality of care, and I'll bring him at the next meeting," and

that is how I met Bob Brook.    And of course, Bob was a nobody

then, and of course, now, look at him [sounds like].      So we are

very fortunate that health services research got that shot.        I

wish we could get it today.


                                  10
     So the point here I'm going to finish is that we have made

tremendous strides.     Health service research is not taken for

granted.    It is not a back order section anymore.    It is not

appropriately funded, of course, but it is much better funded

than it was then.     But we do need to guard against allowing our

research findings to be used in inappropriate ways, and David

and AcademyHealth need to maintain those standards as we go

forward because our -- unfortunately, the problems we face

today are the same problems we faced then.     We still have a

system which, of course, we know, does not cover nearly enough

people.    The numbers grow too fast.   Our health care cost

could, in fact, lead to a meltdown in our system.     And now, we

have created a third problem, which we did not think we had in

the '70s, and that is, that we do have quality problems.       So

there were real problems out there for you to do research on,

but we do need to maintain our standards.     So let me thank you

all for making this such an exciting 25th anniversary for those

of us who got this organization started, and it is a pleasure

to be here.

     And I'm sorry I did not wear a hat.

     Uwe E. Reinhardt:     Thank you, Stu.   I should mention that

Stuart is the father of Altman's law, which is more lasting

than e=mc 2 will ever be, because that will be disproved someday.

But Altman's law is, in the United States, everyone's second


                                  11
best health reform plan is the status quo, and that will never

change.     They will change e=mc 2 long before that law.

     Our next panelist is Ron Andersen, who, again, needs,

basically, no introduction.     I think sociologists started to

work on health care earlier than economists did, because there

was this thought that health care was not amenable to economic

analysis.     Ron is the Fred W. and Pamela Wasserman Professor of

Health Services and Sociology at UCLA.        He got his PhD in

Sociology from Purdue University, and he has a huge CV and

many, many studies.     But the thing that comes to mind when you

hear Ron Andersen is studying access; really worrying about who

in America gets access to health care, on what terms, developed

a behavioral model of health services used, which is the

analytic framework he uses to study access and that, in our

days, we did not actually really know much about, and now we

know a whole lot about it.     And Ron is certainly the dean and

one of the leaders in that field.      Ron.

     Ronald M. Andersen:     There was a tradition related to

health services research before Academy and before many of our

distinguished economists got into the field.       We did have some

early economists - and I want to mention Dorothy Rice here -

but they were relatively few and far between.        On the other

hand, I was a doctoral student in, probably, the first formal

training program in medical sociology at Purdue.        It was funded


                                  12
by the National Heart Institute, so NIH was involved early on

before we think of it being so.        Under Dr. Eichhorn - Bob

Eichhorn there -- and I chose that program, not having a clear

concept of what medical sociology might be, but my adviser - I

went to Santa Clara University - had been an engineer at Purdue

before he became a sociologist, actually, at UCLA.        So he said

that was, for a straight semi-rule kid, this might be a good

place to go.

     The project at Purdue was associated with a study called

the Purdue Farm Cardiac study, and my dad had died of a massive

heart attack the year before.     So I thought maybe this would be

a good place to go.     And frankly, Purdue gave me the best offer

with a fellowship.     I got $200 a month; it was the best one in

the department.     And I also applied, ironically, to Chicago

where I ended up spending 28 years.        In UCLA where I have spent

18 years -- but they were not so enamored, and the offers were

not so good.    So that is how I ended up at Purdue.

     As I reached the dissertation stage at Purdue, there was a

project at the HIF at that time and NORC at the University of

Chicago.   They had a grant from NCHSR, now AHRQ, to do what was

the third in a series of National Studies of Medical Care Use

and Expenditures.     We did not have a lot of economists

involved, but we still tried to study medical care

expenditures.     They had no study director.     Odin Anderson was


                                  13
the research director at the center, and they were really

scratching for a study director.        There were not so many people

trained in doing health surveys, and it turned out that was a

major component of the training program in medical sociology at

Purdue.

        So Anderson talked to Eichhorn, looking for somebody to

run the project.     And I think Bob greatly exaggerated my skills

and certainly my experiences, but after some hard interviews

and discussions - and they had no alternatives - they offered

me the job.     And I thought I was a researcher, and I even

thought, maybe of health services research by then, that I was

going to researcher haven because here was Odin Anderson, who -

I had read about - was proposed as the "father of medical

sociology" and I believe the coiner of the phrase and the

initial concept of the health services system, and an array of

talented, well-known sociologists at NORC, including a Peter

Rossi, Jim Coleman, Jim Davis and Jack Feldman, who was the

methodologist for the series of national health studies at

NORC.

        So I took the job.   I took the job and went there, and I

worked for five years with these marvelous mentors, designing a

study, collecting the data and doing the analysis.        I had

experienced that project and was told, "You write the final

report, and then we will pay you to do your dissertation along


                                   14
with it."   And so we wrote the final report; Odin and I were

the authors.    It was published by the University of Chicago

Press in 1967, and it was called A Decade of Hea2th Services

because that was the third in the series of studies, "Trends

and Use and Expenditure".    And then I was struck when I got

into this project at the tremendous discrepancies in the use of

services across income and ethnic classes and also

discrepancies in health status as far as we could measure it.

And I was really troubled.    I did not understand why some

people seemed to have pretty good access and other people did

not.

       So for my dissertation, I tried to develop an approach to

better understand these discrepancies, and I completed this

dissertation, which was a behavioral model for health services,

in 1968.    And I have continued to work on issues of access and

versions of the behavioral model for my entire career.     The

initial model was not the first or only model of health

services developed at the time, but it was an early effort to

assist in understanding why families use services and to define

and measure equitable access and to assist in developing

policies to promote equitable access.

       Now, the behavioral model evolved over time.   Some people

still cite that '68 publication as if maybe I had been deceased

or had not done anything since, but I have wrested on and used


                                 15
the behavioral model all my life, but it has emerged somewhat.

Additions occurred in response to emerging issues in health

policy and health services delivery, an input from an array of

colleagues and students at both Chicago and UCLA and elsewhere.

     I want to stop just a moment to say something about

students and the importance of students and trainees.     I felt

sometimes overwhelmed in students, both at Chicago and at UCLA,

and complained about being inundated with those students.     But

the fact of the matter is I realize, in retrospect now, I

courted those students.    They were my colleagues.   They were my

resources.    And I used them, and I hope they used me.   That was

the kind of relationship it was, and that is the kind of

relationship that we need to have with our younger colleagues.

I think of these folks as they are always my students, but I

treat them the same way as I taught them as students, as

colleagues.    And that is the kind of interaction that, I think,

is important to bring along the young folks in the field today.

     So the model emerged in response to criticisms of early

versions and what was happening in the field.     So in phase two,

with colleagues at Chicago - I want to mention particularly

Luanne O'Day [phonetic] - we added to the model, the formal

concept of the health care system and its effect and also

satisfaction of consumers as an outcome of health services.

This was in the '70s.     In the '80s and '90s, we recognized, in


                                 16
addition to the use of health services, the importance of

personal health practices      such as diet and exercise and self-

care - that interact with the use of health services to

influence health outcomes.

     Phase four was in the '90s, and I tried to explicitly

recognize the dynamics and recursive nature of the health

services use model and emphasize not only that health services

use as well as the predisposing, enabling unique

characteristics of individuals influenced health outcomes, but

those outcomes, in turn, influenced patient needs and health

care utilization.     And the last phase in 2000's stresses the

fact that health services use is best understood by focusing

not only on those individual characteristics but cultural and

environmental factors as well, which are very, very important.

     Now, the fact that many of the problems of health and

health care disparities have remained through all of the phases

of the model and before, of course as well, may give us cause

to criticize the value of the studies and the models, seeking

to understand and improve equity, effectiveness and efficiency

of health services.     I prefer to emphasize the real progress in

access to care that we have made, and I suggest that we need to

redouble our efforts with new generations, some people

represented here now of health services researchers, to better

conceptualize and analyze health services utilization.     And the


                                  17
new generation has improved skills, creative ideas and, I

think, youthful enthusiasm, and there are good opportunities to

build on what has gone before and go much further to understand

and assist in reducing the major healthcare disparities we

still face.

        Thank you.

        Uwe E. Reinhardt:        Well, thank you very much, Ron.   By the

way, is Luanne here?        Luanne O'Day?

        Male Voice:     No, I think she --

        Uwe E. Reinhardt:        You had heard Stuart mention Bob Brook

who is well known to you as the dean of quality research on

health care.     When I first met him 25 years ago - I think i t

was around - he was very distressed, and he said, "The world

will go to hell in a hand basket soon."           And I bet you, if you

ask him today, he will still say that.           We know a lot more

about quality, but I think there is still a lot more to be

done.     Now, Bob got his medical degree and a doctor of science

from Johns Hopkins University.           Was your mentor Kier White

[phonetic]?

        Robert Brook:     Yes.

        Uwe E. Reinhardt:        I recall.   And he has devoted his life

since then, primarily - not totally but primarily - to research

on the quality of health care and of course, stimulated an

awful lot of further research and is a world-known figure in


                                        18
this field.     He is vice president of the RAND Corporation and

the director of the RAND Corporation's healthcare initiative.

He got the prestigious Gustav Lienhard Award in 2005.          And I

must say, some years ago -- I asked him this morning.          I was in

a peevish mood.     We had these very heavy meetings in the

evenings to give awards, and I gave Bob -- Alice Hersh almost

died.     It was not on the program, and she liked to have control

of stuff.     I gave him an award for the most distressed health

services researcher.       I remember i t was an expensive $20 wood

frame, and i t said, "[Latin words]."         It is Latin for "Shit

happens."     And i t was a bumper sticker our daughter had brought

from New Orleans.     And I thought that is what Bob had to learn.

Look, the world is never going to be perfect, and I think he

has cheered up in the meantime.          This morning, he was in a

euphoric mood.     I think he is going to, hopefully, not do a

number on me, but, Bob, please.

        Robert H. Brook:    I'm going to begin by saying we should

declare victory and that we have succeeded, and I really do

believe that the missing person here who made this all possible

is Alice Hersh.     And I do not mean from the standpoint of the

organization; I tend to mean from the standpoint of the field.

And we do not tend to reward people who are non-PhDs or MDs as

much as we should, and Alice really made this organization

function but really brought life to this field.          I would take a


                                    19
minute of silence, but Ron used up that minute, so I better go

on.   But I think we ought to declare victory.       Now, there is a

downside to that, which what I'm going to try to do in my few

minutes to suggest that we have to fundamentally change who we

are and that we no longer can go on doing what we have been

doing.

      And why I will say that we ought to declare victory is all

the things that we could not do.         If you go back to the 1996

reports in Milbank and read them - and all of you should as new

people, for those of you that are new in the field - of what

needed to be done.    And you look at what is in them, we have

done them all.    You can measure access.      You can measure

quality.    You can do surveys.     You can do econometrics.     You

even could do analyses that statisticians and economists do not

understand each other, what they are doing and never will.             We

have developed the methods.       We have developed the tools.    We

have done all of this kind of stuff.        There is not a lot left

to be done, except at the margin, so we know a tremendous

amount.    And therefore, we need to change what we are doing.

      And why I want to say this is -- I'm going to use a couple

of examples to show that.     The first study I ever did was a

study that John Williamson [phonetic] and Paul Sanosero

[phonetic] were the Pis on, and they had collected 25,000

critical incidences from people around the United States


                                    20
professors on what was good or bad about quality.    And the

first thing I learned is that professors never read raw data,

and so they wanted to hire medical students to actually read

and code these 25,000 sheets.    And the medical students that I

went with did not need money enough to actually want to do that

job, so I learned about economics at that moment.    And I coded

them all, and I was a second-year medical student.    And my

belief structure was that I did not know enough to do this, and

that these would be esoteric problems in quality.     I did not

know there are seven years of training left.    And what I found

out is that 99 percent of everything that was said was

something like, "I did not read the X-ray.     And the person had

a tumor and I did not get to i t for a year," or "I did not get

the potassium result back, and the patient died because I did

not take corrective action."    I did not need to open a single

medical textbook beyond a year to a medical student to read

these 25,000 incidents from presumably the best people in

medicine, and if I did the same thing today, i t would be the

exact same result today.

     Now, I want to spend a word talking about the health

insurance experiment because I want to distinguish facts from

values.   Joe Newhouse really does not get distressed very

often.    If I get distressed, Joe does not get distressed.    And

one day, Joe and I were trying to sell this health insurance


                                 21
experiment, and we flew to Dayton, Ohio, met with the Dayton

Medical Society.   And at the end of the meeting, we were

labeled communists.   We were the stalking horse for Kennedy

because if you did a health insurance experiment, that meant

you were going to have Stu Altman regulating the world, and

therefore, the bottom line is we were communists.     On those

days, you could have a luncheon meeting and then fly to

Seattle, and we were trying to get Group Health Cooperative of

Seattle to join in to this experiment.    And the two of us were

there again, and at that dinner meeting, we were labeled

communists, not communist-fascists.    And we were fascists

because instead of actually implementing health insurance, the

government was collecting data to find out how it would work,

and therefore, we were preventing people from getting health

care, and we must, therefore, be fascists.     So on the plane

back - and you could still fly back in one day - Joe consumed

more liquor on that plane than I had seen him ever consumed

before in his whole life.     And I want to distinguish facts from

values because I think that is one of the things that we have

to deal with in this field.

     So let me just go directly to some of these ideas that I

think.   We have a field right now that is consumed by

extraordinarily small studies that produce a lot of small data

that are not used to make a difference.     Somehow, if we are


                                  22
going to do small studies, the least we can do is coordinate

them.     And the least we can do is try to figure out a strategy

to make sure that as we design these studies, actually do them

in a way that actually builds them into something that is big

enough that might be used to make a difference.

        We have to deal with this whole question of work in the

area of rights versus responsibility.       There are not any

philosophers in this audience or any religious people in this

audience.     Somehow health services research has not included

them.    What is my right and what is my responsibility?     What is

researchable in that area?     Would the American people buy into

something that says that if I'm going to have health insurance

which is subsidized and the economists have taught me that that

means we are going to use more than we would use if we did not

have somebody else paying for it?      Do I have the responsibility

of actually producing data of saying that my data can be used

for the common good, whether that is to determine whether a

specific medical intervention works or whether that is to

determine whether a former financing is better than another

form of financing?     We spend most of the money in this field

eating rubber chicken dinners to try to convince people to do

the studies that we want them to do.       Most of the money goes

there.     Very little goes to analysis.




                                  23
     The next question is -- I bet if I asked your political

preference in this audience that 99.8 percent would be

Democrats, and therefore, the knee-jerk response of this

audience is to reject anything that a Republican proposes.

Somehow, we have to work on balancing this field of researchers

so that people who have different political philosophies

believe the facts, not the values but the facts.

     Third - there is now a new movement that is overtaking

this movement.    It is not so new, but i t is, at least, becoming

- more put together - better.    Instead of solving the problem

of how to deliver health care, there is now a group of people

that are talking about the determinants of health.      And we now

have two camps - one that is interested in the determinants of

health and one that is interested in improving the health care

system.    And what we are doing is shooting each other in the

foot so that neither of us wins.      These two models have to be

put together and integrated into something that makes more

sense.    All of this is stuff that we have not done.

     Implementation research - if we wanted to implement health

care policy tomorrow, we do not know how to do it.      If we

wanted to eliminate for-profit HMOs, how would we do it?        Would

we just throw everybody out of work?      How would we phase out

Medicare, phase in Medicaid or do whatever we want to do?        The

amount of implementation work that is actually done is so


                                 24
little that it is very, very hard to imagine a major change in

health policy in the United States because of the lack of

knowledge in this area.

        Now, I wanted to say two last things.   The first is, when

we reminisced around the board last night, to my somewhat

disquiet, I realized that a large number of my colleagues have

had serious medical illnesses in the last few years - a number

of heart attacks, a lot of stents, a number of these kinds of

things.     We published a study in the Annais of Inte=a2

Medicine a number of years ago that said that 40 percent of men

in the state of New York who underwent surgery for coronary

artery bypass surgery did not have the lesion that required

them to get the surgery, not because of any disagreement over

guidelines but because the angiogram was not read reliably.

        I have another institution that I'm a professor at, namely

UCLA.     Well, I think I know that the vast majority of doctors

do not wash their hands when they see patients.      Florence

Nightingale determined 150 years ago that that was true in

military hospitals.     The kinds of stuff that we have not acted

on are now becoming personal to this field as we get older.

Maybe we will take more interest in implementation research in

trying to figure out how to make a difference.

        In terms of this organization, I think the focus of this

meeting ought to be is - what kind of information is needed to


                                  25
make a difference?     And how do you change values from facts?

The fact is we are spending 16 percent of the GDP on health

care.    What Stuart said was a value decision that he failed.

His value decision was that that is too much.      I do not believe

that.     My value differs from him.   I do not believe he believes

that.     But we have to be able to talk about facts and

distinguish them from values.     There are a large number of

people that believe that we will live through or you will live

through spending 30 percent of the GDP on health care, and that

will be good.

        And finally, it is possible to make a difference and

change what you are doing.     There is a military site at RAND,

so when the question occurred when we were sending U2 planes

over Russia; the question was, how do you read these

photographs in a way that increases reliability because pilots'

lives were at stake?     And we developed a mechanism for

identifying people who would be the ones that actually could be

trained to teach them how to read a photograph, to teach how to

test visual acuity and increase reliability.     You can make a

difference if we want to do it and with the statement about we

eventually are going to need to re-change the entire structure

of medicine.

        Imagine a world where the people that read mammograms are

high school dropouts, and they get trained because they have


                                  26
wonderful eyesight to actually read mammograms.     Imagine a

world where the person that does cataract surgery is the person

that gets the highest score on the latest Sony PlayStation and

could actually look there and do here, and we train them to do

that as opposed to being an ophthalmologist.     Imagine a world

where we actually use disruptive technology to change what we

are doing, and then we can convince the American people that we

will spend the money that we spend wisely.     And if we do that,

maybe 30 percent of the economy will be spent on health care

and the board members that I have come to love so much will

stay alive because they get effective, reliable medical care.

     Uwe E. Reinhardt:   Thank you, Bob.   This dichotomy between

the health researchers - most of my colleagues at Princeton do

that - and health care researchers.   There is a potential

danger because they generally showed that health care for large

populations is not that important a determinant of health.      But

I have observed with them when they get sick.     They do

rediscover the virtue of health care, so there is hope, Bob,

with these people.   I think when you talk to them, they do not

deny the importance of health care.   I think it is just good to

know all the other factors that drive -- education being the

major driver of health status, and there is another angle where

we could improve the quality of life, which brings me to Karen

Davis who is a champion of that.


                                27
        I think I have known Karen longer than anyone else on this

panel.     First time I met her, it was in what I believe was a

broom closet of the Hilton Hotel in New York.      Marty Feldstein

had rented it to gather the American Economic Association,

young people writing their dissertation.      And we were in mid­

PhD dissertation, and we were supposed to talk about what we

were doing.     I think Mark Pauley [phonetic] was there.   I

think, Joe, you already were done or behind us.      I do not think

you were at that meeting, but it was very interesting.      I

remember distinctly Karen's dissertation was in hospital cost

functions or something like in that nature.      Well, she, like a

rock star, progressed very, very quickly.      She got her PhD at

Rice University, then worked at the Brookings Institution,

taught at Harvard for some time, then became the Deputy

Assistant Secretary of Planning and Evaluation.      Did she take

over?     Stuart held that.   And that is interesting.

        And no, Stuart, I do not know what you are politically -

but I would imagine you in Bob Brook's category - but you

worked for Nixon.     I do believe we should be nonpartisan.    I

think that we should break bread with anyone.      It distresses me

that there are Republican and Democratic macroeconomists.       I

think that should not be in our field.      So in those days, it

was much less partisan.




                                   28
     After serving as Deputy Assistant Secretary in '77 to '80,

Karen then became chair of the Department of Health Policy and

Management at the Hopkins, really dean of that very

distinguished school.     There are so many distinguished health

services researchers that are actually your students - Diane

Rowland     this town is full of your students who rose very

quickly - and is in my view, the dean of the international

health care study.     She revived that field through the

Commonwealth Fund.     Once, I was asked what to think of Karen,

and I said, "Well, if we were in Korea, she would be a national

treasure," because they designate people formally like that.

They get first-class seating and stuff.     It is good when they

do this.    But what I mean by that, when I did my thesis, I did

it because this professor said, "That is what you should do."

Yes, sir, and I did.     I did not have a philosophy about it, but

I think -- imagine Karen decided she is going to be a champion

of the vulnerable in society even before she started her

thesis.    Maybe I'm wrong, but I think that is what happened,

and that is what makes her so precious.     Thank you.   Karen.

     Karen Davis:    Thank you for that very generous and lovely

introduction.    Uwe asked us to talk about how we picked our

dissertation and how that formed the foundation of our careers

in the field of health services research.     And I heard the word

foundation, so I decided to talk about how the private


                                  29
foundations contribute to health services research.    One of my

mottoes in life is if you do not know much about the subject

they have asked you to talk about, talk about a subject you

know something about, and I do know, obviously, about health

services research.   But it is such a vast topic, I thought I

would like to talk at least toward the end about private

foundations.

     But to be a bit compliant and to respond to Uwe's last

comment about why I work at what I do, it really was the

influence of the 1960s and particularly being in Houston - so

to see Civil Rights and to hear President Kennedy talking about

the war on poverty and hearing President Johnson talk about a

great society.   I was a graduate student from 1965 to 1968.

Those were the first years of Medicare and Medicaid.   And so I

went into economics because at that time, economics was about

helping people achieving full employment, achieving

opportunities in life.   And while at that point, health

economics was not really a field - and so my training and

economics was general training, focus [audio glitch] economics

- I, too, like others on the panel, picked health care because

my chairman said, "Why do you not think about health care?"

But it really resonated and certainly is the biggest favor that

anyone ever did to me because it has just been an




                                30
intellectually exciting and professionally rewarding field to

be in.

     As Uwe mentioned, I did my dissertation on pricing and

investment behavior of nonprofit hospitals, building on some of

my training in the industrial organization, but then I had a

wonderful opportunity from the Ford Foundation to become a

Brookings economic policy fellow - wonderful opportunity to

work with Dorothy Rice, who headed the Medicare research

division and access to hospital cost reports, pre-imposed

Medicare, and a real opportunity to look at the

interrelationship between Medicare and health spending and

rising health care cost.   And Dorothy's brother, Joe Pechman,

ran the economic studies program at Brookings, and Brookings

did offer me a staff position at the end of that fellowship

where I had an opportunity to really look then at what

difference Medicare, Medicaid and other government programs

like community health centers made on access to care for the

most vulnerable.   So that is how I got to where I am with the

focus and interest in health care.

     But I think the field of health services research has made

extraordinary contributions over the last 40 years.   We have

heard i t from Ron Andersen and the behavioral model of access

and the research on the consequences of being uninsured, the




                                31
research on disparities in care that come as a result of the

way that we finance and deliver health services.

     Certainly, the Robert Wood Johnson Foundation was very

instrumental in my own career, funding me to do work on health

and poverty, and particularly a 10-year appraisal at the

Medicare, Medicaid community health center, maternal and child

health programs and the difference they made in improving

access to care and financial protection.   When I can find a

free minute, I'm trying to write testimony for a Senate finance

committee retreat next week or June 16th on the role of public

programs and health reform.   It was really great to be looking

back over this body of research of the difference that public

programs have made and how they could be a building block for

health reform.

     I think those of us who have looked at state programs and

analyzed those experiences are making a contribution to this

field.   I particularly like the growth in simulation models

that give us a better sense about the cost and coverage

implications at different reform proposals.   Having served in

the Carter administration as head of health policy, we

scrambled for the first year to just building a micro

simulation model to know what the implications were of

different proposals so to see that capacity today.   Certainly,

a lot of work on cost - Dorothy Rice's classic work - just


                                32
building a national health expenditure accounting system so we

know what we are spending and -



        [audio abruptly cut]



Karen Davis:     -- starting to really have the National Committee

for Quality Assurance reported every year on the state of the

nation's health.     And we know whether quality is better this

year than last year and we do have Jack Wennberg and his

Dartmouth colleagues' wonderful work on the variation in

quality across geographic areas.       So I agree we ought to

declare victory, just tremendous contributions that have been

made.

        We have also designed good research that has led to policy

change.     Certainly, the Thompson-Feder work developing the

diagnosis-related group methodology for prospective payment of

hospitals under Medicare bill shows wonderful work on the

resource-based relative value schedule that underlines the

Medicare; fee schedule, Mitch Greenlick; Harold Luft's work on

health maintenance organizations and managed care.

        We have come to understand what are the potential

implications of having integrated health care delivery systems,

more recent work looking at new payment methods that might

better reward excellence and efficiency in the health care


                                  33
system, plus just a wealth of research which Uwe certainly

contributed to on comparative health system performance.

     So those are certainly some things that stand out for me.

I run the risk in a large room [sounds like] like this that I

have forgotten some of the seminal work but I think we are

where we are today because of giants, not only on the stage

like Joe Newhouse's work with the RAND Health Insurance

Experiment, but the whole contributions at the field and

particularly the vision that the founders and Alice Hersh had

in the very beginning.

     So having said that, I would like to focus,   just to give

you a sense of the richness of the most recent kind of research

on things specifically that The Commonwealth Fund has done.      We

have put a lot of emphasis on performance measurement.     We

particularly historically cared about patient-centered care.

And starting in the 1980s certainly before I went to The

Commonwealth Fund, the Picker-Commonwealth surveys of patients'

experiences in hospitals has really made the patients'

experience a key measure of performance of providers.

     That started in 1986 with a gift of Harvey Picker at the

assets of the Picker Foundation to The Commonwealth Fund.       He

died at the age of 92 in March, at the week that Medicare

announced their release of public data on what is called




                               34
Hospital CAHPS, the Hospital Consumer Assessment Health

Provider Survey.

       Certainly the work on patient-centered medical homes has

built on that history; a lot of the work on racial and ethnic

disparities has built on that work.    We funded early on Don

Berwick and Sheila Leatherman to look at the business case for

quality.

       And what they found is there were many innovations that

places like Henry Ford, HealthPartners, Group Health

Cooperative were doing and they had a return to the patient

into society but not a return to the hospital that was making

those innovations in care delivery, so that they did not have a

business case.

       And now, all of that work really led to this movement that

is sometimes called Pay-for-Performance, it will probably

evolve to become pay for results or something else.    But the

basic notion is to reward providers for making the kinds of

changes in care design and care delivery that we would like to

see.    Uwe has mentioned the international work and certainly I

think we have made a lot of progress there and opening our eyes

about what we can learn from other countries.

       Universal coverage - certainly a number of ideas that are

out there that we have helped support including a recent Hea2th

Affairs article called Building Blocks, how to have a mixed


                                 35
private-public system building on public programs but also

employer, group health insurance, ways of achieving savings

while enhancing value in the health care system with the report

of bending the curve, and in general, the work of our

commission on a high performance health system.

     Grantees like Marsha Gold, Brian Biles and Bruce Stuart

have really done important work that led to the Medicare

prescription drug legislation and that have evaluated some of

the needed changes in both the Medicare advantage and the Part

D program.

     One of the issues we are devoting a lot of attention to

right now is patterns of hospital readmissions.   Our state

scorecard on health system performance found wide variations at

the rate of which patients are rehospitalized in 30 days.      So

we are supporting a lot of work on effective strategies for

reducing avoidable hospitalization.   Less familiar maybe to

folks but we are also supporting a lot of work on what I think

of as patient-centered care or residents-centered care in long­

term care facilities particularly nursing homes, a lot of work

on family-centered care trying to see that families with young

children get the kind of help they need from the health system

on preventive and developmental screening and services.

     In the last few years, we have supported a lot of work

looking at the gap between the rhetoric and the reality of


                               36
private markets whether that is consumer-directed health plans,

Medicare advantage, but really furthering our understanding

about the instability and inadequacy of insurance.     I'll walk

out of this into a teleconference on the release of our new

underinsured update which will come out in Hea2th Affairs' web

exclusive in the morning, just showing the rapid deterioration

in the quality of insurance coverage even for those with

insurance.

     But finally, I would say the thing that gives me the

greatest satisfaction at The Commonwealth Fund is what we have

contributed in the way of developing future leaders.    Certainly

The Commonwealth Fund-Harvard Minority Health Policy Program,

our international Harkness fellows, the early work through

Academy Health supporting Picker-Commonwealth scholars.

     But particularly as I went through the list of Young

Investigator Award, first of all I'm just delighted that this

year's awardee, Ashish Jha, we funded his research at an early

stage of his career.    Arnie Epstein brought him into The

Commonwealth Fund for a project Arnie was doing and Ashish

presented it, we said, "Arnie, why is Ashish not the PI on

this?"    He is clearly the one doing the work and Arnie said,

"Fine."    So it is great to discover that kind of talent early

on and we have supported at least half of the young




                                 37
investigators and at least half of the article of the year

award authors.

     Well, let me wrap by just talking about future challenges.

I think already we have talked about how we have a terrific

track record of health services research.     In fact, our

international fellows say, "You have the best health services

research in the world.    Why is it you do not have the best

health system in the world?"    And I really think they are onto

something there and whether it is that we have not done

implementation research or I would say, we have not done

actionable research and put enough emphasis on the translation

of that research into policy.

     And in fact, I really think we need almost a different

mode of research.     It does not mean that we would not continue

to do formal demonstrations, but I think we need to talk about

learning systems, pilots with rapid feedback, rollout and

spread.     And I look at the way corporations develop new

products.     They often test them in three or five markets and

then, they get quick information how well that works and they

tweak it, revise it, and roll it out to more markets.        Follow

that, revise it and roll it out to more markets.

     And we do not really have this model in health policy and

I think we would be better served by having this.    We talked

about states' learning laboratories and certainly the


                                  38
Massachusetts' health reform is paving the way for national

reform, but I think we need a more systematic approach to what

I call pilot rapid feedback and then roll out to more and more

settings.

     But finally, we need to communicate our research more

effectively and particularly, reach the audiences who are in

the position to effect change whether those are policy leaders

or those on the front line of care running health systems.        So

thank you very much for your attention and obviously to all of

my colleagues at The Commonwealth Fund.

     Uwe Reinhardt:    Well, thank you very much, Karen.   By the

way, when students come at Princeton, they must write a senior

thesis and say, "I want to write in health."     I always tell

them spend the weekend with The Commonwealth Fund website and

see me next week.     You start there and some others, but that

one in particular because it is so rich in content.

     Our final speaker, simply because his name starts with N

is Joe Newhouse, probably the most distinguished health

economist worldwide, in my view, best known.     He is the John

MacArthur professor of Health Policy and Management at Harvard

and the head of the Interfaculty Institute of Health Policy.

Harvard is very difficult; it is not a regular university, it

is a whole lot of feudal systems somehow and this is one knight




                                  39
who was allowed to go from castle to castle.           Is that how that

works?

     Joseph Newhouse:       It is something like that.

     Uwe Reinhardt:     -- without getting clobbered, yes.

     Joseph Newhouse:       Most of the time.

     Uwe Reinhardt:     As you heard from Bob Brook he started his

career, I think, in major ways at the RAND Corporation as the

principal investigator of the classic study never been

replicated again on health insurance, then returned to Harvard.

     He has been, since its founding, the editor of the Jou=a2

of Hea2th Economics and Stuart mentioned rigor, certainly in

our field, Joe is the guardian of rigor in many, many ways of

analytic rigor in that field.       He was the coeditor of the

Handbook of Hea2th Economics.       It is a two-volume tome, which,

for any graduate student in Economics, i t is the first thing

you tell them, "Read that book and then come and tell me what

grabs you there."     There must be eventually a volume three with

updates.   Is i t coming?

     Joseph Newhouse:       Probably.

     Uwe Reinhardt:     Probably.       Okay.   Anyone wants to fund it.

I happened to have the privilege of overlapping on Physician

Payment Review Commission with Joe, and also Karen was there.

And Joe and I were the neoclassical bad boys with all these

weird ideas for example, that graduate medical education


                                    40
subsidies really cannot be justified and it was always Karen

with her Oklahoma charm putting us down gently, the naughty

boys, saying, "Oh, this is one of your more flaky ideas."      I

remember that was one of those and that was usually the end of

the discussion at that time.   So Joe, will you come up or do it

from there?

     Joseph Newhouse:   So I feel a little odd not having

slides.   This is the first talk I have given in a long time

without them.   But Karen's story about why do we have such good

health services research and such a health care system - I will

not put an adjective in that - since reminds me of one of my

first doctoral students at Harvard who was Canadian, and when

he was coming across one time from having gone home coming back

to the U.S., the INS wanted to know what he was doing in this

country and he said he was coming to study Health Policy.    And

the INS agent did not believe him.

     I got the title for this session, "Where has health

services research been and where is it going?"    And I did not

realize that there was a has-been panel and we are going panel,

and I have been assigned to the has-been panel.    So I thought I

would say a little about both topics and since I cannot

conceivably cover the whole field or even health economics, I

would like to say a little about a piece of health economics.




                                41
     Oscar Wilde is well-known for having said that economists

know the price of everything and the value of nothing; and that

was how Stuart characterized me when I came into his office, so

I thought I should say a little about prices and what we know.

People have talked about the RAND experiment and I noticed

looking at the panel that actually all of them had a hand in

making that a success.   Stuart and Karen helped provide the

money.   I was there working out on my elliptical one night, a

couple of years ago, and there was Karen on the News Hour

saying, "And I was the project officer of that project."       And

Ron actually sent me the data from the survey that he

discussed.

     We had to provide power calculations and those were the

data I used to provide the power calculations.       And many years

later, I was giving a talk to some students about the design of

the experiment, and I had never gone back and looked at how

well we did in those power calculations.

     It turned out we are right on, I mean the standard errors

at the end of the day were right what we said in our proposal.

You would be glad to know that Stuart, that is what we said,

and of course Bob was central to making the whole health status

and quality of care piece work.        In fact, little did Stuart

know that what Stuart did by his remark was to give Bob an

entitlement to come into my office - i t would seemed like


                                  42
everyday but probably i t was only every week - to say he needed

more money for the health status and quality of care work which

most of the time he got, although he never got enough to

satisfy him.    But anyway

     In terms of prices I want to distinguish demand prices,

that is what people pay for care, and supply prices, that is

what providers get for care, the difference being of course

insurance.     On the demand side, the usual or first side anyway,

is to the RAND experiment.     But where the field is going I

think, is how to write a better set of demand prices or better

insurance contract than we had in those days when we simply

ramped the coinsurance up or down subject to a stop loss.

     My colleague, Mike Chernew, has talked about value-based

insurance design.     Other people talked about -- like Cass

Sunstein and Richard Thaler about nudging consumers, when does

i t pay to actually lower prices to get consumers to do things

that they should be doing?     The extreme is directly observed,

therapy for TB where we actually pay people, but I do not think

we know very much about that domain.     And I think over the next

few years, there is an opportunity for a lot of studies to

figure out where i t makes sense to raise and lower selected

prices on services that people are underconsuming.

     The supply side when I came out of graduate school was

something of a mystery to me.     There were these models where


                                  43
one wrote down P or something called Pon they axis, and P

just sort of magically descended from the sky.     When I started

running the RAND experiment, I suddenly realized that I had a

hand in studying P and that that was not something that was in

the model.     So what do we know about supply prices?

     Uwe alluded to the fact that he and Karen and I did some

mischief with physician prices, and Stuart and I actually had a

hand in hospital prices too.     There are several dimensions to

the prices.     There is the level of prices, how much you pay,

Tom Rice [indiscernible] and some of the PPRC work showed that

levels matter; if you pay physicians less, they do more.       And

that is efficiently well-established that the CMS actuaries

actually account for it when they do formal scoring.

     We know the degree of bundling matters.     When Stuart

introduced DRGs for hospitals, length of stay fell about 10

percent.     And we know that hospitals later unbundled services

to post acute care in the early '90s that was rising fast and

now, we have also a new dimension - pay for performance.

     Again, to go back to where Stuart was with his question, I

do not think we know a lot about what all of these do for

quality and outcomes.     The RAND group certainly did the

definitive study on PPS for quality and outcomes, but there are

a lot of dimensions to supply prices and there is a lot of work

for what can happen to what economists would call welfare


                                  44
effects on supply price.      So there is a lot of work left to be

done and maybe even the next panel will talk in more detail

about some of that.

        Uwe Reinhardt:   Well, thank you very much.    Joe's remarks

have been -- that was perhaps careless.       We should have called

i t the panel of seasoned adults relative to everyone else

present.     Everyone here is still active and working which is

one of the great things about this country, that you can do

that.     In other countries they would put you out to pasture at

age 60 or 55 and here you can keep going.

        I think the consensus on the panel was basically we feel

our cohort has done quite a bit.        We do not have to apologize

even for the succeeding cohorts to do.        There is a lot to be

done and always will be.      Health care by the way is now the

economic locomotive of the American economy.        It created the

only jobs between 2001 and 2006; the only metric creator of

jobs, one million jobs was health care.        The entire rest of the

private sector, nada, zilch, they created jobs and killed just

as many.

        So health care is in some way from a macroeconomic point

of view -- I have always felt if you really want to play

Keynesian economics and stimulate the economy by injecting

money into it, tax cuts are not a safer thing because they may

go into offshore mutual funds or Ferraris.        But if you put i t


                                   45
in health care, every dollar stays home and creates jobs

overnight.

        We do not do research on that but macroeconomists might

have a look at health care as the economic locomotive now.            So

you will always be employed for years to come.          We now have

some time for questions from the floor.          Always ask the second

question, the first one people are always shy, so the second

questioner, please.

        If not, we will talk some more.       We have somebody.

        Larry Kleinman [phonetic]:        Larry Kleinman from New York

City, Mount Sinai.       I would be interested in hearing the

economists' respond to Bob Brook's suggestion that we really

need to think not only about the value proposition but the

values proposition and how in your discipline you might think

about incorporating that.

        Male Voice:   I do not know how these things --

        Uwe Reinhardt:   No, you are okay.

        Male Voice:   Okay, I'm okay.      Well, I agree with Bob.    I

think there is a significant body of economists, usually not

strictly health economists, that have developed an alternative

model about how our health care system should function which is

really at odds with - I would suspect - a great majority of

what we are talking about here at this meeting and stuff like

that.


                                     46
     I mean we all know what it looks like.     And you see it in

one of the candidates which will go unnamed right now, but it

really has a whole fundamental basic microeconomic theory

foundation and then has all the pieces of it.     One is consumer

directed health plans doing away with employer-based insurance,

giving people a dollar and a half and telling them to go buy

private insurance, especially hospitals run by physicians,

breaking up of regional cooperatives, the opposite of what we

are talking about in terms of large delivery systems - so

economics is really, I mean once you separate -- there is a big

chunk of economists that have a very different view about what

the health care system should look like.

     And if they have their drivers [sounds like] will look

like which is, if all due respect, quite different than the

results that you hear from Commonwealth or from Kaiser or from

most of us, that battle is not over.   Quite the opposite, I

think it is really center stage on where our health care system

is going.   And every once in a while, those of us who sneer at

it and then we wake up the next morning and we have more of it.

     So for those of us who are fighting whether it is -- I

think it is based on research, I think my side of the knowledge

base is much stronger, but the ideology that runs the other

side is very powerful and it does have resonance outside.      So




                                47
Bob is right, there is a group out there that believes the

truth is totally on their side.

     Karen Davis:   This is a bit not directly touching on the

values question, but I think economics often gets a bad name

because in recent years it is focused on the only way to

control cost is for people to have skin in the game, it has to

pinch, it has to hurt, high deductible health plans which

obviously are beyond the means of most uninsured, most low­

income working people to afford.

     But when I go back to my economics training, I think it is

all grounded in utility theory, that goods and services ought

to be provided in a way that maximizes patient satisfaction -

the good that they get from goods and services.     So I feel like

if we would really have patient-centered care, and I have

weighed the consumer driven since that is kind of a distortion

of what it was really about, but if we really designed the

health care system so that it worked for patients and delivered

the kind of care that they valued in a way that works for them

and a way that they deserve.

     So that is why I have just a lot of enthusiasm for the

whole field of patient-centered care, surveying patients'

experiences, designing health system around that.     So whether

it is all the public views work that Bob Blendon has done so

well to kind of find out what people want, particularly from


                                  48
their elected officials or whether it is more directly what

patients want; that if we will just ground ourselves in

listening to the patient, listening to the public, then we will

be able to help contribute toward moving the health system both

in policy and practice toward a system that is high

performance.

     Uwe Reinhardt:   Bob Brook

     Robert Brook:    I actually interpreted the question a

little differently so economists - at least of my era - have

been trained to distinguish sharply between efficiency or how

to make everyone better off at least in principle and equity,

and the tools of economics on the whole focus on efficiency.

There are some economists that have crossed the two.    Richard

Musgrave early on did pioneering work in public finance and

talked about the distribution branch as well as the allocation

branch.

     And today, Amartya Sen has a Ph.D. in Philosophy and in

Economics had won the Nobel Prize and talks about this.       I

think actually you, as health services researchers, to the

degree you are trained in a multi-disciplinary fashion, have

some advantage over straight economists in this domain because

you can in principle take both economics and courses in ethics.

You can read somebody like Norman Daniels as well as economists




                                  49
and they would not normally appear in a standard Economics

Ph.D. program.

     Male Voice:    I was going to try to clarify two seconds

what I wanted to say, maybe I did not say it well.        Let's take

the health insurance experiment.       A fact of the health

insurance experiment is that for the average employed person

did not change health or health status even though use changed

dramatically.    It is a value judgment to say that that holds

true for today's health care system.

     I have no idea whether that would be true given the

advances that have occurred in medicine.        I'll give you an

example for medicine.    It is a fact that coronary artery bypass

surgery was better than medical treatment for people with

certain kinds of lesions in the arteries.        That study was done

30 years ago.    Medical therapy is different.      Surgery is

different.

     It is a value judgment whether you want to decide that you

want to extrapolate that today.        On a little bit even more

difference, we are all health services researchers, when we are

confronted by people that look at the determinants of health,

where should we invest the next dollar to produce health in

this country?    Do we improve intercity schools or do we give

health care coverage to people that do not have it in the

intercity?


                                  50
     What is the fact and what is the value here in terms of

what is going on?   We have a value that believes that we ought

to have a medical home for people and that home ought to be run

by some team that has a primary care doctor in it.     That is a

value; there may be some facts to support i t but that is a

value.

     There is a fact that says that is not going to occur in

our lifetime because there can be no doctors trained to be

primary care physicians anymore, unless these characters that

control the economics actually really do something radical with

the reimbursement for primary care physicians or a mandate that

medical schools - that is the regulator approach, we got Stuart

back the hats - actually regulate that doctors being trained

have to be primary care doctors or they cannot practice in the

United States, they can go to Germany.

     The bottom line is that we really need to be careful

between distinguishing what we know - we know a heck of a lot -

versus the values we believe in.     And we really need to answer

the question as a group in making a difference.     Is the

difference about differences in values or is the difference

about differences in facts?   And for each of the important

issues that we address, we really need to be clear what we are

doing because i t gets very confused when you go out to try to

interact with the policy process.


                                51
      Stuart Altman:   I want to address this issue.   When I made

the comment about it, I failed, that was part in jest but I

think, Bob, two things I would say about how much money we are

spending on health care.   You are absolutely right, given the

fact that I'm falling apart, 30 percent sounds just fine for

me.   My concern though is what I call the meltdown.

      And I do not think we are doing enough research on that.

You can say what you want, but if I add up all the dollars that

many of our research findings suggest that we need to spend

more on X and more on Y, and oh, yeah, well, we can take it all

out of insurance administrative costs, it is nonsense.      The

issue is that there is a meltdown potential out there and I do

not know when it is going to happen, but we are actually losing

coverage.

      We have been fortified by our Medicaid program during the

'90s and part of the 2000 so that it did not result in numbers

of uninsured.   I'm very worried about this recession that we

are in, that we are going to pass 50 million like a shot.         So

my comment, Bob, was not in disagreement with you.

      I do not have a number anymore.     I knew it when I was 32

and of course then, we were spending too much.     But at my age

now, we are not spending much.     But I am concerned about our

health care system and I am concerned about the people that are

uninsured and partially insured.      I think the work that Karen


                                 52
is doing, it is wonderful, but we need to do more things on

trying to figure out a way to get a growth curve that our

country can sustain.     I do not think we are doing enough

research on that and we are leaving it at the ideologues to

make those calls.

     Robert Brook:     By the way, Stuart, I agree that the facts

of this need to absolutely done.       I absolutely agree.    And we

are all doing it.    The confusion that occurs is when there is a

value decision that is made with that fact as well.          I mean, I

am a geriatrician.     I can tell you that the most expensive

technology is a very caring person and a fork, because you can

keep elderly women alive with a fork and a very caring person

for seven to 10 years to die a slow terminal death from either

their bones rotting away or their heads rotting away.

     And the fact is that we can do that.       Now, how much you

want to invest in that and the value of whether we want to do

that or not, it has to become a value judgment.       But the fact,

I as a geriatrician can tell you that there is a fact that we

can spend an enormous amount of money here.

     The value of doing this is something that         and I would

love this organization to begin to have ethicists, religious

people and others in here to really begin to figure out how you

debate values regarding these facts.      But I could not agree




                                  53
with you more that we need an enormous amount of information

about some of these questions that you are talking about.

        Uwe Reinhardt:   Well, i t is interesting, this morning we

had a session on some international work.      And you could, in

theory, if we did everything cost effectively in this country,

think of generating a quality of life, quality supply curve,

some quality of life years are cheap to buy and others, when

you get into Erbitux, Avastin - some of the specialty drugs -

i t gets very, very pricy to rest another quality life year from

nature.

        And most societies somehow implicitly or explicitly say

there is a maximum price we are willing to pay for another life

year.     And Americans not even implicitly, explicitly refuse to

confront that question because i t was mentioned in the latest

drug bill, the Medicare Modernization Act, i t was explicitly

mentioned that costs cannot be considered in effectiveness

analysis.

        So Americans have their head in the sand which brings you

to Stuart's point at current trends.      Think of a family with a

$50,000 income, if that grows at three percent per year for the

next decade; let i t grow at three percent.     Now for a family

like that according to the Milliman Data, i t costs $15,500 for

a family of four to keep them in American health care as we

know it.


                                   54
       Run that out at about eight percent which is what is

likely the growth rate, that means 10 years from now, 53

percent of that wage base will be chewed up just by health care

and then you still have social security contributions, FICA,

income tax, rent, gasoline - all of that to come out of that.

And this will not compute which is what Stuart is talking

about.

       We are facing a major moral question in this country and

no one is talking about it.     You cannot even get an Op-Ed piece

published on it because Americans simply do not want to hear

about it.     They do not want bad news.   But we are facing in the

coming, you ask, I do not know, when it will happen; I'm

telling you it will happen in the coming decade.

       I think we do have to come to a close.    There are more

questions but you cannot come up, but I do not want other

people to miss the wonderful offerings that follow us.      Thank

you.     Would you join me in thanking the panel?   And thank you

for joining us.




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