 I believe we're about ready to start here. First of all, do any of our panelists have any suggestions? Questions? Should I wait for the questions? I have a question for Dr. Callahan. A real Nobelist in economics, Robert Solow once quipped, if you're traveling from Boston to Los Angeles, the first thing you need to know is head west. Let me be, you have said that you are object or find flawed the underlying ethos of unlimited technological advance. But I'd like to go back to Boston and just go to the beginning of the trip. There is research now going on to find effective treatments for different forms of cancer. We are reportedly reasonably close to finding a cure for Alzheimer's disease. There have been spectacular advances in the last half century in the treatment of coronary disease. One could go on and on. We can now do organ transplants, joint transplants of various kinds. We're investigating a lot now to make further advances. Which of those would you stop? Cancer, you would not try to find a cure for cancer. No, I would reduce the amount of research money put into the search for a cure for cancer and transfer it to Alzheimer's or other conditions. Because it's mainly, it's a disease that kills mainly the elderly and I would say for just that reason you can devote less money to it than diseases that affect other age groups. Let me pursue that a bit. Let me, for the sake of arguments, say I agree with you on the allocation. The reallocation, I presume, is to achieve a more effective and more rapid advance of medical technology, not to abandon the principle of it. If one is in favor of research for specific diseases that would find cures or ways of forestalling them, why don't we just let it go at that and see what we can do. And if at some point, 50, 75 years from now, we reach some frontier that is problematic, we can reconsider it at that point. Well, I think we have reached that frontier now because we will not be able to control our health care costs and deliver good health care to people unless we decide we have reached the frontier or we're pretty close to it. And in the very nature of medical progress, there will always be a frontier, right? I mean, it seems to me every year with testimony of the National Institutes of Health that this is, we have more, greatest prospects ever before. That's a standard line. And I have no doubt, first of all, that if we even cure the diseases you mentioned, that others will take their place, that if everybody's living to 100 years, the doctor's offices will still be filled and people will be complaining and saying we need more research. I'm saying at some point, what do you do when you have infinite possibilities? One of the analogies I didn't use in my talk was the exploration of outer space. The pursuit of better health is like the exploration of outer space. However far you go, there's always further you can go. And I'm saying that we now begin to see some of the economic limits of going that way. We may have to actually begin rationing research money, and we may have to ration care of things we know will work. To me, the problem is the great problem with cost is the stuff that really is effective, not the things that don't work, and we're getting better and better. And we may not find a cure for cancer, but we're surely going to find more and more expensive ways to treat the cancer. And of course, we see right now you're getting very expensive cures or ways of ameliorating cancer, but it doesn't cure it, and that's likely to continue for a while. I'm saying at some point, yeah, we're always going to have to make a sacrifice of some further benefit, but maybe now is the time to begin thinking of doing that. Well, then on the recent history of the past couple of years should be terrific news. Flatlining of the NIH budget has resulted in a reduction in the proportion of grant applications approved by more than half and a reduction in the number of continuation grants approved by more than a third. We're well on our way under current policies to choking off. Well, that's about the first budget reduction in like 40 years of that program. It had a golden life, and the fact that now the real world is catching up to it. No, no, no, the application rate is lower than it has been in decades. Dr. Osterholm. Well, first of all, I wanted to thank Dr. Callahan for what I thought was a very clear and concise discussion of the issues. One additional piece that I would add is I worry desperately that we are a rudderless ship in this discussion. We continue to bring up the term death. You know, death is inevitable. We bring up the term death from breast cancer or prostate cancer. That is not a singular term. A male who dies of prostate cancer at 52 or 55 is very different than a man who's diagnosed with prostate cancer at 85 potentially or breast cancer. They're different cancers. They're different illnesses in the sense that I wish Dr. Bishop was here. He could talk to that degree about what do you research on. You know, if I'm 82 and diagnosed with prostate cancer, I may tell you to leave it alone and I'll die with it, but it'll be not what I die from. And so part of the problem is we've had a hard time distinguishing within what it is we die from. If I were to die at age 75 while scuba diving off the Cayman Islands and I'm down at 120 feet and all of a sudden I go and they bring out a smile on my face, is that worse than if I died 85 additional years while I've been in a nursing home bed tied to that bed to protect myself from myself for the last two years? And I think that one of the issues we haven't dealt with is death is inevitable. So therefore, what should we deal with? One of the things, Dan, I just want to ask you to comment on, you know, we've tried moving much more away from death to disability-adjusted life years. The idea that there are lots of conditions out there we should be doing research for, but that in fact, you know, living 20 years in agony, pain, and total disability, is that better than me dying from my Cayman Island heart attack because in fact I would be considered a failure from a cardiology standpoint if I died scuba diving at 75. How can we start to bring some measure to this as beyond just the very crude measure of death? Well, I would say we really need a serious discussion about priority setting and research, not only in research, but in health care delivery. And one of the advantages of a universal health care system is they force you to set some priorities because you have a limited budget you have to work with. We don't, and hence it's very hard to have priorities. National Institutes of Health in the late 90s had some discussions about setting priorities, not, didn't get very far I think, but they tried. So I would start there, and I guess I would put it to you and this isn't a challenge, just a question. If we have a budget that did not expand and we had to do support more of the things that you were talking about today, where would you cut the money from? And I think that in fact that's a very real point and we need to, first of all, we have got to get world population under control. That is going to drive many of our health issues. And, you know, I said earlier, you know, basically I think investing what you said in some of the high cancer cost research areas or some of the other areas out there, you know, I think it's in the basic sanitation, some of those things, I'd definitely move that. I think the other areas is I would look at those diseases, again, which are disability causing and death combined, versus just death. And then I would even look at death, it's not simple enough to have 10 top 10 causes of death because they're so different. Finally, I think the last piece I would do is I would examine really what we're trying to do in the area of medicine. And I come from the University of Minnesota and as being outspoken, I'm sure I'll hear about this when I get back to my campus. But we're one of the problems. Because on one hand we're talking about affordable health care, we try to educate our physicians, on the other hand we love high tech medicine. We do all the research we can and bring in all the dollars we can. Those are inconsistent. We have to acknowledge at some point they are. I think that part of it is just changing the mindset to even have this discussion, which I know you've done. But then it's from that discussion, what are we really trying to measure? What are we trying to do? I mean, that's why I press for... Let's decide what are the real fundamentals below. What are the values instead of trying to think, well, we'll keep the present. We won't look at the values, but we can just do it all more efficiently. Well, that's the dead end. Dr. West? I guess you've made an assertion that we're healthier now than we ever have been. And yet, when I look at the world, I see increasing rates of type 2 diabetes, even in young children. Dramatic increases in diabetes. I don't see America being in a healthier state now. And so I just challenged that assertion. I wonder what facts and data you've based that on. Well, I've certainly based life expectancy, that's the fundamental one right there. Not all of which can be attributed to medical care. There's been a great deal of talk in recent years about actually, maybe it's been the elderly, primarily, but a decline in disability. So there are some things of that sort. And in many recent years, hasn't the U.S. life expectancy slightly dropped? I don't believe it has. I think it's... I think actually both of you are right. It's a situation where it's where we're at in time. Dr. Callahan is right. And life expectancy in many areas of the world where HIV doesn't exist in its hyper-indemic form, life expectancies can do increase. But we're like a car crash where we basically have just had the initial impact and the head's not gone through the windshield yet. So we're in that time period right now. With the obesity issues you just talked about, and with the behavior issues right now, the life expectancy we believe in the next 20 years is going to precipitously drop in a number of areas. And in the United States, I mean we're on a collision course with Destiny right now between the baby boomers which are going to push on the top side and the obesity epidemic and the issues we now see on the bottom side, we're going to see incredible health care costs start to develop that we haven't yet accounted for. So you're right right now. You're right 10, 15 years from now. And I don't think those have anything to do with technology. I think those are the things we face in the aging of our population and the health care issues we're going to face with the obesity. I don't know the figures. It would be interesting to compare the amount of money doing medical research on diabetes over against research to reduce obesity. That would be because I think I consider obesity a public health problem. Whereas the emphasis we're going to find cures for these diseases. And I'll bet the money spent on the medical money is more than the prevention money. I don't know. There's a question from the audience. What is going to be the tipping point in health care that will cause politicians to invest in universal health care? Oh guys, that's the question that's been asked for years. I guess my assumption is that middle class people previously well covered begin to feel the pain. And that may be approaching as more companies reduce health care benefits or cut programs and bankruptcy figures I've mentioned are very striking. That's a very reality in people's lives. On the other hand, there's still the anti-tax sentiment in this country. There are lots of and the medical profession is going to have mixed feelings about universal health care and the conservatives would hate the idea so I could take it. Can I ask Dr. Irwin a question about that for five minutes? I think Dr. Callahan just laid out. We hear consistently from the private sector that health care costs even as they pass it through to their workers still the residual that they have to pick up is basically causing us to become less and less a player in the global just in time economy because many other countries don't put that burden directly on the private sector. So that in fact is that what's going to drive us ultimately is our lack of competitiveness. Not that we won't pay it, it's just how we are going to pay it. And does the private sector increase cost issues cause concern that will mean that's what will be the tipping point? First of fact the proportion of total health care spending covered by third party payment that is to say by private insurance or government programs is almost constant means about out of pocket payments are genuine they are going up they're going up because total health care spending is going up and a portion of that is falling on individuals and people react to that. But we're not sort of becoming uninsured as a nation in any aggregate or perceptible way. Now as for competitiveness here there are some things that economists believe they believe down to their shoes nobody else does I'm reminded of the old quip that there was a movement in the United States in favor of what was called metropolitan government cities and all the surrounding here everybody was for them for that except the cities and the suburbs. Well when it comes to the issue of competitiveness economists almost to a person believe that rising health care spending is not a significant component of the competitiveness of U.S. firms abroad. Why is that? Not instantly, not smoothly not completely evenly if health care costs go up either wage growth slows or some other fringe benefit growth slows the total compensation of workers as a share of total output would go up if health care costs were driving the total amount paid to workers but it isn't in fact total payments to workers have been flat to trending down a slight bit in recent years. Workers are getting as a share of total what economists call the total value of production a somewhat smaller share of the total pie than has been true in the recent past. Well that means there are offsets going on here there are some big exceptions to what I just said if you're an old company like General Motors Ford, U.S. Steel, Alcoa and you have a big retired workforce to whom huge promises have been made that's a liability of the company de facto GM is probably insolvent because of the liabilities for future health care costs that have not been recognized on the balance sheet that certainly affects their ability to borrow funds to invest in new developing new cars and hence in their ability to compete in a mobile market but for the most part accepting those old rust belt companies with large what are called legacy costs rising health care spending simply means you have less of your total compensation left over to take home and spend on things other than health care and hence it doesn't to a significant degree affect international competitiveness of U.S. companies now I say that U.S. Congress believes that I don't think you could find anybody representing organized labor or business in the United States who would say right on Henry you've got it right they would disagree almost unanimously I have a question here from I would guess that this must be a position please name one specific medical advance such as defibrillators by-class surgery or another device of treatment that adds to medical cost of efficacy give me the list I'm sorry efficacy the thing is something we can have an economic crisis of something that is efficacious and to me that's the real problem that's what I mentioned with the evidence-based medicine we are turning up things that the cost seems to be absolutely worth it this is a question I have for economists many economists seem to say if the cost and the benefits balance and it's a good buy and say well maybe you can't afford it the cost and benefits of a Rolls Royce that balances pretty well too but most of us can't afford a Rolls Royce and it seems to me the question is it may well be that there are things that are de-beneficial but are so expensive that they create fits of another time but in your talk you specifically said that there are unproven technology well that's very general but I'm saying something that's been in healthcare for a long time there are plenty of them out there there isn't a technology you can think of including the ones mentioned that isn't beneficial for somebody and isn't used in other situations where the benefits are negligible we as individuals pay very little when we're seriously ill for the cost of that technology so if it helps give it to me that's my incentive it's my physician's incentive but the technology in my view is not that it's advancing but that we use it indiscriminately we don't use it predominantly overwhelmingly in cases where benefits are demonstrable we use it to a most technologies we overuse them in a large number of cases where the benefits are negligible if you get me going I can tend you to a couple of personal anecdotes that reinforce that the European experience indicates that they do have less available technology but in fact their health they get equally good or better health outcomes that certainly supports your position one more question here does the Oregon method of delivery of healthcare does this fit your vision for healthcare or is there any other particular model that seems to attract your attention well the Oregon I have not been able to really find it in recent years I've gathered it's more or less fallen apart they've had all sorts of economic problems out there I think in theory it was a great thing there were complaints it was devoted aiming at Medicaid and thus going to get the poor but the point is it was a closed system the only way you can set priorities is that you have a system that's lived within a budget so I thought it was a good experiment now apparently it fell apart is there a particular system that you find is a positive here a number of countries I would say there are 10 or 12 countries around the world that have tried to set priorities at least for healthcare delivery and they've developed nice reports and everything else and what's very interesting is in no case has the government accepted the recommendations and I decided because this is a notion of politics most politicians and legislators are not waiting around for some elegant formal academically driven ideas they like the early bird of politics and that's why the National Institutes of Health they talked about setting priorities but in fact in the end it was kind of a black box what they did and it was not clear how they finally decided what went to cancer what went to heart well I think we've gone about a half an hour here I'd like to have us all stand and give a last round of applause here for our speakers today thank you for a very enlightening day we'll begin tomorrow