Joyce Frieden

WASHINGTON — Congress is considering giving the Food and Drug Administration more authority over the pharmaceutical companies it deals with, but some legislators are warning against doing too much too fast.

“Changes to drug safety … must be carefully considered to make sure they don't unduly impact patient access,” Sen. Mike Enzi (R-Wyo.), chair of the Senate Health, Education, Labor, and Pensions Committee, said at a hearing on FDA oversight. “Congress needs to engage in strong oversight to maintain public confidence in the FDA.”

Sandra Kweder, M.D., deputy director of the Office of New Drugs at the FDA's Center for Drug Evaluation and Research, told the Senate committee that in order to ensure drug safety, it would be helpful if the FDA had more clout. She noted that it took a lot of back-and-forth haggling just to get some earlier warnings added to the label.

“The most important lapse [with the safety concerns surrounding Vioxx] was the delay it took to get the information into the labeling; it took over a year,” she said. “I think stronger ability to require changes in labeling would be very helpful.”

The committee's ranking member, Sen. Edward Kennedy (D-Mass.), also spoke in favor of giving the agency greater labeling authority. “The FDA needs clear authority to require relabeling of a drug after approval once a risk is found,” he said. “Negotiations with the drug company should never delay [that].”

Some observers said that although giving the agency more authority over label changes is a good idea, it only goes so far. “We all know product labeling does not change provider behavior very much,” said Arthur Levin, director of the Center for Medical Consumers in New York and the consumer representative on the FDA's Drug Safety and Risk Management advisory committee. Even if FDA does get more labeling authority, “we shouldn't count on it protecting the public from harm,” Mr. Levin said at a teleconference announcing the release of a new survey on consumer attitudes toward the FDA.

The survey of 1,000 adults nationwide was performed by pollster Celinda Lake and sponsored by a coalition of consumer groups. The results showed that only 14% of respondents had a great deal of confidence in the agency's ability to ensure the safety of prescription drugs. And 48% of respondents believed the FDA was too influenced by the industries over which it has jurisdiction.

Another subject discussed at the Senate hearing was the secrecy of clinical trial data. “I'd like to emphasize the importance of open access to data from clinical trials, including negative trials and unpublished research,” David Fassler, M.D., a child and adolescent psychiatrist in Burlington, Vt., who testified on behalf of the American Academy of Child and Adolescent Psychiatry and the American Psychiatric Association.

In 2004, when Dr. Fassler testified on the question of whether there was a link between selective serotonin reuptake inhibitors (SSRIs) and suicide, “there were only four studies in the published literature on [the use of] SSRIs in adolescents. But I later learned that there were 11 unpublished studies whose results had been submitted to FDA. Parents clearly need access to this kind of evidence.”

WASHINGTON — Congress is considering giving the Food and Drug Administration more authority over the pharmaceutical companies it deals with, but some legislators are warning against doing too much too fast.

“Changes to drug safety … must be carefully considered to make sure they don't unduly impact patient access,” Sen. Mike Enzi (R-Wyo.), chair of the Senate Health, Education, Labor, and Pensions Committee, said at a hearing on FDA oversight. “Congress needs to engage in strong oversight to maintain public confidence in the FDA.”

Sandra Kweder, M.D., deputy director of the Office of New Drugs at the FDA's Center for Drug Evaluation and Research, told the Senate committee that in order to ensure drug safety, it would be helpful if the FDA had more clout. She noted that it took a lot of back-and-forth haggling just to get some earlier warnings added to the label.

“The most important lapse [with the safety concerns surrounding Vioxx] was the delay it took to get the information into the labeling; it took over a year,” she said. “I think stronger ability to require changes in labeling would be very helpful.”

The committee's ranking member, Sen. Edward Kennedy (D-Mass.), also spoke in favor of giving the agency greater labeling authority. “The FDA needs clear authority to require relabeling of a drug after approval once a risk is found,” he said. “Negotiations with the drug company should never delay [that].”

Some observers said that although giving the agency more authority over label changes is a good idea, it only goes so far. “We all know product labeling does not change provider behavior very much,” said Arthur Levin, director of the Center for Medical Consumers in New York and the consumer representative on the FDA's Drug Safety and Risk Management advisory committee. Even if FDA does get more labeling authority, “we shouldn't count on it protecting the public from harm,” Mr. Levin said at a teleconference announcing the release of a new survey on consumer attitudes toward the FDA.

The survey of 1,000 adults nationwide was performed by pollster Celinda Lake and sponsored by a coalition of consumer groups. The results showed that only 14% of respondents had a great deal of confidence in the agency's ability to ensure the safety of prescription drugs. And 48% of respondents believed the FDA was too influenced by the industries over which it has jurisdiction.

Another subject discussed at the Senate hearing was the secrecy of clinical trial data. “I'd like to emphasize the importance of open access to data from clinical trials, including negative trials and unpublished research,” David Fassler, M.D., a child and adolescent psychiatrist in Burlington, Vt., who testified on behalf of the American Academy of Child and Adolescent Psychiatry and the American Psychiatric Association.

In 2004, when Dr. Fassler testified on the question of whether there was a link between selective serotonin reuptake inhibitors (SSRIs) and suicide, “there were only four studies in the published literature on [the use of] SSRIs in adolescents. But I later learned that there were 11 unpublished studies whose results had been submitted to FDA. Parents clearly need access to this kind of evidence.”

WASHINGTON — Congress is considering giving the Food and Drug Administration more authority over the pharmaceutical companies it deals with, but some legislators are warning against doing too much too fast.

“Changes to drug safety … must be carefully considered to make sure they don't unduly impact patient access,” Sen. Mike Enzi (R-Wyo.), chair of the Senate Health, Education, Labor, and Pensions Committee, said at a hearing on FDA oversight. “Congress needs to engage in strong oversight to maintain public confidence in the FDA.”

Sandra Kweder, M.D., deputy director of the Office of New Drugs at the FDA's Center for Drug Evaluation and Research, told the Senate committee that in order to ensure drug safety, it would be helpful if the FDA had more clout. She noted that it took a lot of back-and-forth haggling just to get some earlier warnings added to the label.

“The most important lapse [with the safety concerns surrounding Vioxx] was the delay it took to get the information into the labeling; it took over a year,” she said. “I think stronger ability to require changes in labeling would be very helpful.”

The committee's ranking member, Sen. Edward Kennedy (D-Mass.), also spoke in favor of giving the agency greater labeling authority. “The FDA needs clear authority to require relabeling of a drug after approval once a risk is found,” he said. “Negotiations with the drug company should never delay [that].”

Some observers said that although giving the agency more authority over label changes is a good idea, it only goes so far. “We all know product labeling does not change provider behavior very much,” said Arthur Levin, director of the Center for Medical Consumers in New York and the consumer representative on the FDA's Drug Safety and Risk Management advisory committee. Even if FDA does get more labeling authority, “we shouldn't count on it protecting the public from harm,” Mr. Levin said at a teleconference announcing the release of a new survey on consumer attitudes toward the FDA.

The survey of 1,000 adults nationwide was performed by pollster Celinda Lake and sponsored by a coalition of consumer groups. The results showed that only 14% of respondents had a great deal of confidence in the agency's ability to ensure the safety of prescription drugs. And 48% of respondents believed the FDA was too influenced by the industries over which it has jurisdiction.

Another subject discussed at the Senate hearing was the secrecy of clinical trial data. “I'd like to emphasize the importance of open access to data from clinical trials, including negative trials and unpublished research,” David Fassler, M.D., a child and adolescent psychiatrist in Burlington, Vt., who testified on behalf of the American Academy of Child and Adolescent Psychiatry and the American Psychiatric Association.

In 2004, when Dr. Fassler testified on the question of whether there was a link between selective serotonin reuptake inhibitors (SSRIs) and suicide, “there were only four studies in the published literature on [the use of] SSRIs in adolescents. But I later learned that there were 11 unpublished studies whose results had been submitted to FDA. Parents clearly need access to this kind of evidence.”

WASHINGTON — Consumer-driven health care may be the “next big thing” in health insurance, but it won't go anywhere until more data on plans, providers, and outcomes become available, George Halvorson said at a health care congress sponsored by the Wall Street Journal and CNBC.

“It's time for an industrial revolution in health care,” said Mr. Halvorson, chairman and CEO of Kaiser Foundation Health Plan, Oakland, Calif. “We need to set a much higher standard for ourselves as an industry.”

He noted that many major and expensive trends in care “too often lack scientific backing,” citing the examples of hormone therapy for heart attack prevention in women, knee surgery to relieve osteoporosis pain, and cyclooxygenase-2 (COX-2) inhibitors for arthritis pain, where the therapy turned out not to work as well as expected.

“These are significant issues. Because there's no consistent database in health care, people did not realize this kind of outcome was happening with something that was a very popular treatment,” he said.

Mr. Halvorson recommended that health care executives follow the example of other industries that have turned themselves around.

For example, General Electric instituted a program of “measure, analyze, improve, and control” to weed out errors in its manufacturing process.

Health care doesn't do any of those four steps with any great consistency, Mr. Halvorson continued. “Where does health care get the data that are used? We get it from paper medical records, which are not even complete per patient.”

For instance, he said, “we have one patient, four doctors—four unrelated, unconnected, noncommunicative, nonintuitive, noninteractive, too often inaccessible, and often illegible, paper medical records from which to derive the database.”

In addition to the well-known data-collection tools such as electronic medical records (EMRs) and computerized physician order-entry systems, the health care system also should be systematically collecting other information, such as whether patients fill their prescriptions, Mr. Halvorson said.

Another subject about which more data are needed is the hospital shift change, “the most dangerous time to be in the hospital,” he said.

“It takes an average 43 minutes to do a shift change [and exchange information about patients], and during that time, patients are hitting their buzzer and taking their own steps to the restroom and falling,” Mr. Halvorson said. “This is literally when accidents happen. And the information transferred in that process is not all that accurate. By automating that process, you can take the shift change from 43 minutes down to 12, improve patient safety, and significantly improve the quality and accuracy of data that are involved.”

Although the United States health care system is better than it's ever been, and the technology is better than it has ever been, “we will not be able to realize the full potential of it until we can get an information flow, and the flow has to come from an EMR,” Mr. Halvorson said. He added that a single nationwide EMR system would not be necessary as long as local systems could transport data to one another if needed.

To make data collection part of the national agenda, the impetus needs to come from a large government program like Medicare, according to Mr. Halvorson. “Medicare is the key, and hospitals are the leverage point,” he said. “Medicare accounts for about 40% of hospital revenue. If Medicare decided to do this, it could make this happen with a rewards system … relatively quickly. Investment dollars are needed, and Medicare needs to support that.”

WASHINGTON — Consumer-driven health care may be the “next big thing” in health insurance, but it won't go anywhere until more data on plans, providers, and outcomes become available, George Halvorson said at a health care congress sponsored by the Wall Street Journal and CNBC.

“It's time for an industrial revolution in health care,” said Mr. Halvorson, chairman and CEO of Kaiser Foundation Health Plan, Oakland, Calif. “We need to set a much higher standard for ourselves as an industry.”

He noted that many major and expensive trends in care “too often lack scientific backing,” citing the examples of hormone therapy for heart attack prevention in women, knee surgery to relieve osteoporosis pain, and cyclooxygenase-2 (COX-2) inhibitors for arthritis pain, where the therapy turned out not to work as well as expected.

“These are significant issues. Because there's no consistent database in health care, people did not realize this kind of outcome was happening with something that was a very popular treatment,” he said.

Mr. Halvorson recommended that health care executives follow the example of other industries that have turned themselves around.

For example, General Electric instituted a program of “measure, analyze, improve, and control” to weed out errors in its manufacturing process.

Health care doesn't do any of those four steps with any great consistency, Mr. Halvorson continued. “Where does health care get the data that are used? We get it from paper medical records, which are not even complete per patient.”

For instance, he said, “we have one patient, four doctors—four unrelated, unconnected, noncommunicative, nonintuitive, noninteractive, too often inaccessible, and often illegible, paper medical records from which to derive the database.”

In addition to the well-known data-collection tools such as electronic medical records (EMRs) and computerized physician order-entry systems, the health care system also should be systematically collecting other information, such as whether patients fill their prescriptions, Mr. Halvorson said.

Another subject about which more data are needed is the hospital shift change, “the most dangerous time to be in the hospital,” he said.

“It takes an average 43 minutes to do a shift change [and exchange information about patients], and during that time, patients are hitting their buzzer and taking their own steps to the restroom and falling,” Mr. Halvorson said. “This is literally when accidents happen. And the information transferred in that process is not all that accurate. By automating that process, you can take the shift change from 43 minutes down to 12, improve patient safety, and significantly improve the quality and accuracy of data that are involved.”

Although the United States health care system is better than it's ever been, and the technology is better than it has ever been, “we will not be able to realize the full potential of it until we can get an information flow, and the flow has to come from an EMR,” Mr. Halvorson said. He added that a single nationwide EMR system would not be necessary as long as local systems could transport data to one another if needed.

To make data collection part of the national agenda, the impetus needs to come from a large government program like Medicare, according to Mr. Halvorson. “Medicare is the key, and hospitals are the leverage point,” he said. “Medicare accounts for about 40% of hospital revenue. If Medicare decided to do this, it could make this happen with a rewards system … relatively quickly. Investment dollars are needed, and Medicare needs to support that.”

WASHINGTON — Consumer-driven health care may be the “next big thing” in health insurance, but it won't go anywhere until more data on plans, providers, and outcomes become available, George Halvorson said at a health care congress sponsored by the Wall Street Journal and CNBC.

“It's time for an industrial revolution in health care,” said Mr. Halvorson, chairman and CEO of Kaiser Foundation Health Plan, Oakland, Calif. “We need to set a much higher standard for ourselves as an industry.”

He noted that many major and expensive trends in care “too often lack scientific backing,” citing the examples of hormone therapy for heart attack prevention in women, knee surgery to relieve osteoporosis pain, and cyclooxygenase-2 (COX-2) inhibitors for arthritis pain, where the therapy turned out not to work as well as expected.

“These are significant issues. Because there's no consistent database in health care, people did not realize this kind of outcome was happening with something that was a very popular treatment,” he said.

Mr. Halvorson recommended that health care executives follow the example of other industries that have turned themselves around.

For example, General Electric instituted a program of “measure, analyze, improve, and control” to weed out errors in its manufacturing process.

Health care doesn't do any of those four steps with any great consistency, Mr. Halvorson continued. “Where does health care get the data that are used? We get it from paper medical records, which are not even complete per patient.”

For instance, he said, “we have one patient, four doctors—four unrelated, unconnected, noncommunicative, nonintuitive, noninteractive, too often inaccessible, and often illegible, paper medical records from which to derive the database.”

In addition to the well-known data-collection tools such as electronic medical records (EMRs) and computerized physician order-entry systems, the health care system also should be systematically collecting other information, such as whether patients fill their prescriptions, Mr. Halvorson said.

Another subject about which more data are needed is the hospital shift change, “the most dangerous time to be in the hospital,” he said.

“It takes an average 43 minutes to do a shift change [and exchange information about patients], and during that time, patients are hitting their buzzer and taking their own steps to the restroom and falling,” Mr. Halvorson said. “This is literally when accidents happen. And the information transferred in that process is not all that accurate. By automating that process, you can take the shift change from 43 minutes down to 12, improve patient safety, and significantly improve the quality and accuracy of data that are involved.”

Although the United States health care system is better than it's ever been, and the technology is better than it has ever been, “we will not be able to realize the full potential of it until we can get an information flow, and the flow has to come from an EMR,” Mr. Halvorson said. He added that a single nationwide EMR system would not be necessary as long as local systems could transport data to one another if needed.

To make data collection part of the national agenda, the impetus needs to come from a large government program like Medicare, according to Mr. Halvorson. “Medicare is the key, and hospitals are the leverage point,” he said. “Medicare accounts for about 40% of hospital revenue. If Medicare decided to do this, it could make this happen with a rewards system … relatively quickly. Investment dollars are needed, and Medicare needs to support that.”

WASHINGTON — Consumer-driven health care may be all the rage right now, but there's no single cure for the nation's ailing health care system, several experts said at a health care congress sponsored by the Wall Street Journal and CNBC.

“There are no silver bullets,” said Douglas Holtz-Eakin, Ph.D., director of the Congressional Budget Office (CBO). “There is no single item—technology, disease management, tort law—that is likely to prove to be the answer to aligning incentives, providing high-quality care at reasonable costs, and financing it in a way that's economically viable. More likely, we'll have a series of incremental changes” that will shore up the system.

“Rising health care costs represent the central domestic issue at this time,” Dr. Holtz-Eakin said. For example, over the next 50 years, if nothing is done, “the cost of Medicare and Medicaid will rise from 4% of the gross domestic product to 20%—the current size of the entire federal budget.”

Because the population is aging, “we indeed may spend more than we do now” on health care, Dr. Holtz-Eakin continued. “But the key issue is to make sure we do not overspend, that the dollars per unit of high-quality care match up with our desires.”

Robert Reischauer, Ph.D., a former CBO director who is now president of the Urban Institute, noted that Medicare was a particular concern, since Medicare spending is expected to grow very rapidly over the next 10 years. He listed four possible solutions for the Medicare budget crisis.

The first possibility is to reduce the scope of coverage, but “that isn't a practical course of action,” he said. “All forces are moving in just the opposite direction.”

Another option is to restrain the growth in payments to providers, but already, Medicare is considered “not too generous,” compared with private payers, since it pays on average only about 80% of the private rate. “[Payment restraint] is clearly not going to happen,” he said.

The third option is to make beneficiaries pay more for care in the form of higher premiums, deductibles, and cost sharing.

“Some people think that will cause beneficiaries to purchase more rationally and cut out low-value services, but we have to remember, the vast bulk of spending is on individuals who are very sick, have many chronic conditions, and aren't in a position to comparison-shop,” he said. “Moreover, the services that they're purchasing are extremely complex and confusing, and providers play a very significant role in determining the demand for and type of services received by beneficiaries.

“Before we bet the ranch on this approach,” he continued, “we're going to have to see what happens to spending patterns among the under-65 population as they are faced with high-deductible plans, health savings accounts, consumer-driven health plans, and other approaches to incentivize them to purchase more rationally. If this proves to be a successful approach for the under-65 population, one can see it gradually angling into the bag of tools that Medicare has.”

However, Dr. Reischauer noted, the potential for shifting more costs onto beneficiaries is limited, “because they already spend a considerable amount of their incomes on Medicare cost-sharing of one sort or another. By 2025, the average 65-year-old Medicare beneficiary will be paying more than the size of their Social Security check in cost-sharing and deductibles.”

A fourth approach is to restructure Medicare in ways to generate competition among providers, Dr. Reischauer said. This would mean emphasizing technologies that improve efficiency, such as electronic health records and electronic prescribing. It also would involve decreasing the volume of unneeded services being provided.

He noted that researchers at Dartmouth University have looked at health care utilization across geographic areas and found that beneficiaries receiving higher volumes of services generally have poorer health outcomes, even after differences in their health status are accounted for.

“It's conceivable that as our ability to measure differences in quality and to reward quality effectively improves, the Medicare system could be transformed into one that pays only for care which is both necessary and beneficial, but this is likely to be a long and difficult row to hoe,” he said.

Gail Wilensky, a former administrator of the Centers for Medicare and Medicaid Services who is now a senior fellow at Project HOPE, in Bethesda, Md., expressed disappointment that Congress did not do more to address the issue of rising costs when it passed the Medicare Modernization Act of 2003.

That law “is a good example of eating dessert first,” she said. “There was an opportunity to try and slow down spending in a significant way while a new benefit was being introduced, but primarily, what [the law] does is provide a new benefit and some additional payments to providers of services, but not very much in terms of trying to restructure Medicare for the future.”

One little-known provision of the law does attempt to address the cost issue, she added. “Starting in 2007, Part B will be much more related to income. The subsidy will start declining significantly for those with higher incomes. As the baby boomers begin to retire, some of them with higher incomes and assets, this is at least one opportunity” to help with the cost problem.

Americans are going to need to rethink the entire issue of retirement, Dr. Wilensky predicted.

“A couple of weeks ago, [Rep.] Bill Thomas [R-Calif.] talked about the need to think about Social Security and Medicare together. Both represent transfers from the working population to the dependent, nonworking population. To begin thinking about this as a joint issue may allow us to make more sensible decisions,” she said.

For example, Americans should consider “how we can change both fiscal policies and cultural expectations so our whole concept of retirement begins to … reflect the increasing longevity and, for many individuals, the increased well-being and health status they have at age 65 relative to what 65 meant when Medicare was introduced in 1965,” she said. “We need to think about fiscal policies to encourage continued labor force participation for people at 65 and 70.”

WASHINGTON — Consumer-driven health care may be all the rage right now, but there's no single cure for the nation's ailing health care system, several experts said at a health care congress sponsored by the Wall Street Journal and CNBC.

“There are no silver bullets,” said Douglas Holtz-Eakin, Ph.D., director of the Congressional Budget Office (CBO). “There is no single item—technology, disease management, tort law—that is likely to prove to be the answer to aligning incentives, providing high-quality care at reasonable costs, and financing it in a way that's economically viable. More likely, we'll have a series of incremental changes” that will shore up the system.

“Rising health care costs represent the central domestic issue at this time,” Dr. Holtz-Eakin said. For example, over the next 50 years, if nothing is done, “the cost of Medicare and Medicaid will rise from 4% of the gross domestic product to 20%—the current size of the entire federal budget.”

Because the population is aging, “we indeed may spend more than we do now” on health care, Dr. Holtz-Eakin continued. “But the key issue is to make sure we do not overspend, that the dollars per unit of high-quality care match up with our desires.”

Robert Reischauer, Ph.D., a former CBO director who is now president of the Urban Institute, noted that Medicare was a particular concern, since Medicare spending is expected to grow very rapidly over the next 10 years. He listed four possible solutions for the Medicare budget crisis.

The first possibility is to reduce the scope of coverage, but “that isn't a practical course of action,” he said. “All forces are moving in just the opposite direction.”

Another option is to restrain the growth in payments to providers, but already, Medicare is considered “not too generous,” compared with private payers, since it pays on average only about 80% of the private rate. “[Payment restraint] is clearly not going to happen,” he said.

The third option is to make beneficiaries pay more for care in the form of higher premiums, deductibles, and cost sharing.

“Some people think that will cause beneficiaries to purchase more rationally and cut out low-value services, but we have to remember, the vast bulk of spending is on individuals who are very sick, have many chronic conditions, and aren't in a position to comparison-shop,” he said. “Moreover, the services that they're purchasing are extremely complex and confusing, and providers play a very significant role in determining the demand for and type of services received by beneficiaries.

“Before we bet the ranch on this approach,” he continued, “we're going to have to see what happens to spending patterns among the under-65 population as they are faced with high-deductible plans, health savings accounts, consumer-driven health plans, and other approaches to incentivize them to purchase more rationally. If this proves to be a successful approach for the under-65 population, one can see it gradually angling into the bag of tools that Medicare has.”

However, Dr. Reischauer noted, the potential for shifting more costs onto beneficiaries is limited, “because they already spend a considerable amount of their incomes on Medicare cost-sharing of one sort or another. By 2025, the average 65-year-old Medicare beneficiary will be paying more than the size of their Social Security check in cost-sharing and deductibles.”

A fourth approach is to restructure Medicare in ways to generate competition among providers, Dr. Reischauer said. This would mean emphasizing technologies that improve efficiency, such as electronic health records and electronic prescribing. It also would involve decreasing the volume of unneeded services being provided.

He noted that researchers at Dartmouth University have looked at health care utilization across geographic areas and found that beneficiaries receiving higher volumes of services generally have poorer health outcomes, even after differences in their health status are accounted for.

“It's conceivable that as our ability to measure differences in quality and to reward quality effectively improves, the Medicare system could be transformed into one that pays only for care which is both necessary and beneficial, but this is likely to be a long and difficult row to hoe,” he said.

Gail Wilensky, a former administrator of the Centers for Medicare and Medicaid Services who is now a senior fellow at Project HOPE, in Bethesda, Md., expressed disappointment that Congress did not do more to address the issue of rising costs when it passed the Medicare Modernization Act of 2003.

That law “is a good example of eating dessert first,” she said. “There was an opportunity to try and slow down spending in a significant way while a new benefit was being introduced, but primarily, what [the law] does is provide a new benefit and some additional payments to providers of services, but not very much in terms of trying to restructure Medicare for the future.”

One little-known provision of the law does attempt to address the cost issue, she added. “Starting in 2007, Part B will be much more related to income. The subsidy will start declining significantly for those with higher incomes. As the baby boomers begin to retire, some of them with higher incomes and assets, this is at least one opportunity” to help with the cost problem.

Americans are going to need to rethink the entire issue of retirement, Dr. Wilensky predicted.

“A couple of weeks ago, [Rep.] Bill Thomas [R-Calif.] talked about the need to think about Social Security and Medicare together. Both represent transfers from the working population to the dependent, nonworking population. To begin thinking about this as a joint issue may allow us to make more sensible decisions,” she said.

For example, Americans should consider “how we can change both fiscal policies and cultural expectations so our whole concept of retirement begins to … reflect the increasing longevity and, for many individuals, the increased well-being and health status they have at age 65 relative to what 65 meant when Medicare was introduced in 1965,” she said. “We need to think about fiscal policies to encourage continued labor force participation for people at 65 and 70.”

WASHINGTON — Consumer-driven health care may be all the rage right now, but there's no single cure for the nation's ailing health care system, several experts said at a health care congress sponsored by the Wall Street Journal and CNBC.

“There are no silver bullets,” said Douglas Holtz-Eakin, Ph.D., director of the Congressional Budget Office (CBO). “There is no single item—technology, disease management, tort law—that is likely to prove to be the answer to aligning incentives, providing high-quality care at reasonable costs, and financing it in a way that's economically viable. More likely, we'll have a series of incremental changes” that will shore up the system.

“Rising health care costs represent the central domestic issue at this time,” Dr. Holtz-Eakin said. For example, over the next 50 years, if nothing is done, “the cost of Medicare and Medicaid will rise from 4% of the gross domestic product to 20%—the current size of the entire federal budget.”

Because the population is aging, “we indeed may spend more than we do now” on health care, Dr. Holtz-Eakin continued. “But the key issue is to make sure we do not overspend, that the dollars per unit of high-quality care match up with our desires.”

Robert Reischauer, Ph.D., a former CBO director who is now president of the Urban Institute, noted that Medicare was a particular concern, since Medicare spending is expected to grow very rapidly over the next 10 years. He listed four possible solutions for the Medicare budget crisis.

The first possibility is to reduce the scope of coverage, but “that isn't a practical course of action,” he said. “All forces are moving in just the opposite direction.”

Another option is to restrain the growth in payments to providers, but already, Medicare is considered “not too generous,” compared with private payers, since it pays on average only about 80% of the private rate. “[Payment restraint] is clearly not going to happen,” he said.

The third option is to make beneficiaries pay more for care in the form of higher premiums, deductibles, and cost sharing.

“Some people think that will cause beneficiaries to purchase more rationally and cut out low-value services, but we have to remember, the vast bulk of spending is on individuals who are very sick, have many chronic conditions, and aren't in a position to comparison-shop,” he said. “Moreover, the services that they're purchasing are extremely complex and confusing, and providers play a very significant role in determining the demand for and type of services received by beneficiaries.

“Before we bet the ranch on this approach,” he continued, “we're going to have to see what happens to spending patterns among the under-65 population as they are faced with high-deductible plans, health savings accounts, consumer-driven health plans, and other approaches to incentivize them to purchase more rationally. If this proves to be a successful approach for the under-65 population, one can see it gradually angling into the bag of tools that Medicare has.”

However, Dr. Reischauer noted, the potential for shifting more costs onto beneficiaries is limited, “because they already spend a considerable amount of their incomes on Medicare cost-sharing of one sort or another. By 2025, the average 65-year-old Medicare beneficiary will be paying more than the size of their Social Security check in cost-sharing and deductibles.”

A fourth approach is to restructure Medicare in ways to generate competition among providers, Dr. Reischauer said. This would mean emphasizing technologies that improve efficiency, such as electronic health records and electronic prescribing. It also would involve decreasing the volume of unneeded services being provided.

He noted that researchers at Dartmouth University have looked at health care utilization across geographic areas and found that beneficiaries receiving higher volumes of services generally have poorer health outcomes, even after differences in their health status are accounted for.

“It's conceivable that as our ability to measure differences in quality and to reward quality effectively improves, the Medicare system could be transformed into one that pays only for care which is both necessary and beneficial, but this is likely to be a long and difficult row to hoe,” he said.

Gail Wilensky, a former administrator of the Centers for Medicare and Medicaid Services who is now a senior fellow at Project HOPE, in Bethesda, Md., expressed disappointment that Congress did not do more to address the issue of rising costs when it passed the Medicare Modernization Act of 2003.

That law “is a good example of eating dessert first,” she said. “There was an opportunity to try and slow down spending in a significant way while a new benefit was being introduced, but primarily, what [the law] does is provide a new benefit and some additional payments to providers of services, but not very much in terms of trying to restructure Medicare for the future.”

One little-known provision of the law does attempt to address the cost issue, she added. “Starting in 2007, Part B will be much more related to income. The subsidy will start declining significantly for those with higher incomes. As the baby boomers begin to retire, some of them with higher incomes and assets, this is at least one opportunity” to help with the cost problem.

Americans are going to need to rethink the entire issue of retirement, Dr. Wilensky predicted.

“A couple of weeks ago, [Rep.] Bill Thomas [R-Calif.] talked about the need to think about Social Security and Medicare together. Both represent transfers from the working population to the dependent, nonworking population. To begin thinking about this as a joint issue may allow us to make more sensible decisions,” she said.

For example, Americans should consider “how we can change both fiscal policies and cultural expectations so our whole concept of retirement begins to … reflect the increasing longevity and, for many individuals, the increased well-being and health status they have at age 65 relative to what 65 meant when Medicare was introduced in 1965,” she said. “We need to think about fiscal policies to encourage continued labor force participation for people at 65 and 70.”

WASHINGTON — People who have suffered adverse outcomes due to drugs or medical devices may face more delays in suing manufacturers for damages now that federal class-action lawsuit legislation has been signed into law.

The law, known as the Class Action Fairness Act of 2005, would move from state court to federal court any class-action lawsuit in which the amount of damages claimed was greater than $5 million and involved citizens in different states. The law also outlines circumstances in which federal courts can decline to hear class-action cases.

Proponents of the law, which passed in both the House and Senate in record time, say that it will help decrease the number of “junk lawsuits” that are clogging up the state courts.

“America's employers and consumers are the big winners,” Tom Donohue, president and CEO of the U.S. Chamber of Commerce, said in a statement. “Reform of the class action lawsuit system will reduce frivolous lawsuits, spur business investment, and help restore sanity to our nation's legal system.”

Critics of the bill, however, say that it will deprive citizens of their right to sue when they are injured by a defective product. “There are only 678 federal trial judges in the system, but there are 9,200 state judges in courts of general jurisdiction,” said Jillian Aldebron, counsel and communications coordinator for Public Citizen's Congress Watch, a citizen watchdog group. “So you're talking about cases ordinarily divided up among 9,200 judges and squeezing them into the courtrooms of 678 judges. Even if they are willing to hear the cases, it's going to take years, and these cases take years in state court [already].”

Many physician organizations, including the American Medical Association and the American College of Physicians, have declined to take a stand on the bill; their efforts are more focused on tort reform legislation affecting medical malpractice cases. But a few consumer groups, such as the Campaign for Tobacco-Free Kids, lamented the effect the bill would have on health care-related cases.

“Class-action lawsuits have been an important tool in efforts to hold the tobacco industry accountable,” the group's president, Matthew L. Myers, said in a statement. “This bill will deprive citizens of a state of the right to have their cases heard in their own courts, further overburden the federal courts, and make it more difficult for tobacco companies to be held accountable for years of misleading Americans about the dangers of tobacco.”

Senior citizens' lobby AARP also opposed the bill. “We felt that there wasn't an adequate basis for consumers no longer having the option of bringing a multistate case in state court,” said Larry White, senior legislative representative. “We acknowledge there are abuses on both sides in the system, but when you in essence say that the federal courts will have jurisdiction of these cases … knowing the federal courts oftentimes don't certify those cases, you're in essence saying people who have been genuinely harmed don't have options.”

According to the Bush administration, the law will help consumers. “The bill will remove significant burdens on class-action litigants and provide greater protections for the victims whom the class-action device originally was designed to benefit,” the administration said in a statement.

The law would affect only cases filed after the bill was signed, noted Ms. Aldebron.

WASHINGTON — People who have suffered adverse outcomes due to drugs or medical devices may face more delays in suing manufacturers for damages now that federal class-action lawsuit legislation has been signed into law.

The law, known as the Class Action Fairness Act of 2005, would move from state court to federal court any class-action lawsuit in which the amount of damages claimed was greater than $5 million and involved citizens in different states. The law also outlines circumstances in which federal courts can decline to hear class-action cases.

Proponents of the law, which passed in both the House and Senate in record time, say that it will help decrease the number of “junk lawsuits” that are clogging up the state courts.

“America's employers and consumers are the big winners,” Tom Donohue, president and CEO of the U.S. Chamber of Commerce, said in a statement. “Reform of the class action lawsuit system will reduce frivolous lawsuits, spur business investment, and help restore sanity to our nation's legal system.”

Critics of the bill, however, say that it will deprive citizens of their right to sue when they are injured by a defective product. “There are only 678 federal trial judges in the system, but there are 9,200 state judges in courts of general jurisdiction,” said Jillian Aldebron, counsel and communications coordinator for Public Citizen's Congress Watch, a citizen watchdog group. “So you're talking about cases ordinarily divided up among 9,200 judges and squeezing them into the courtrooms of 678 judges. Even if they are willing to hear the cases, it's going to take years, and these cases take years in state court [already].”

Many physician organizations, including the American Medical Association and the American College of Physicians, have declined to take a stand on the bill; their efforts are more focused on tort reform legislation affecting medical malpractice cases. But a few consumer groups, such as the Campaign for Tobacco-Free Kids, lamented the effect the bill would have on health care-related cases.

“Class-action lawsuits have been an important tool in efforts to hold the tobacco industry accountable,” the group's president, Matthew L. Myers, said in a statement. “This bill will deprive citizens of a state of the right to have their cases heard in their own courts, further overburden the federal courts, and make it more difficult for tobacco companies to be held accountable for years of misleading Americans about the dangers of tobacco.”

Senior citizens' lobby AARP also opposed the bill. “We felt that there wasn't an adequate basis for consumers no longer having the option of bringing a multistate case in state court,” said Larry White, senior legislative representative. “We acknowledge there are abuses on both sides in the system, but when you in essence say that the federal courts will have jurisdiction of these cases … knowing the federal courts oftentimes don't certify those cases, you're in essence saying people who have been genuinely harmed don't have options.”

According to the Bush administration, the law will help consumers. “The bill will remove significant burdens on class-action litigants and provide greater protections for the victims whom the class-action device originally was designed to benefit,” the administration said in a statement.

The law would affect only cases filed after the bill was signed, noted Ms. Aldebron.

WASHINGTON — People who have suffered adverse outcomes due to drugs or medical devices may face more delays in suing manufacturers for damages now that federal class-action lawsuit legislation has been signed into law.

The law, known as the Class Action Fairness Act of 2005, would move from state court to federal court any class-action lawsuit in which the amount of damages claimed was greater than $5 million and involved citizens in different states. The law also outlines circumstances in which federal courts can decline to hear class-action cases.

Proponents of the law, which passed in both the House and Senate in record time, say that it will help decrease the number of “junk lawsuits” that are clogging up the state courts.

“America's employers and consumers are the big winners,” Tom Donohue, president and CEO of the U.S. Chamber of Commerce, said in a statement. “Reform of the class action lawsuit system will reduce frivolous lawsuits, spur business investment, and help restore sanity to our nation's legal system.”

Critics of the bill, however, say that it will deprive citizens of their right to sue when they are injured by a defective product. “There are only 678 federal trial judges in the system, but there are 9,200 state judges in courts of general jurisdiction,” said Jillian Aldebron, counsel and communications coordinator for Public Citizen's Congress Watch, a citizen watchdog group. “So you're talking about cases ordinarily divided up among 9,200 judges and squeezing them into the courtrooms of 678 judges. Even if they are willing to hear the cases, it's going to take years, and these cases take years in state court [already].”

Many physician organizations, including the American Medical Association and the American College of Physicians, have declined to take a stand on the bill; their efforts are more focused on tort reform legislation affecting medical malpractice cases. But a few consumer groups, such as the Campaign for Tobacco-Free Kids, lamented the effect the bill would have on health care-related cases.

“Class-action lawsuits have been an important tool in efforts to hold the tobacco industry accountable,” the group's president, Matthew L. Myers, said in a statement. “This bill will deprive citizens of a state of the right to have their cases heard in their own courts, further overburden the federal courts, and make it more difficult for tobacco companies to be held accountable for years of misleading Americans about the dangers of tobacco.”

Senior citizens' lobby AARP also opposed the bill. “We felt that there wasn't an adequate basis for consumers no longer having the option of bringing a multistate case in state court,” said Larry White, senior legislative representative. “We acknowledge there are abuses on both sides in the system, but when you in essence say that the federal courts will have jurisdiction of these cases … knowing the federal courts oftentimes don't certify those cases, you're in essence saying people who have been genuinely harmed don't have options.”

According to the Bush administration, the law will help consumers. “The bill will remove significant burdens on class-action litigants and provide greater protections for the victims whom the class-action device originally was designed to benefit,” the administration said in a statement.

The law would affect only cases filed after the bill was signed, noted Ms. Aldebron.

SCOTTSDALE, ARIZ. — People who are emotionally and physically abused by their intimate partners develop more mental illness and substance abuse than those who are only physically abused, Susan Ditter, M.D., said at the annual meeting of the American Academy of Psychiatry and the Law.

“Emotional abuse is not well studied, [but] it precedes and predicts physical aggression in marriage,” said Dr. Ditter, a forensic psychiatry fellow at the University of Virginia, Charlottesville. “It can occur without physical abuse, but the converse is rare.”

She and her colleagues looked at data from the National Violence Against Women Survey, a random-digit-dial phone survey of households nationwide. The survey, conducted from November 1995 to May 1996, included responses from 8,000 men and 8,000 women, all aged 18 years and older. All respondents were either currently married, formerly married, or in a cohabiting heterosexual relationship.

Dr. Ditter and her associates distinguished between two subtypes of emotional abuse: verbal abuse, which involves verbal attacks and degrading behaviors, and power-and-control abuse, in which the victim is isolated and forced into traditional sex roles. They found that 25% of men and 27% of women had experienced verbal abuse, while 12% of men and 20% of women had experienced power-and-control abuse.

The risk of emotional abuse increased in low income, less educated, uninsured, unemployed, divorced, or single people, Dr. Ditter said. Widowed men were at higher risk for emotional abuse than widowed women.

The researchers also found that those who had experienced emotional abuse along with other types of intimate partner violence had more depression, serious mental illness, illicit drug use, and antidepressant treatment than those who experienced the violence without emotional abuse.

Overall, men were more likely to experience only emotional abuse than were women, while women experienced more power-and-control abuse along with other types of partner violence. Men who experienced only verbal abuse were much more likely to carry a gun for protection (adjusted relative risk, 4.77) than were women in that category (aRR, 0.22), Dr. Ditter said.

There were several limitations in the study, according to Dr. Ditter. She noted that it was a cross-sectional survey, so causation could not be assessed. In addition, the emotional abuse measures were not widely standardized for reliability and validity, and there were limited measures for mental health history and treatment.

Other studies support the harmfulness of emotional abuse. One study found that 6 months after leaving their partners, all of the 25 emotional abuse subjects studied had three sequelae of “battered woman's syndrome,” including trauma symptoms, low self-esteem, and a paradoxical attachment to the former partner. In another study, victims of even severe intimate partner violence reported psychological humiliation as their worst battering experience.

SCOTTSDALE, ARIZ. — People who are emotionally and physically abused by their intimate partners develop more mental illness and substance abuse than those who are only physically abused, Susan Ditter, M.D., said at the annual meeting of the American Academy of Psychiatry and the Law.

“Emotional abuse is not well studied, [but] it precedes and predicts physical aggression in marriage,” said Dr. Ditter, a forensic psychiatry fellow at the University of Virginia, Charlottesville. “It can occur without physical abuse, but the converse is rare.”

She and her colleagues looked at data from the National Violence Against Women Survey, a random-digit-dial phone survey of households nationwide. The survey, conducted from November 1995 to May 1996, included responses from 8,000 men and 8,000 women, all aged 18 years and older. All respondents were either currently married, formerly married, or in a cohabiting heterosexual relationship.

Dr. Ditter and her associates distinguished between two subtypes of emotional abuse: verbal abuse, which involves verbal attacks and degrading behaviors, and power-and-control abuse, in which the victim is isolated and forced into traditional sex roles. They found that 25% of men and 27% of women had experienced verbal abuse, while 12% of men and 20% of women had experienced power-and-control abuse.

The risk of emotional abuse increased in low income, less educated, uninsured, unemployed, divorced, or single people, Dr. Ditter said. Widowed men were at higher risk for emotional abuse than widowed women.

The researchers also found that those who had experienced emotional abuse along with other types of intimate partner violence had more depression, serious mental illness, illicit drug use, and antidepressant treatment than those who experienced the violence without emotional abuse.

Overall, men were more likely to experience only emotional abuse than were women, while women experienced more power-and-control abuse along with other types of partner violence. Men who experienced only verbal abuse were much more likely to carry a gun for protection (adjusted relative risk, 4.77) than were women in that category (aRR, 0.22), Dr. Ditter said.

There were several limitations in the study, according to Dr. Ditter. She noted that it was a cross-sectional survey, so causation could not be assessed. In addition, the emotional abuse measures were not widely standardized for reliability and validity, and there were limited measures for mental health history and treatment.

Other studies support the harmfulness of emotional abuse. One study found that 6 months after leaving their partners, all of the 25 emotional abuse subjects studied had three sequelae of “battered woman's syndrome,” including trauma symptoms, low self-esteem, and a paradoxical attachment to the former partner. In another study, victims of even severe intimate partner violence reported psychological humiliation as their worst battering experience.

SCOTTSDALE, ARIZ. — People who are emotionally and physically abused by their intimate partners develop more mental illness and substance abuse than those who are only physically abused, Susan Ditter, M.D., said at the annual meeting of the American Academy of Psychiatry and the Law.

“Emotional abuse is not well studied, [but] it precedes and predicts physical aggression in marriage,” said Dr. Ditter, a forensic psychiatry fellow at the University of Virginia, Charlottesville. “It can occur without physical abuse, but the converse is rare.”

She and her colleagues looked at data from the National Violence Against Women Survey, a random-digit-dial phone survey of households nationwide. The survey, conducted from November 1995 to May 1996, included responses from 8,000 men and 8,000 women, all aged 18 years and older. All respondents were either currently married, formerly married, or in a cohabiting heterosexual relationship.

Dr. Ditter and her associates distinguished between two subtypes of emotional abuse: verbal abuse, which involves verbal attacks and degrading behaviors, and power-and-control abuse, in which the victim is isolated and forced into traditional sex roles. They found that 25% of men and 27% of women had experienced verbal abuse, while 12% of men and 20% of women had experienced power-and-control abuse.

The risk of emotional abuse increased in low income, less educated, uninsured, unemployed, divorced, or single people, Dr. Ditter said. Widowed men were at higher risk for emotional abuse than widowed women.

The researchers also found that those who had experienced emotional abuse along with other types of intimate partner violence had more depression, serious mental illness, illicit drug use, and antidepressant treatment than those who experienced the violence without emotional abuse.

Overall, men were more likely to experience only emotional abuse than were women, while women experienced more power-and-control abuse along with other types of partner violence. Men who experienced only verbal abuse were much more likely to carry a gun for protection (adjusted relative risk, 4.77) than were women in that category (aRR, 0.22), Dr. Ditter said.

There were several limitations in the study, according to Dr. Ditter. She noted that it was a cross-sectional survey, so causation could not be assessed. In addition, the emotional abuse measures were not widely standardized for reliability and validity, and there were limited measures for mental health history and treatment.

Other studies support the harmfulness of emotional abuse. One study found that 6 months after leaving their partners, all of the 25 emotional abuse subjects studied had three sequelae of “battered woman's syndrome,” including trauma symptoms, low self-esteem, and a paradoxical attachment to the former partner. In another study, victims of even severe intimate partner violence reported psychological humiliation as their worst battering experience.

ARLINGTON, VA. — With the annual price tag of biologic agents reaching well into the tens of thousands, pressure to find lower-cost alternatives caused scientists and drug companies to air their concerns at a workshop on biologics becoming generic.

At the heart of the discussions were fundamental questions such as the degree to which follow-on proteins could be judged to be similar enough to already approved agents and how the federal government might compare agents to certify whether a generic was ready for the marketplace.

Brand-name manufacturers argue that generic companies need to do clinical trials to prove interchangeability, and generic firms make the case that good product characterization alone should suffice.

The issue of generic versus brand-name biologics is reminiscent of the fight to get more generic small-molecule drugs on the market in the late 1970s and early 1980s. At that time, generic drug manufacturers could only get approval for their medications if they had independently proved their safety and efficacy, without using any data from the brand-name manufacturer.

Then, in 1984, Congress passed the Drug Price Competition and Patent Term Restoration Act, otherwise known as the Hatch-Waxman Act. This law allowed generic manufacturers to get their drugs approved if they could simply demonstrate that their drug was bioequivalent to the brand-name counterpart. The law also allowed generic drug manufacturers to begin testing a new generic before the patent expired on the brand-name drug.

These changes helped shorten the average length of time between the brand-name drug's expiration and the introduction of the generic from 3 years to 3 months. But the law excluded biologics because there were only a few biologics on the market and because bioequivalence was difficult to prove.

Demonstration of bioequivalence may work really well for determining the comparable safety and efficacy of two chemical generic drugs, “but there's little evidence that this chemical drug paradigm would work for biopharmaceuticals,” said Anthony Lubiniecki, Sc.D., vice-president for technology transfer at Centocor, a brand-name biologic pharmaceutical manufacturer in Radnor, Pa.

The Generic Pharmaceutical Association (GPhA) supports an abbreviated approval process for generic biologics, but at the same time it's recognized that “biopharmaceuticals comprise a continuum of complexity, from relatively simple biopharmaceuticals, such as penicillin, to those that are highly complex. … As such, a one-size-fits-all paradigm for technical and regulatory approaches would be inadequate,” said Gordon Johnston, vice-president for regulatory affairs at GPhA.

Another issue is the potential for patients taking generic biologics to develop immunogenicity, said Dawn Viveash, vice-president for regulatory affairs at Amgen, a biologics manufacturer in Thousand Oaks, Calif. Depending on the individual, such effects can range from “none at all to an allergic or anaphylactic type of reaction, or they may have an impact on clearance, which could reduce efficacy,” she said at the workshop sponsored by the Food and Drug Administration and the Drug Information Association. Many of these issues aren't likely to be settled anytime soon.

The FDA started working on two biologic “guidance documents” on insulin and human growth hormone 4 years ago. At the time, “those documents were expected to be issued within 60 days,” said GPhA's Mr. Johnston. “More than 1,000 days later, we're still waiting.”

The FDA also is developing a general guidance document on the development and approval of generic biologics; however, there is no timeline for issuing the final product, according to Ajaz Hussain, Ph.D., deputy director of the Center for Drug Evaluation and Research's Office of Pharmaceutical Science.

ARLINGTON, VA. — With the annual price tag of biologic agents reaching well into the tens of thousands, pressure to find lower-cost alternatives caused scientists and drug companies to air their concerns at a workshop on biologics becoming generic.

At the heart of the discussions were fundamental questions such as the degree to which follow-on proteins could be judged to be similar enough to already approved agents and how the federal government might compare agents to certify whether a generic was ready for the marketplace.

Brand-name manufacturers argue that generic companies need to do clinical trials to prove interchangeability, and generic firms make the case that good product characterization alone should suffice.

The issue of generic versus brand-name biologics is reminiscent of the fight to get more generic small-molecule drugs on the market in the late 1970s and early 1980s. At that time, generic drug manufacturers could only get approval for their medications if they had independently proved their safety and efficacy, without using any data from the brand-name manufacturer.

Then, in 1984, Congress passed the Drug Price Competition and Patent Term Restoration Act, otherwise known as the Hatch-Waxman Act. This law allowed generic manufacturers to get their drugs approved if they could simply demonstrate that their drug was bioequivalent to the brand-name counterpart. The law also allowed generic drug manufacturers to begin testing a new generic before the patent expired on the brand-name drug.

These changes helped shorten the average length of time between the brand-name drug's expiration and the introduction of the generic from 3 years to 3 months. But the law excluded biologics because there were only a few biologics on the market and because bioequivalence was difficult to prove.

Demonstration of bioequivalence may work really well for determining the comparable safety and efficacy of two chemical generic drugs, “but there's little evidence that this chemical drug paradigm would work for biopharmaceuticals,” said Anthony Lubiniecki, Sc.D., vice-president for technology transfer at Centocor, a brand-name biologic pharmaceutical manufacturer in Radnor, Pa.

The Generic Pharmaceutical Association (GPhA) supports an abbreviated approval process for generic biologics, but at the same time it's recognized that “biopharmaceuticals comprise a continuum of complexity, from relatively simple biopharmaceuticals, such as penicillin, to those that are highly complex. … As such, a one-size-fits-all paradigm for technical and regulatory approaches would be inadequate,” said Gordon Johnston, vice-president for regulatory affairs at GPhA.

Another issue is the potential for patients taking generic biologics to develop immunogenicity, said Dawn Viveash, vice-president for regulatory affairs at Amgen, a biologics manufacturer in Thousand Oaks, Calif. Depending on the individual, such effects can range from “none at all to an allergic or anaphylactic type of reaction, or they may have an impact on clearance, which could reduce efficacy,” she said at the workshop sponsored by the Food and Drug Administration and the Drug Information Association. Many of these issues aren't likely to be settled anytime soon.

The FDA started working on two biologic “guidance documents” on insulin and human growth hormone 4 years ago. At the time, “those documents were expected to be issued within 60 days,” said GPhA's Mr. Johnston. “More than 1,000 days later, we're still waiting.”

The FDA also is developing a general guidance document on the development and approval of generic biologics; however, there is no timeline for issuing the final product, according to Ajaz Hussain, Ph.D., deputy director of the Center for Drug Evaluation and Research's Office of Pharmaceutical Science.

ARLINGTON, VA. — With the annual price tag of biologic agents reaching well into the tens of thousands, pressure to find lower-cost alternatives caused scientists and drug companies to air their concerns at a workshop on biologics becoming generic.

At the heart of the discussions were fundamental questions such as the degree to which follow-on proteins could be judged to be similar enough to already approved agents and how the federal government might compare agents to certify whether a generic was ready for the marketplace.

Brand-name manufacturers argue that generic companies need to do clinical trials to prove interchangeability, and generic firms make the case that good product characterization alone should suffice.

The issue of generic versus brand-name biologics is reminiscent of the fight to get more generic small-molecule drugs on the market in the late 1970s and early 1980s. At that time, generic drug manufacturers could only get approval for their medications if they had independently proved their safety and efficacy, without using any data from the brand-name manufacturer.

Then, in 1984, Congress passed the Drug Price Competition and Patent Term Restoration Act, otherwise known as the Hatch-Waxman Act. This law allowed generic manufacturers to get their drugs approved if they could simply demonstrate that their drug was bioequivalent to the brand-name counterpart. The law also allowed generic drug manufacturers to begin testing a new generic before the patent expired on the brand-name drug.

These changes helped shorten the average length of time between the brand-name drug's expiration and the introduction of the generic from 3 years to 3 months. But the law excluded biologics because there were only a few biologics on the market and because bioequivalence was difficult to prove.

Demonstration of bioequivalence may work really well for determining the comparable safety and efficacy of two chemical generic drugs, “but there's little evidence that this chemical drug paradigm would work for biopharmaceuticals,” said Anthony Lubiniecki, Sc.D., vice-president for technology transfer at Centocor, a brand-name biologic pharmaceutical manufacturer in Radnor, Pa.

The Generic Pharmaceutical Association (GPhA) supports an abbreviated approval process for generic biologics, but at the same time it's recognized that “biopharmaceuticals comprise a continuum of complexity, from relatively simple biopharmaceuticals, such as penicillin, to those that are highly complex. … As such, a one-size-fits-all paradigm for technical and regulatory approaches would be inadequate,” said Gordon Johnston, vice-president for regulatory affairs at GPhA.

Another issue is the potential for patients taking generic biologics to develop immunogenicity, said Dawn Viveash, vice-president for regulatory affairs at Amgen, a biologics manufacturer in Thousand Oaks, Calif. Depending on the individual, such effects can range from “none at all to an allergic or anaphylactic type of reaction, or they may have an impact on clearance, which could reduce efficacy,” she said at the workshop sponsored by the Food and Drug Administration and the Drug Information Association. Many of these issues aren't likely to be settled anytime soon.

The FDA started working on two biologic “guidance documents” on insulin and human growth hormone 4 years ago. At the time, “those documents were expected to be issued within 60 days,” said GPhA's Mr. Johnston. “More than 1,000 days later, we're still waiting.”

The FDA also is developing a general guidance document on the development and approval of generic biologics; however, there is no timeline for issuing the final product, according to Ajaz Hussain, Ph.D., deputy director of the Center for Drug Evaluation and Research's Office of Pharmaceutical Science.

WASHINGTON — The Centers for Medicare and Medicaid Services is jumping on the pay-for-performance bandwagon, but members of a physician advisory group warned CMS officials to be careful how they go about it.

“I'm only hoping that you'll structure this so that the quality indicators will be that you've [performed] certain processes, not necessarily the outcome [of them],” said Laura B. Powers, M.D., a Knoxville, Tenn. neurologist and member of the Practicing Physicians Advisory Council.

For example, outcomes are not useful in terminal patients, Dr. Powers told this newspaper. “What outcome are they going to measure with … a patient who is definitely going to die?” she said. Instead, Medicare should assess whether the physician has followed appropriate standards of care for terminal patients.

Trent Haywood, M.D., acting deputy chief medical officer at the agency, said CMS has debated that very issue. “There has been a lot of discussion about what is the right thing [to measure]. We've always said that we think it's both,” he said. “We definitely want process measures … and the current financial structure is also easier for measuring processes, because that's the way we traditionally pay people.”

However, he added, “our goal is toward getting some evidence of outcomes. The process measures we normally collect are always related to outcomes.”

Council member Peter Grimm, D.O., a radiation oncologist in Seattle, said he believes it is most important to measure outcomes. “You have to have outcomes as the bottom line,” said Dr. Grimm, who runs a quality assurance business involving 300 physicians. “I don't care how people get there. I just care that they get there.”

In his testimony to the council, Dr. Haywood outlined the various steps Medicare is taking to introduce pay for performance into physician reimbursement, including demonstration projects with hospitals and group practices. But Dr. Grimm still was not satisfied.

“One thing I didn't hear is how you verify this [performance] data,” he said. “You have to have a third party evaluate it.”

Geraldine O'Shea, D.O., an internist in Jackson, Calif., said that she is concerned about the impact of pay for performance on the doctor-patient relationship.

“Could it discourage physicians from caring for noncompliant patients?” she asked. “And how do these programs ensure the most up-to-date guidelines are being used? How can we get this out to know that this is the benchmark we're going to be measured at?”

There are different ways to address patient compliance, Dr. Haywood said. “If you lean more heavily on process measures, that takes care of part of that problem, because those process measures look at whether you prescribed something or did something. But because we still want to look at outcomes measurement, we also talk about ways in which you allow that patient to be excluded. You can have documentation saying, 'Provided counseling and patient refused.'”

Council member Barbara McAneney, M.D., an oncologist in Albuquerque, N.M., said she was concerned about the expense of the computer system that would be required for physicians to keep track of their outcomes data.

“The electronic medical record (EMR) that our practice purchased some years ago is now completely inadequate because it's not searchable for tumor stage, size, or treatment,” she said. “So I have been shopping for an EMR.

“The most recent quote I got for the EMR that can provide the functions I want … for a practice of nine physicians, they want $400,000,” she continued. “Well, my Medicare drug money just went away, the physician fee schedule is going down, and the [Medicare payment formula] is going to nail us 30% over the next 6 years. Where am I going to find $400,000 to put in an EMR that I can search and find all stage II breast cancer patients, and see whether they got their chemotherapy, and how they are doing, and by the way, how many of them are on Vioxx, and I have got to call them up and get them off it? All these kinds of issues are really going to have to be addressed.”

Dr. Haywood agreed. “You're articulating some of the barriers we face as we continue to try to work through this process,” he said. “We've started to map out strategies to address some of those issues.” The agency is currently discussing the idea of certifying EMR systems to help physicians decide which ones to purchase, he said.

WASHINGTON — The Centers for Medicare and Medicaid Services is jumping on the pay-for-performance bandwagon, but members of a physician advisory group warned CMS officials to be careful how they go about it.

“I'm only hoping that you'll structure this so that the quality indicators will be that you've [performed] certain processes, not necessarily the outcome [of them],” said Laura B. Powers, M.D., a Knoxville, Tenn. neurologist and member of the Practicing Physicians Advisory Council.

For example, outcomes are not useful in terminal patients, Dr. Powers told this newspaper. “What outcome are they going to measure with … a patient who is definitely going to die?” she said. Instead, Medicare should assess whether the physician has followed appropriate standards of care for terminal patients.

Trent Haywood, M.D., acting deputy chief medical officer at the agency, said CMS has debated that very issue. “There has been a lot of discussion about what is the right thing [to measure]. We've always said that we think it's both,” he said. “We definitely want process measures … and the current financial structure is also easier for measuring processes, because that's the way we traditionally pay people.”

However, he added, “our goal is toward getting some evidence of outcomes. The process measures we normally collect are always related to outcomes.”

Council member Peter Grimm, D.O., a radiation oncologist in Seattle, said he believes it is most important to measure outcomes. “You have to have outcomes as the bottom line,” said Dr. Grimm, who runs a quality assurance business involving 300 physicians. “I don't care how people get there. I just care that they get there.”

In his testimony to the council, Dr. Haywood outlined the various steps Medicare is taking to introduce pay for performance into physician reimbursement, including demonstration projects with hospitals and group practices. But Dr. Grimm still was not satisfied.

“One thing I didn't hear is how you verify this [performance] data,” he said. “You have to have a third party evaluate it.”

Geraldine O'Shea, D.O., an internist in Jackson, Calif., said that she is concerned about the impact of pay for performance on the doctor-patient relationship.

“Could it discourage physicians from caring for noncompliant patients?” she asked. “And how do these programs ensure the most up-to-date guidelines are being used? How can we get this out to know that this is the benchmark we're going to be measured at?”

There are different ways to address patient compliance, Dr. Haywood said. “If you lean more heavily on process measures, that takes care of part of that problem, because those process measures look at whether you prescribed something or did something. But because we still want to look at outcomes measurement, we also talk about ways in which you allow that patient to be excluded. You can have documentation saying, 'Provided counseling and patient refused.'”

Council member Barbara McAneney, M.D., an oncologist in Albuquerque, N.M., said she was concerned about the expense of the computer system that would be required for physicians to keep track of their outcomes data.

“The electronic medical record (EMR) that our practice purchased some years ago is now completely inadequate because it's not searchable for tumor stage, size, or treatment,” she said. “So I have been shopping for an EMR.

“The most recent quote I got for the EMR that can provide the functions I want … for a practice of nine physicians, they want $400,000,” she continued. “Well, my Medicare drug money just went away, the physician fee schedule is going down, and the [Medicare payment formula] is going to nail us 30% over the next 6 years. Where am I going to find $400,000 to put in an EMR that I can search and find all stage II breast cancer patients, and see whether they got their chemotherapy, and how they are doing, and by the way, how many of them are on Vioxx, and I have got to call them up and get them off it? All these kinds of issues are really going to have to be addressed.”

Dr. Haywood agreed. “You're articulating some of the barriers we face as we continue to try to work through this process,” he said. “We've started to map out strategies to address some of those issues.” The agency is currently discussing the idea of certifying EMR systems to help physicians decide which ones to purchase, he said.

WASHINGTON — The Centers for Medicare and Medicaid Services is jumping on the pay-for-performance bandwagon, but members of a physician advisory group warned CMS officials to be careful how they go about it.

“I'm only hoping that you'll structure this so that the quality indicators will be that you've [performed] certain processes, not necessarily the outcome [of them],” said Laura B. Powers, M.D., a Knoxville, Tenn. neurologist and member of the Practicing Physicians Advisory Council.

For example, outcomes are not useful in terminal patients, Dr. Powers told this newspaper. “What outcome are they going to measure with … a patient who is definitely going to die?” she said. Instead, Medicare should assess whether the physician has followed appropriate standards of care for terminal patients.

Trent Haywood, M.D., acting deputy chief medical officer at the agency, said CMS has debated that very issue. “There has been a lot of discussion about what is the right thing [to measure]. We've always said that we think it's both,” he said. “We definitely want process measures … and the current financial structure is also easier for measuring processes, because that's the way we traditionally pay people.”

However, he added, “our goal is toward getting some evidence of outcomes. The process measures we normally collect are always related to outcomes.”

Council member Peter Grimm, D.O., a radiation oncologist in Seattle, said he believes it is most important to measure outcomes. “You have to have outcomes as the bottom line,” said Dr. Grimm, who runs a quality assurance business involving 300 physicians. “I don't care how people get there. I just care that they get there.”

In his testimony to the council, Dr. Haywood outlined the various steps Medicare is taking to introduce pay for performance into physician reimbursement, including demonstration projects with hospitals and group practices. But Dr. Grimm still was not satisfied.

“One thing I didn't hear is how you verify this [performance] data,” he said. “You have to have a third party evaluate it.”

Geraldine O'Shea, D.O., an internist in Jackson, Calif., said that she is concerned about the impact of pay for performance on the doctor-patient relationship.

“Could it discourage physicians from caring for noncompliant patients?” she asked. “And how do these programs ensure the most up-to-date guidelines are being used? How can we get this out to know that this is the benchmark we're going to be measured at?”

There are different ways to address patient compliance, Dr. Haywood said. “If you lean more heavily on process measures, that takes care of part of that problem, because those process measures look at whether you prescribed something or did something. But because we still want to look at outcomes measurement, we also talk about ways in which you allow that patient to be excluded. You can have documentation saying, 'Provided counseling and patient refused.'”

Council member Barbara McAneney, M.D., an oncologist in Albuquerque, N.M., said she was concerned about the expense of the computer system that would be required for physicians to keep track of their outcomes data.

“The electronic medical record (EMR) that our practice purchased some years ago is now completely inadequate because it's not searchable for tumor stage, size, or treatment,” she said. “So I have been shopping for an EMR.

“The most recent quote I got for the EMR that can provide the functions I want … for a practice of nine physicians, they want $400,000,” she continued. “Well, my Medicare drug money just went away, the physician fee schedule is going down, and the [Medicare payment formula] is going to nail us 30% over the next 6 years. Where am I going to find $400,000 to put in an EMR that I can search and find all stage II breast cancer patients, and see whether they got their chemotherapy, and how they are doing, and by the way, how many of them are on Vioxx, and I have got to call them up and get them off it? All these kinds of issues are really going to have to be addressed.”

Dr. Haywood agreed. “You're articulating some of the barriers we face as we continue to try to work through this process,” he said. “We've started to map out strategies to address some of those issues.” The agency is currently discussing the idea of certifying EMR systems to help physicians decide which ones to purchase, he said.

WASHINGTON — Consumer-driven health care may be all the rage right now, but there's no single cure for the nation's ailing health care system, several experts said at a health care congress sponsored by the Wall Street Journal and CNBC.

“There are no silver bullets,” said Douglas Holtz-Eakin, Ph.D., director of the Congressional Budget Office (CBO). “There is no single item—technology, disease management, tort law—that is likely to prove to be the answer to aligning incentives, providing high-quality care at reasonable costs, and financing it in a way that's economically viable. More likely, we'll have a series of incremental changes” that will shore up the system.

“Rising health care costs represent the central domestic issue at this time,” Dr. Holtz-Eakin said. For example, over the next 50 years, if nothing is done, “the cost of Medicare and Medicaid will rise from 4% of the gross domestic product to 20%—the current size of the entire federal budget.”

Because the population is aging, “we indeed may spend more than we do now” on health care, Dr. Holtz-Eakin continued. “But the key issue is to make sure we do not overspend, that the dollars per unit of high-quality care match up with our desires.”

Robert Reischauer, Ph.D., a former CBO director who is now president of the Urban Institute, noted that Medicare was a particular concern, since Medicare spending is expected to grow very rapidly over the next 10 years. He listed four possible solutions for the Medicare budget crisis.

The first possibility is to reduce the scope of coverage, but “that isn't a practical course of action,” he said. “All forces are moving in just the opposite direction.”

Another option is to restrain the growth in payments to providers, but already, Medicare is considered “not too generous,” compared with private payers, since it pays on average only about 80% of the private rate. “[Payment restraint] is clearly not going to happen,” he said.

The third option is to make beneficiaries pay more for care in the form of higher premiums, deductibles, and cost sharing.

“Some people think that will cause beneficiaries to purchase more rationally and cut out low-value services, but we have to remember, the vast bulk of spending is on individuals who are very sick, have many chronic conditions, and aren't in a position to comparison-shop,” he said. “Moreover, the services that they're purchasing are extremely complex and confusing, and providers play a very significant role in determining the demand for and type of services received by beneficiaries.

“Before we bet the ranch on this approach,” he continued, “we're going to have to see what happens to spending patterns among the under-65 population as they are faced with high-deductible plans, health savings accounts, consumer-driven health plans, and other approaches to incentivize them to purchase more rationally. If this proves to be a successful approach for the under-65 population, one can see it gradually angling into the bag of tools that Medicare has.”

However, Dr. Reischauer noted, the potential for shifting more costs onto beneficiaries is limited, “because they already spend a considerable amount of their incomes on Medicare cost-sharing of one sort or another. By 2025, the average 65-year-old Medicare beneficiary will be paying more than the size of their Social Security check in cost-sharing and deductibles.”

A fourth approach is to restructure Medicare in ways to generate competition among providers, Dr. Reischauer said. This would mean emphasizing technologies that improve efficiency, such as electronic health records and electronic prescribing. It also would involve decreasing the volume of unneeded services being provided.

He noted that researchers at Dartmouth University have looked at health care utilization across geographic areas and found that beneficiaries receiving higher volumes of services generally have poorer health outcomes, even after differences in their health status are accounted for.

“It's conceivable that as our ability to measure differences in quality and to reward quality effectively improves, the Medicare system could be transformed into one that pays only for care which is both necessary and beneficial, but this is likely to be a long and difficult row to hoe,” he said.

Gail Wilensky, a former administrator of the Centers for Medicare and Medicaid Services who is now a senior fellow at Project HOPE in Bethesda, Md., expressed disappointment that Congress did not do more to address the issue of rising costs when it passed the Medicare Modernization Act of 2003. That law “is a good example of eating dessert first,” she said. “There was an opportunity to try and slow down spending in a significant way while a new benefit was being introduced, but primarily, what [the law] does is provide a new benefit and some additional payments to providers of services, but not very much in terms of trying to restructure Medicare for the future.”

One little-known provision of the law does attempt to address the cost issue, she added. “Starting in 2007, Part B will be much more related to income. The subsidy will start declining significantly for those with higher incomes. As the baby boomers begin to retire, some of them with higher incomes and assets, this is at least one opportunity” to help with the cost problem.

Americans are going to need to rethink the entire issue of retirement, predicted Dr. Wilensky.

“A couple of weeks ago, [Rep.] Bill Thomas [R-Calif.] talked about the need to think about Social Security and Medicare together. Both represent transfers from the working population to the dependent, nonworking population. To begin thinking about this as a joint issue may allow us to make more sensible decisions,” Dr. Wilensky said.

For example, Americans should consider “how we can change both fiscal policies and cultural expectations so our whole concept of retirement begins to … reflect the increasing longevity and, for many individuals, the increased well-being and health status they have at age 65 relative to what 65 meant when Medicare was introduced in 1965,” she said. “We need to think about fiscal policies to encourage continued labor force participation for people at 65 and 70.”

WASHINGTON — Consumer-driven health care may be all the rage right now, but there's no single cure for the nation's ailing health care system, several experts said at a health care congress sponsored by the Wall Street Journal and CNBC.

“There are no silver bullets,” said Douglas Holtz-Eakin, Ph.D., director of the Congressional Budget Office (CBO). “There is no single item—technology, disease management, tort law—that is likely to prove to be the answer to aligning incentives, providing high-quality care at reasonable costs, and financing it in a way that's economically viable. More likely, we'll have a series of incremental changes” that will shore up the system.

“Rising health care costs represent the central domestic issue at this time,” Dr. Holtz-Eakin said. For example, over the next 50 years, if nothing is done, “the cost of Medicare and Medicaid will rise from 4% of the gross domestic product to 20%—the current size of the entire federal budget.”

Because the population is aging, “we indeed may spend more than we do now” on health care, Dr. Holtz-Eakin continued. “But the key issue is to make sure we do not overspend, that the dollars per unit of high-quality care match up with our desires.”

Robert Reischauer, Ph.D., a former CBO director who is now president of the Urban Institute, noted that Medicare was a particular concern, since Medicare spending is expected to grow very rapidly over the next 10 years. He listed four possible solutions for the Medicare budget crisis.

The first possibility is to reduce the scope of coverage, but “that isn't a practical course of action,” he said. “All forces are moving in just the opposite direction.”

Another option is to restrain the growth in payments to providers, but already, Medicare is considered “not too generous,” compared with private payers, since it pays on average only about 80% of the private rate. “[Payment restraint] is clearly not going to happen,” he said.

The third option is to make beneficiaries pay more for care in the form of higher premiums, deductibles, and cost sharing.

“Some people think that will cause beneficiaries to purchase more rationally and cut out low-value services, but we have to remember, the vast bulk of spending is on individuals who are very sick, have many chronic conditions, and aren't in a position to comparison-shop,” he said. “Moreover, the services that they're purchasing are extremely complex and confusing, and providers play a very significant role in determining the demand for and type of services received by beneficiaries.

“Before we bet the ranch on this approach,” he continued, “we're going to have to see what happens to spending patterns among the under-65 population as they are faced with high-deductible plans, health savings accounts, consumer-driven health plans, and other approaches to incentivize them to purchase more rationally. If this proves to be a successful approach for the under-65 population, one can see it gradually angling into the bag of tools that Medicare has.”

However, Dr. Reischauer noted, the potential for shifting more costs onto beneficiaries is limited, “because they already spend a considerable amount of their incomes on Medicare cost-sharing of one sort or another. By 2025, the average 65-year-old Medicare beneficiary will be paying more than the size of their Social Security check in cost-sharing and deductibles.”

A fourth approach is to restructure Medicare in ways to generate competition among providers, Dr. Reischauer said. This would mean emphasizing technologies that improve efficiency, such as electronic health records and electronic prescribing. It also would involve decreasing the volume of unneeded services being provided.

He noted that researchers at Dartmouth University have looked at health care utilization across geographic areas and found that beneficiaries receiving higher volumes of services generally have poorer health outcomes, even after differences in their health status are accounted for.

“It's conceivable that as our ability to measure differences in quality and to reward quality effectively improves, the Medicare system could be transformed into one that pays only for care which is both necessary and beneficial, but this is likely to be a long and difficult row to hoe,” he said.

Gail Wilensky, a former administrator of the Centers for Medicare and Medicaid Services who is now a senior fellow at Project HOPE in Bethesda, Md., expressed disappointment that Congress did not do more to address the issue of rising costs when it passed the Medicare Modernization Act of 2003. That law “is a good example of eating dessert first,” she said. “There was an opportunity to try and slow down spending in a significant way while a new benefit was being introduced, but primarily, what [the law] does is provide a new benefit and some additional payments to providers of services, but not very much in terms of trying to restructure Medicare for the future.”

One little-known provision of the law does attempt to address the cost issue, she added. “Starting in 2007, Part B will be much more related to income. The subsidy will start declining significantly for those with higher incomes. As the baby boomers begin to retire, some of them with higher incomes and assets, this is at least one opportunity” to help with the cost problem.

Americans are going to need to rethink the entire issue of retirement, predicted Dr. Wilensky.

“A couple of weeks ago, [Rep.] Bill Thomas [R-Calif.] talked about the need to think about Social Security and Medicare together. Both represent transfers from the working population to the dependent, nonworking population. To begin thinking about this as a joint issue may allow us to make more sensible decisions,” Dr. Wilensky said.

For example, Americans should consider “how we can change both fiscal policies and cultural expectations so our whole concept of retirement begins to … reflect the increasing longevity and, for many individuals, the increased well-being and health status they have at age 65 relative to what 65 meant when Medicare was introduced in 1965,” she said. “We need to think about fiscal policies to encourage continued labor force participation for people at 65 and 70.”

WASHINGTON — Consumer-driven health care may be all the rage right now, but there's no single cure for the nation's ailing health care system, several experts said at a health care congress sponsored by the Wall Street Journal and CNBC.

“There are no silver bullets,” said Douglas Holtz-Eakin, Ph.D., director of the Congressional Budget Office (CBO). “There is no single item—technology, disease management, tort law—that is likely to prove to be the answer to aligning incentives, providing high-quality care at reasonable costs, and financing it in a way that's economically viable. More likely, we'll have a series of incremental changes” that will shore up the system.

“Rising health care costs represent the central domestic issue at this time,” Dr. Holtz-Eakin said. For example, over the next 50 years, if nothing is done, “the cost of Medicare and Medicaid will rise from 4% of the gross domestic product to 20%—the current size of the entire federal budget.”

Because the population is aging, “we indeed may spend more than we do now” on health care, Dr. Holtz-Eakin continued. “But the key issue is to make sure we do not overspend, that the dollars per unit of high-quality care match up with our desires.”

Robert Reischauer, Ph.D., a former CBO director who is now president of the Urban Institute, noted that Medicare was a particular concern, since Medicare spending is expected to grow very rapidly over the next 10 years. He listed four possible solutions for the Medicare budget crisis.

The first possibility is to reduce the scope of coverage, but “that isn't a practical course of action,” he said. “All forces are moving in just the opposite direction.”

Another option is to restrain the growth in payments to providers, but already, Medicare is considered “not too generous,” compared with private payers, since it pays on average only about 80% of the private rate. “[Payment restraint] is clearly not going to happen,” he said.

The third option is to make beneficiaries pay more for care in the form of higher premiums, deductibles, and cost sharing.

“Some people think that will cause beneficiaries to purchase more rationally and cut out low-value services, but we have to remember, the vast bulk of spending is on individuals who are very sick, have many chronic conditions, and aren't in a position to comparison-shop,” he said. “Moreover, the services that they're purchasing are extremely complex and confusing, and providers play a very significant role in determining the demand for and type of services received by beneficiaries.

“Before we bet the ranch on this approach,” he continued, “we're going to have to see what happens to spending patterns among the under-65 population as they are faced with high-deductible plans, health savings accounts, consumer-driven health plans, and other approaches to incentivize them to purchase more rationally. If this proves to be a successful approach for the under-65 population, one can see it gradually angling into the bag of tools that Medicare has.”

However, Dr. Reischauer noted, the potential for shifting more costs onto beneficiaries is limited, “because they already spend a considerable amount of their incomes on Medicare cost-sharing of one sort or another. By 2025, the average 65-year-old Medicare beneficiary will be paying more than the size of their Social Security check in cost-sharing and deductibles.”

A fourth approach is to restructure Medicare in ways to generate competition among providers, Dr. Reischauer said. This would mean emphasizing technologies that improve efficiency, such as electronic health records and electronic prescribing. It also would involve decreasing the volume of unneeded services being provided.

He noted that researchers at Dartmouth University have looked at health care utilization across geographic areas and found that beneficiaries receiving higher volumes of services generally have poorer health outcomes, even after differences in their health status are accounted for.

“It's conceivable that as our ability to measure differences in quality and to reward quality effectively improves, the Medicare system could be transformed into one that pays only for care which is both necessary and beneficial, but this is likely to be a long and difficult row to hoe,” he said.

Gail Wilensky, a former administrator of the Centers for Medicare and Medicaid Services who is now a senior fellow at Project HOPE in Bethesda, Md., expressed disappointment that Congress did not do more to address the issue of rising costs when it passed the Medicare Modernization Act of 2003. That law “is a good example of eating dessert first,” she said. “There was an opportunity to try and slow down spending in a significant way while a new benefit was being introduced, but primarily, what [the law] does is provide a new benefit and some additional payments to providers of services, but not very much in terms of trying to restructure Medicare for the future.”

One little-known provision of the law does attempt to address the cost issue, she added. “Starting in 2007, Part B will be much more related to income. The subsidy will start declining significantly for those with higher incomes. As the baby boomers begin to retire, some of them with higher incomes and assets, this is at least one opportunity” to help with the cost problem.

Americans are going to need to rethink the entire issue of retirement, predicted Dr. Wilensky.

“A couple of weeks ago, [Rep.] Bill Thomas [R-Calif.] talked about the need to think about Social Security and Medicare together. Both represent transfers from the working population to the dependent, nonworking population. To begin thinking about this as a joint issue may allow us to make more sensible decisions,” Dr. Wilensky said.

For example, Americans should consider “how we can change both fiscal policies and cultural expectations so our whole concept of retirement begins to … reflect the increasing longevity and, for many individuals, the increased well-being and health status they have at age 65 relative to what 65 meant when Medicare was introduced in 1965,” she said. “We need to think about fiscal policies to encourage continued labor force participation for people at 65 and 70.”

WASHINGTON — Consumer-driven health care may be the “next big thing” in health insurance, but it won't go anywhere until more data on plans, providers, and outcomes become available, George Halvorson said at a health care congress sponsored by the Wall Street Journal and CNBC.

“It's time for an industrial revolution in health care,” said Mr. Halvorson, who is the chairman and CEO of Kaiser Foundation Health Plan, Oakland, Calif. “We need to set a much higher standard for ourselves as an industry.”

He noted that many major and expensive trends in care “too often lack scientific backing,” citing the examples of hormone therapy for heart attack prevention in women, knee surgery to relieve osteoporosis pain, and cyclooxygenase-2 (COX-2) inhibitors for arthritis pain, where the therapy turned out not to work as well as expected.

“These are significant issues. Because there's no consistent database in health care, people did not realize this kind of outcome was happening with something that was a very popular treatment,” he said.

Mr. Halvorson recommended that health care executives follow the example of other industries that have turned themselves around.

For example, General Electric instituted a program of “measure, analyze, improve, and control” to weed out errors in its manufacturing process.

Health care doesn't do any of those four steps with any great consistency, he continued. “Where does health care get the data that are used? We get it from paper medical records, which are not even complete per patient.”

For instance, Mr. Halvorson said, “we have one patient, four doctors—four unrelated, unconnected, noncommunicative, nonintuitive, noninteractive, too often inaccessible, and often illegible, paper medical records from which to derive the database.”

In addition to the well-known data-collection tools such as electronic medical records (EMRs) and computerized physician order-entry systems, the health care system also should be systematically collecting other information, such as whether patients fill their prescriptions, Mr. Halvorson said.

Another subject about which more data are needed is the hospital shift change, “the most dangerous time to be in the hospital,” he said.

“It takes an average 43 minutes to do a shift change [and exchange information about patients], and during that time, patients are hitting their buzzer and taking their own steps to the restroom and falling,” Mr. Halvorson commented at the meeting.

“This is literally when accidents happen. And the information transferred in that process is not all that accurate. By automating that process, you can take the shift change from 43 minutes down to 12, improve patient safety, and significantly improve the quality and accuracy of data that are involved.” he said.

Although the United States health care system is better than it has ever been, and the technology is better than it has ever been, “we will not be able to realize the full potential of it until we can get an information flow, and the flow has to come from an EMR,” Mr. Halvorson said. He added that a single nationwide EMR system would not be necessary as long as local systems could transport data to one another if needed.

To make data collection part of the national agenda, the impetus needs to come from a large government program like Medicare, according to Mr. Halvorson.

“Medicare is the key, and hospitals are the leverage point,” he said during the meeting.

“Medicare accounts for about 40% of hospital revenue,” he added. “If Medicare decided to do this, it could make this happen with a rewards system … relatively quickly. Investment dollars are needed, and Medicare needs to support that.”

WASHINGTON — Consumer-driven health care may be the “next big thing” in health insurance, but it won't go anywhere until more data on plans, providers, and outcomes become available, George Halvorson said at a health care congress sponsored by the Wall Street Journal and CNBC.

“It's time for an industrial revolution in health care,” said Mr. Halvorson, who is the chairman and CEO of Kaiser Foundation Health Plan, Oakland, Calif. “We need to set a much higher standard for ourselves as an industry.”

He noted that many major and expensive trends in care “too often lack scientific backing,” citing the examples of hormone therapy for heart attack prevention in women, knee surgery to relieve osteoporosis pain, and cyclooxygenase-2 (COX-2) inhibitors for arthritis pain, where the therapy turned out not to work as well as expected.

“These are significant issues. Because there's no consistent database in health care, people did not realize this kind of outcome was happening with something that was a very popular treatment,” he said.

Mr. Halvorson recommended that health care executives follow the example of other industries that have turned themselves around.

For example, General Electric instituted a program of “measure, analyze, improve, and control” to weed out errors in its manufacturing process.

Health care doesn't do any of those four steps with any great consistency, he continued. “Where does health care get the data that are used? We get it from paper medical records, which are not even complete per patient.”

For instance, Mr. Halvorson said, “we have one patient, four doctors—four unrelated, unconnected, noncommunicative, nonintuitive, noninteractive, too often inaccessible, and often illegible, paper medical records from which to derive the database.”

In addition to the well-known data-collection tools such as electronic medical records (EMRs) and computerized physician order-entry systems, the health care system also should be systematically collecting other information, such as whether patients fill their prescriptions, Mr. Halvorson said.

Another subject about which more data are needed is the hospital shift change, “the most dangerous time to be in the hospital,” he said.

“It takes an average 43 minutes to do a shift change [and exchange information about patients], and during that time, patients are hitting their buzzer and taking their own steps to the restroom and falling,” Mr. Halvorson commented at the meeting.

“This is literally when accidents happen. And the information transferred in that process is not all that accurate. By automating that process, you can take the shift change from 43 minutes down to 12, improve patient safety, and significantly improve the quality and accuracy of data that are involved.” he said.

Although the United States health care system is better than it has ever been, and the technology is better than it has ever been, “we will not be able to realize the full potential of it until we can get an information flow, and the flow has to come from an EMR,” Mr. Halvorson said. He added that a single nationwide EMR system would not be necessary as long as local systems could transport data to one another if needed.

To make data collection part of the national agenda, the impetus needs to come from a large government program like Medicare, according to Mr. Halvorson.

“Medicare is the key, and hospitals are the leverage point,” he said during the meeting.

“Medicare accounts for about 40% of hospital revenue,” he added. “If Medicare decided to do this, it could make this happen with a rewards system … relatively quickly. Investment dollars are needed, and Medicare needs to support that.”

WASHINGTON — Consumer-driven health care may be the “next big thing” in health insurance, but it won't go anywhere until more data on plans, providers, and outcomes become available, George Halvorson said at a health care congress sponsored by the Wall Street Journal and CNBC.

“It's time for an industrial revolution in health care,” said Mr. Halvorson, who is the chairman and CEO of Kaiser Foundation Health Plan, Oakland, Calif. “We need to set a much higher standard for ourselves as an industry.”

He noted that many major and expensive trends in care “too often lack scientific backing,” citing the examples of hormone therapy for heart attack prevention in women, knee surgery to relieve osteoporosis pain, and cyclooxygenase-2 (COX-2) inhibitors for arthritis pain, where the therapy turned out not to work as well as expected.

“These are significant issues. Because there's no consistent database in health care, people did not realize this kind of outcome was happening with something that was a very popular treatment,” he said.

Mr. Halvorson recommended that health care executives follow the example of other industries that have turned themselves around.

For example, General Electric instituted a program of “measure, analyze, improve, and control” to weed out errors in its manufacturing process.

Health care doesn't do any of those four steps with any great consistency, he continued. “Where does health care get the data that are used? We get it from paper medical records, which are not even complete per patient.”

For instance, Mr. Halvorson said, “we have one patient, four doctors—four unrelated, unconnected, noncommunicative, nonintuitive, noninteractive, too often inaccessible, and often illegible, paper medical records from which to derive the database.”

In addition to the well-known data-collection tools such as electronic medical records (EMRs) and computerized physician order-entry systems, the health care system also should be systematically collecting other information, such as whether patients fill their prescriptions, Mr. Halvorson said.

Another subject about which more data are needed is the hospital shift change, “the most dangerous time to be in the hospital,” he said.

“It takes an average 43 minutes to do a shift change [and exchange information about patients], and during that time, patients are hitting their buzzer and taking their own steps to the restroom and falling,” Mr. Halvorson commented at the meeting.

“This is literally when accidents happen. And the information transferred in that process is not all that accurate. By automating that process, you can take the shift change from 43 minutes down to 12, improve patient safety, and significantly improve the quality and accuracy of data that are involved.” he said.

Although the United States health care system is better than it has ever been, and the technology is better than it has ever been, “we will not be able to realize the full potential of it until we can get an information flow, and the flow has to come from an EMR,” Mr. Halvorson said. He added that a single nationwide EMR system would not be necessary as long as local systems could transport data to one another if needed.

To make data collection part of the national agenda, the impetus needs to come from a large government program like Medicare, according to Mr. Halvorson.

“Medicare is the key, and hospitals are the leverage point,” he said during the meeting.

“Medicare accounts for about 40% of hospital revenue,” he added. “If Medicare decided to do this, it could make this happen with a rewards system … relatively quickly. Investment dollars are needed, and Medicare needs to support that.”

WASHINGTON — People who have suffered adverse outcomes due to drugs or medical devices may face more delays in suing manufacturers for damages now that federal class-action lawsuit legislation has been signed into law.

The law—the Class Action Fairness Act of 2005—would move from state court to federal court any class-action lawsuit in which the amount of damages claimed was greater than $5 million and involved citizens in different states. The law outlines circumstances in which federal courts can decline to hear class-action cases.

Proponents of the law, which passed in both the House and Senate in record time, say that it will help decrease the number of “junk lawsuits” that are clogging up the state courts.

“America's employers and consumers are the big winners,” Tom Donohue, president and CEO of the U.S. Chamber of Commerce, said in a statement. “Reform of the class-action lawsuit system will reduce frivolous lawsuits, spur business investment, and help restore sanity to our nation's legal system.”

Critics of the bill, however, say that it will deprive citizens of their right to sue when they are injured by a defective product. “There are only 678 federal trial judges in the system, but there are 9,200 state judges in courts of general jurisdiction,” said Jillian Aldebron, counsel and communications coordinator for Public Citizen's Congress Watch, a citizen watchdog group. “So you're talking about cases ordinarily divided up among 9,200 judges and squeezing them into the courtrooms of 678 judges. Even if they are willing to hear the cases, it's going to take years, and these cases take years in state court” already.

Many physician organizations, including the American Medical Association, have declined to take a stand on the bill; their efforts are more focused on tort reform legislation affecting medical malpractice cases. But a few consumer groups, such as the Campaign for Tobacco-Free Kids, lamented the effect the bill would have on health care-related cases.

“Class-action lawsuits have been an important tool in efforts to hold the tobacco industry accountable,” the group's president, Matthew L. Myers, said in a statement. “This bill will deprive citizens of a state of the right to have their cases heard in their own courts, further overburden the federal courts, and make it more difficult for tobacco companies to be held accountable.”

Senior citizens' lobby AARP also opposed the bill. “We felt that there wasn't an adequate basis for consumers no longer having the option of bringing a multistate case in state court,” said Larry White, senior legislative representative. “We acknowledge there are abuses on both sides in the system, but when you in essence say that the federal courts will have jurisdiction of these cases …knowing the federal courts oftentimes don't certify those cases, you're in essence saying people who have been genuinely harmed don't have options.”

According to the Bush administration, the law will help consumers. “The bill will remove significant burdens on class-action litigants and provide greater protections for the victims,” the administration said in a statement.

The new law would only affect cases filed after the legislation was signed, according to Ms. Aldebron.

WASHINGTON — People who have suffered adverse outcomes due to drugs or medical devices may face more delays in suing manufacturers for damages now that federal class-action lawsuit legislation has been signed into law.

The law—the Class Action Fairness Act of 2005—would move from state court to federal court any class-action lawsuit in which the amount of damages claimed was greater than $5 million and involved citizens in different states. The law outlines circumstances in which federal courts can decline to hear class-action cases.

Proponents of the law, which passed in both the House and Senate in record time, say that it will help decrease the number of “junk lawsuits” that are clogging up the state courts.

“America's employers and consumers are the big winners,” Tom Donohue, president and CEO of the U.S. Chamber of Commerce, said in a statement. “Reform of the class-action lawsuit system will reduce frivolous lawsuits, spur business investment, and help restore sanity to our nation's legal system.”

Critics of the bill, however, say that it will deprive citizens of their right to sue when they are injured by a defective product. “There are only 678 federal trial judges in the system, but there are 9,200 state judges in courts of general jurisdiction,” said Jillian Aldebron, counsel and communications coordinator for Public Citizen's Congress Watch, a citizen watchdog group. “So you're talking about cases ordinarily divided up among 9,200 judges and squeezing them into the courtrooms of 678 judges. Even if they are willing to hear the cases, it's going to take years, and these cases take years in state court” already.

Many physician organizations, including the American Medical Association, have declined to take a stand on the bill; their efforts are more focused on tort reform legislation affecting medical malpractice cases. But a few consumer groups, such as the Campaign for Tobacco-Free Kids, lamented the effect the bill would have on health care-related cases.

“Class-action lawsuits have been an important tool in efforts to hold the tobacco industry accountable,” the group's president, Matthew L. Myers, said in a statement. “This bill will deprive citizens of a state of the right to have their cases heard in their own courts, further overburden the federal courts, and make it more difficult for tobacco companies to be held accountable.”

Senior citizens' lobby AARP also opposed the bill. “We felt that there wasn't an adequate basis for consumers no longer having the option of bringing a multistate case in state court,” said Larry White, senior legislative representative. “We acknowledge there are abuses on both sides in the system, but when you in essence say that the federal courts will have jurisdiction of these cases …knowing the federal courts oftentimes don't certify those cases, you're in essence saying people who have been genuinely harmed don't have options.”

According to the Bush administration, the law will help consumers. “The bill will remove significant burdens on class-action litigants and provide greater protections for the victims,” the administration said in a statement.

The new law would only affect cases filed after the legislation was signed, according to Ms. Aldebron.

WASHINGTON — People who have suffered adverse outcomes due to drugs or medical devices may face more delays in suing manufacturers for damages now that federal class-action lawsuit legislation has been signed into law.

The law—the Class Action Fairness Act of 2005—would move from state court to federal court any class-action lawsuit in which the amount of damages claimed was greater than $5 million and involved citizens in different states. The law outlines circumstances in which federal courts can decline to hear class-action cases.

Proponents of the law, which passed in both the House and Senate in record time, say that it will help decrease the number of “junk lawsuits” that are clogging up the state courts.

“America's employers and consumers are the big winners,” Tom Donohue, president and CEO of the U.S. Chamber of Commerce, said in a statement. “Reform of the class-action lawsuit system will reduce frivolous lawsuits, spur business investment, and help restore sanity to our nation's legal system.”

Critics of the bill, however, say that it will deprive citizens of their right to sue when they are injured by a defective product. “There are only 678 federal trial judges in the system, but there are 9,200 state judges in courts of general jurisdiction,” said Jillian Aldebron, counsel and communications coordinator for Public Citizen's Congress Watch, a citizen watchdog group. “So you're talking about cases ordinarily divided up among 9,200 judges and squeezing them into the courtrooms of 678 judges. Even if they are willing to hear the cases, it's going to take years, and these cases take years in state court” already.

Many physician organizations, including the American Medical Association, have declined to take a stand on the bill; their efforts are more focused on tort reform legislation affecting medical malpractice cases. But a few consumer groups, such as the Campaign for Tobacco-Free Kids, lamented the effect the bill would have on health care-related cases.

“Class-action lawsuits have been an important tool in efforts to hold the tobacco industry accountable,” the group's president, Matthew L. Myers, said in a statement. “This bill will deprive citizens of a state of the right to have their cases heard in their own courts, further overburden the federal courts, and make it more difficult for tobacco companies to be held accountable.”

Senior citizens' lobby AARP also opposed the bill. “We felt that there wasn't an adequate basis for consumers no longer having the option of bringing a multistate case in state court,” said Larry White, senior legislative representative. “We acknowledge there are abuses on both sides in the system, but when you in essence say that the federal courts will have jurisdiction of these cases …knowing the federal courts oftentimes don't certify those cases, you're in essence saying people who have been genuinely harmed don't have options.”

According to the Bush administration, the law will help consumers. “The bill will remove significant burdens on class-action litigants and provide greater protections for the victims,” the administration said in a statement.

The new law would only affect cases filed after the legislation was signed, according to Ms. Aldebron.